WD-40 Co. (WDFC) Tops Q2 EPS by 10c, Miss on Revenues; Offers FY18 EPS/Revenue Outlook Above Consensus

Note: EPS may not be comparable

WD-40 Co. (NASDAQ: WDFC) reported Q2 EPS of $1.05, $0.10 better than the analyst estimate of $0.95. Revenue for the quarter came in at $101.3 million versus the consensus estimate of $102.49 million.

Financial Highlights and Summary

• Total net sales for the second quarter were $101.3 million, an increase of 5 percent compared to the prior year fiscal quarter. Year-to-date total net sales were $198.9 million, an increase of 7 percent compared to the prior year fiscal period.
• Translation of the Company\'s foreign subsidiary results to U.S. dollars had a favorable impact on sales for the current quarter and year-to-date. On a constant currency basis total net sales would have been $97.0 million for the second quarter and $193.2 million year-to-date.
• Net income for the second quarter was $14.8 million, an increase of 20 percent compared to the prior year fiscal quarter. Year-to-date net income was $27.4 million, an increase of 14 percent from the prior year fiscal period.
• Diluted earnings per share were $1.05 in the second quarter, compared to $0.87 per share for the prior year fiscal quarter. Year-to-date diluted earnings per share were $1.95 compared to $1.69 in the prior year fiscal period.
• Gross margin was 55.1 percent in the second quarter compared to 56.4 percent in the prior year fiscal quarter. Year-to-date gross margin was 55.3 percent compared to 56.8 percent in the prior year fiscal period.
• Selling, general and administrative expenses were up 2 percent in the second quarter to $30.4 million when compared to the prior year fiscal quarter. Year-to-date selling, general and administrative expenses were up 5 percent to $61.6 million compared to the prior year fiscal period.
• Advertising and sales promotion expenses were up 3 percent in the second quarter to $5.2 million when compared to the prior year fiscal quarter. Year-to-date advertising and sales promotion expenses were up 5 percent to $10.3 million compared to the prior year fiscal period.

Updated Fiscal Year 2018 Guidance The Company revised its revenue guidance for fiscal year 2018 as follows:

• Net sales growth is projected to be between 7 and 9 percent with net sales expected to be between $407 million and $415 million.
• Gross margin percentage for the full year is expected to be near 55 percent.
• Advertising and promotion investments are projected to be near 6 percent of net sales.
• Net income is projected to be between $56.6 million and $57.5 million.
• Diluted earnings per share is expected to be between $4.07 and $4.14 based on an estimated 13.9 million weighted average shares outstanding.

GUIDANCE:

WD-40 Co. sees FY2018 EPS of $4.07-$4.14, versus the consensus of $3.94. WD-40 Co. sees FY2018 revenue of $407-415 million, versus the consensus of $401.1 million.

For earnings history and earnings-related data on WD-40 Co. (WDFC) click here.

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