WD-40 Company Misses Q1 Expectations, Shares Plummet

WD-40 Company WDFC reported financial results Wednesday for its first fiscal quarter ended November 30, 2014. Total net sales for the first quarter were $96.4 million, below estimates of $99.52 million and an increase of 1 percent compared to the prior year fiscal quarter.

Translation of the company's foreign subsidiary results to U.S. dollars had a favorable impact on sales for the current quarter. On a constant currency basis total net sales were $95.8 million for the first quarter.

Net income for the first quarter was $10.8 million, a decrease of 6 percent compared to the prior year fiscal quarter.

Diluted earnings per share were $0.73 in the first quarter, below estimates of $0.80 and the $0.74 per share reported for the prior year fiscal quarter.

Gross margin was 51.6 percent in the first quarter compared to 52.0 percent in the prior year fiscal quarter.

Selling, general and administrative expenses were up 3 percent in the first quarter to $27.4 million when compared to the prior year fiscal quarter.

Advertising and sales promotion expenses were up 5 percent in the first quarter to $5.9 million compared to prior year fiscal quarter.

"During the quarter we experienced slow but steady growth of our multi-purpose maintenance products," said Garry Ridge, WD-40 Company's president and chief executive officer.

The company guided fiscal 2015 net sales growth between 4 percent and 8 percent with net sales expected to be between $398 million and $413 million. Analysts expected $399.85 million.

Fiscal 2015 diluted earnings per share are expected to be between $3.07 and $3.16 based on an estimated 14.7 million weighted average shares outstanding. Analysts expected $3.11.

WD-40 Company traded at $81.00 in the after-hours session, down 5.2 percent.