WD-40 has reported its financial results for its third fiscal quarter, which ended on 31 May 2023.
Net sales for the third quarter were $141.7 million (€128.5m), an increase of 15% compared to the same period last year.
Year-to-date total net sales were $396.8m (€359.8m), an increase of 2% compared to the prior year fiscal period.
Translation of the company’s foreign subsidiaries’ results from their functional currencies to US dollars had an unfavourable impact on sales for the current quarter and year-to-date, according to the report.
On a non-GAAP constant currency basis, total net sales would have been $145.6m for the third quarter and $415.7m year to date.
Net income for the third quarter was $18.9m (€17.1m), an increase of 30% from the prior year fiscal quarter.
Year-to-date net income was $49.4m (€44.8m), a decrease of 6% from the prior year fiscal period.
Translation of the Company’s foreign subsidiaries’ results from their functional currencies to US dollars had an unfavourable impact on net income for the current quarter and year to date.
On a non-GAAP constant currency basis, net income would have been $19.5m for the third quarter and $52.2m year to date.
Diluted earnings per share were $1.38 (€1.25) in the third quarter compared to $1.07 (€0.97) in the prior year fiscal quarter.
Year-to-date diluted earnings per share were $3.62 (€3.28) compared to $3.82 (€3.46) for the prior year fiscal period.
Gross margin was 50.6% in the third quarter compared to 47.7% in the prior year fiscal quarter.
Year-to-date gross margin was 50.9% compared to 49.7% in the prior year fiscal period.
Selling, general, and administrative expenses were up 14% in the third quarter to $38.2m (€34.6m) compared to the prior year fiscal quarter.
Year-to-date selling, general, and administrative expenses were up 8% to $115.9m (€105.1m) compared to the prior year fiscal period.
Advertising and sales promotion expenses were up 27% in the third quarter to $7.7m (€6.9m) compared to the prior year fiscal quarter.
Year-to-date advertising and sales promotion expenses were up 10% to $19.0m (€17.2m) compared to the prior year fiscal period.
“I am happy to share with you that after two quarters of flat-to-down sales, we have returned to solid top line growth in the third fiscal quarter,” said Steve Brass, WD-40 Company’s president and chief executive officer.
“As a global company with more than half of our revenue generated in currencies other than the US dollar, we are exposed to the effects of changing foreign currency exchange rates.
"The impacts of changing foreign currency exchange rates have had a significant negative impact on our reported results in both the third quarter and year to date.
"On a constant currency basis, global sales were up 18% in the third quarter and 7% year to date.
"We target a compound annual growth rate for maintenance product revenue in the mid-to-high single digits on a constant currency basis. Achieving year to date growth of 7% in constant currency is in-line with our long-term objectives,” Brass concluded.
WD-40 reports strong Q3 results despite “unfavourable” currency exchange impact
