WD-40 Co. (NASDAQ:WDFC) Shares Drop on Q1 Earnings Miss Despite Reaffirmed Guidance

WD-40 Co. (NASDAQ:WDFC) Reports Mixed Q1 Results, Shares Drop on Earnings Miss

WD-40 Co. (NASDAQ:WDFC) reported financial results for its first fiscal quarter of 2026, ending November 30, 2025. The household and maintenance products maker delivered revenue essentially in line with expectations but fell short on profitability, leading to a sharp decline in its stock price in after-hours trading.

Earnings and Revenue Versus Estimates

The company's performance presented a split picture when measured against Wall Street's expectations. While top-line sales were nearly flat year-over-year, they came in slightly below what analysts had projected. More notably, earnings per share missed consensus estimates by a significant margin.

• Reported Revenue: $154.4 million, a 1% increase from the prior year.
• Estimated Revenue: $158.2 million.
• Reported EPS (Diluted): $1.28, an 8% decrease from the $1.39 reported in Q1 2025.
• Estimated EPS: $1.48.

On a constant-currency basis, which strips out the favorable impact of foreign exchange translation, total net sales would have decreased by 2% to $151.0 million. The company attributed part of the quarterly softness to timing factors within its distributor network, particularly in Asia-Pacific markets.

Market Reaction and Price Action

The market's reaction to the earnings report was decisively negative. Following the release, WDFC shares fell approximately 8.1% in after-market trading. This sell-off appears to be a direct response to the earnings miss and the lower-than-expected profitability for the quarter, overshadowing the company's reaffirmed full-year guidance.

Key Highlights from the Quarterly Report

Beyond the headline numbers, management highlighted several strategic and operational points:

• Maintenance Products Focus: Sales of the core maintenance products, which include the flagship WD-40 Multi-Use Product and the WD-40 Specialist line, grew 2% and now represent 96% of total net sales. The Specialist line was a standout, with sales up 18% globally.
• Margin Improvement: A bright spot was the expansion in gross margin, which increased to 56.2% from 54.8% a year ago, reflecting improved operational efficiency and product mix.
• Segment Performance: Growth was uneven across regions. The Americas and EIMEA (Europe, India, Middle East, Africa) segments saw sales increases of 4% and 2%, respectively, driven by maintenance products. The Asia-Pacific segment, however, saw a 10% sales decline due to order timing in distributor markets.
• Divestiture Progress: The company continues to streamline its portfolio, having completed the divestiture of its homecare and cleaning portfolio in the UK. It reiterated plans to sell similar portfolios in the Americas.

Forward Outlook and Guidance

Despite the mixed first-quarter results, WD-40 Co.'s leadership expressed confidence in a rebound for the remainder of the fiscal year. The company reaffirmed its full-year fiscal 2026 guidance, which was initially seen as slightly below analyst expectations.

• Company Guidance (Midpoint): Net sales of approximately $642.5 million and diluted EPS of approximately $5.95.
• Analyst Estimates for FY2026: Sales of approximately $662.3 million and EPS of approximately $6.20.

The guidance assumes the divestiture of its Americas homecare brands. Management stated that visibility into second-half initiatives gives them confidence in delivering results at the "mid-to-high end" of their projected ranges.

Capital Return to Shareholders

The company remains committed to returning capital to stockholders. The board approved an 8% increase in the quarterly cash dividend to $1.02 per share. During Q1, WD-40 also repurchased $7.8 million worth of its shares and announced plans to accelerate buyback activity to utilize the remainder of its $50 million authorization during the fiscal year.

For a detailed look at upcoming earnings dates and analyst estimate revisions, investors can review the WD-40 Co. earnings and estimates page.

Conclusion

WD-40 Co.'s first quarter presented a tale of resilient brand strength in its maintenance division and solid margin gains, offset by a profitability shortfall and some regional sales volatility. The market's negative reaction underscores the weight given to the earnings miss. The company's ability to meet its reaffirmed full-year guidance, which currently trails Street expectations, will be the critical factor to watch in the coming quarters as it seeks to demonstrate that the Q1 weakness was indeed transient.

Disclaimer: This article is for informational purposes only and does not constitute financial advice, nor a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.