WD-40 Fiscal Q4 2026 Earnings: Sales Rise as Margins and EPS Fall

WD-40 Company (Nasdaq: WDFC) reported fiscal Q4 2026 net sales of $176.8 million, up 8% from $163.5 million a year earlier, while diluted EPS fell 32% to $1.06 from $1.56. Maintenance product sales continued to grow, but lower gross margin and higher operating expenses pushed operating income and net income down 32%.

Core Earnings Results

Reported sales growth was one percentage point higher than constant-currency growth, while maintenance products generated 96% of quarterly revenue. However, higher specialty chemical and other input costs reduced gross margin, and increases in compensation, freight, and advertising spending weighed on operating profit.

On a constant-currency basis, total sales rose 7% to $174.9 million, while maintenance product sales increased 8% to $168.8 million.

Business and Segment Performance

All three geographic segments reported higher sales. Asia-Pacific had the highest reported growth rate, while EIMEA benefited from distributor markets and Southern Europe. The Americas remained the largest segment but recorded the slowest growth.

In the Americas, sales of WD-40 Multi-Use Product in Latin America increased by $2.7 million, supported by Argentina and Ecuador. WD-40 Specialist added $0.7 million through new distribution, broader placement with large retailers, and online growth.

EIMEA maintenance product sales rose 14%. India and the Middle East contributed increases of $2.4 million and $1.2 million, respectively, while sales of WD-40 Brand products in Southern Europe rose $3.9 million. Following the fiscal 2025 divestiture of EIMEA homecare and cleaning products, maintenance products now account for all segment sales.

Asia-Pacific growth was led by a $1.8 million increase in China, reflecting promotions, marketing, and expanded traditional and e-commerce distribution. Some customer purchases occurred ahead of a planned price increase, creating a timing factor to monitor in fiscal 2027.

By product, WD-40 Multi-Use Product sales increased 8% to $135.0 million, while WD-40 Specialist grew 18% to $26.2 million. Homecare and cleaning product sales fell 18% to $6.3 million, partly because the prior-year quarter included $2.0 million from the divested UK portfolio.

Higher Input Costs and Spending Outpaced Sales Growth

The central issue in the quarter was the gap between revenue growth and profit performance. Gross profit increased by about 4%, but total operating expenses rose by about 21%, causing operating income to decline despite higher sales.

Management attributed the gross-margin contraction to higher specialty chemical and other input costs. SG&A increased primarily because of performance-based employee incentive compensation and higher freight costs incurred to maintain product availability. Advertising and sales promotion spending also increased to support sales growth and brand investment.

Management believes fiscal Q4 marked the low point for gross margin based on currently available information and expects sequential improvement beginning in fiscal Q1 2027. That expected recovery is important because quarterly gross margin would need to improve from 52.8% to move into the company’s full-year guidance range.

Profitability, Cash Flow, and the Balance Sheet

Quarterly cash flow was not disclosed, but full-year operating cash flow rose about 19% to $105.0 million from $87.9 million. The increase came even as reported fiscal-year net income fell 10% to $82.3 million, with the earnings comparison affected by a favorable $11.9 million tax adjustment recorded in fiscal 2025.

Excluding that prior-year tax benefit and $1.3 million of fiscal 2026 amortization related to the reclassification of certain Americas homecare and cleaning products, non-GAAP net income increased 6% to $83.7 million and non-GAAP diluted EPS rose 6% to $6.18.

Cash and cash equivalents reached $70.6 million at August 31, 2026, up from $58.1 million a year earlier. Inventories increased to $83.3 million from $79.9 million, while long-term borrowings edged down to $85.2 million from $86.2 million.

WD-40 repurchased 30,895 shares for $7.0 million during the quarter. A new repurchase authorization of up to $100.0 million became effective on September 1, 2026; the authorization has no expiration date and does not require a specified amount of repurchases. The board also declared a quarterly dividend of $1.02 per share.

Fiscal 2027 Guidance

WD-40’s new fiscal 2027 guidance calls for 4% to 7% constant-currency sales growth and 5% to 10% growth in both operating income and diluted EPS. The gross-margin range spans below and slightly above the 55.3% reported for fiscal 2026, while remaining above the fiscal Q4 level at its low end.

The sales outlook uses weighted-average fiscal 2026 exchange rates. It also assumes crude oil prices remain near current levels through the first half of fiscal 2027 before moderating in the second half.

Recent Insider Transactions

The supplied insider transaction data recorded two direct sales by officer Patricia Q. Olsem in August 2026. Together, the transactions involved 500 shares with a reported value of $117,063; these transactions alone do not establish an insider view of the company’s outlook.

Risks Investors Need to Monitor

• Input-cost pressure: Specialty chemical and other input costs compressed quarterly gross margin. Fiscal 2027 guidance assumes crude oil prices moderate in the second half, so a different cost path could affect margins.
• Operating expense growth: Compensation, freight, and advertising expenses grew considerably faster than quarterly revenue. Continued expense growth at that pace would limit operating leverage.
• Purchase timing in China: Some Asia-Pacific growth reflected customer purchases ahead of a planned price increase, which could shift demand between reporting periods.
• Currency exposure: Fiscal 2027 sales guidance is stated at constant currency, so reported growth may differ as exchange rates change.

Summary

WD-40’s fiscal Q4 2026 produced continued maintenance-product growth across every region, led by Asia-Pacific and EIMEA. That sales growth did not translate into higher earnings because input-cost pressure reduced gross margin and operating expenses rose faster than revenue. The main fiscal 2027 considerations are whether gross margin improves sequentially as management expects and whether sales growth can outpace compensation, freight, and brand-investment costs.