WD 40 CO Q2 FY2025 earnings call

Must-Win Battles: #1 Lead geographic expansion, global WD-40 Multi-Use Product sales $232M, +8% YTD; #2 Accelerate premiumization, premiumized products up 11% YTD; #3 Drive WD-40 Specialist growth, sales $38M, +12% YTD; #4 Turbocharge digital commerce, e-commerce sales up 9% YTD. Strategic enablers: People first mindset, employee engagement index 94%; Operational excellence and supply chain, strengthened global partnerships, cost savings offset tariff impact.

Net sales for the second quarter were $146.1 million, up 5% from the prior year; adjusting for foreign currency, it would have been $150.9 million, up 9%. Americas: Total sales $65.5M, +3% (+5% adj. for FX); maintenance products $62.4M, +4%. EIMEA: Total sales $59.6M, +10% (+15% adj. for FX); maintenance products $58.1M, +11%. Asia Pacific: Sales $21M, -1% (+1% adj. for FX); maintenance products $18.9M, -1%. Americas segment 45% of global business, EIMEA 41%, Asia Pacific 14%.

FY 2025 net sales growth projected 6%-11%, $600M-$630M (adj. for FX); gross margin 55%-56%; A&P investment ~6% of net sales; operating income $95M-$100M; non-GAAP diluted EPS $5.25-$5.55, +11%-17% growth. If divestiture not completed, guidance positively impacted by $23M net sales, $6M operating income, $0.33 EPS.

Potential impact of tariffs beyond current fiscal year, dynamic economic environment, unanticipated inflationary headwinds, foreign currency exchange fluctuations, changes in trade tariffs, and success of divestiture of home care and cleaning business.

Q: About tariffs, how much shipped across borders, production locally, impact?

A: Centralized supply chain mitigates tariff risk, supply chain optimization and cost-savings to offset tariffs this fiscal year.

Q: China retaliatory tariffs impact?

A: No material risk as of today, manufacture in China for China and other Asian markets.

Q: Supply chain optimization timeline?

A: Bringing on new suppliers takes 18-24 months, but in process.

Q: Gross margin up, operating income same?

A: Impact of foreign currency headwind.

Q: FX impact, potential upside?

A: Euro trending up could be tailwind if holds.

Q: FX $0.01 move in euro impact?

A: Not easy to determine due to cost dynamics in Europe.