WD-40 Company (NASDAQ: WDFC) reported financial results for its second fiscal quarter ended February 28, 2026, posting higher sales but lower net income compared with the prior-year period.
The San Diego-based manufacturer of maintenance and cleaning products recorded net sales of $161.7 million, up 11% year over year. Growth was driven primarily by maintenance product sales, which rose 13% to $156.8 million. However, net income declined 32% to $20.3 million, reflecting the absence of a one-time tax benefit recorded in the same quarter last year.
Diluted earnings per share were $1.50, compared with $2.19 in the prior-year quarter. The company said the earlier period included a favorable tax adjustment of $11.9 million, which affected comparability. Excluding that item, adjusted earnings showed an increase on a year-over-year basis.
#Sales Growth Driven by Core Maintenance Products
Maintenance products remained the primary contributor to revenue, accounting for 97% of total net sales in the quarter. The increase was attributed to higher demand for the company’s core offerings, including multi-use lubricants and specialty maintenance products, particularly in the United States, China, and distributor markets in Asia.
By region, the Americas segment reported a 10% increase in sales, supported by higher volumes and expanded distribution in the United States. E-commerce and promotional activity also contributed to growth in the region.
In Europe, India, the Middle East, and Africa (EIMEA), sales rose 9%, with gains in maintenance products partly offset by the absence of revenue from divested homecare and cleaning brands. The company completed the sale of its U.K. homecare portfolio in fiscal 2025, and those products no longer contribute to current-period results.
Asia-Pacific recorded the fastest growth, with sales increasing 19% year over year. The company cited stronger demand in China and improved distributor performance, along with expanded product placement and promotional programs.
Foreign currency movements had a measurable effect on reported performance. The company said currency translation added approximately $9.3 million to net sales. On a constant currency basis, total sales growth would have been 4% for the quarter.
#Margin Expansion and Cost Factors
Gross margin improved to 55.6%, compared with 54.6% a year earlier. The increase was attributed to lower input costs for specialty chemicals and pricing adjustments, partially offset by other cost pressures.
Operating income rose 13% to $26.3 million, reflecting higher sales and margin expansion. At the same time, operating expenses increased, including higher spending on advertising and sales promotion, which rose 19% year over year. These investments represented approximately 5.5% of total net sales.
The company continues to focus on maintenance products as its core business, while reducing exposure to homecare and cleaning brands. Revenue from those products declined 29% in the quarter, consistent with previously announced divestitures and planned exits from certain markets.
#Guidance Reaffirmed Amid External Uncertainty
WD-40 reaffirmed its fiscal 2026 outlook, maintaining expectations for net sales between $630 million and $655 million, representing projected growth of 5% to 9% on a pro forma basis. The guidance excludes the financial impact of assets held for sale, including remaining homecare and cleaning operations.
The company expects gross margin to range between 55.5% and 56.5% for the full year, with operating income projected between $103 million and $110 million. Diluted earnings per share are forecast in the range of $5.75 to $6.15, based on approximately 13.4 million shares outstanding.
Management indicated that assumptions underlying the outlook include commodity price ranges, particularly crude oil, and foreign exchange rates. The company also noted that macroeconomic conditions, geopolitical developments, and supply chain factors could influence results.
#Strategic Positioning and Industry Context
The company’s performance reflects continued reliance on its maintenance product segment, which has shown consistent growth across multiple regions. This focus aligns with a broader industry trend toward higher-margin, branded specialty products in industrial and consumer maintenance categories.
At the same time, WD-40’s divestiture of homecare and cleaning brands signals a strategic shift toward a more concentrated portfolio. The company has indicated that these actions are intended to streamline operations and improve comparability of its core business over time.
Currency fluctuations and promotional activity remain key variables in near-term performance. While foreign exchange provided a tailwind in the quarter, underlying sales growth was more modest when adjusted for currency effects.
The company also highlighted ongoing share repurchase activity and dividend payments, although these capital allocation decisions were not a primary driver of quarterly operating results.
#Outlook and Risks
The company's forward-looking statements emphasize potential variability in economic conditions, input costs, and geopolitical developments. Management noted that actual results could differ from projections depending on these factors, as well as the timing and completion of planned divestitures.
The reaffirmed guidance suggests stability in expectations for the remainder of fiscal 2026, though performance will depend on execution across key markets and product categories.