WD-40 (NASDAQ:WDFC) reported a sharp increase in fiscal third-quarter sales and profit, with management citing broad-based gains across regions, strong growth in maintenance products and benefits from operating leverage, while also warning that higher input costs are expected to pressure gross margin in the near term.
President and Chief Executive Officer Steve Brass said consolidated net sales for the quarter ended May 31, 2026, rose 24% year over year to $195.1 million. Maintenance products, which represented 97% of total net sales, increased 26% to $189.7 million, or 22% on a constant-currency basis, setting a company record.
Sales rise across all regions
In the Americas, sales increased 29% to $101.2 million, driven by a 31% increase in maintenance products to $98.3 million. Brass said growth was led primarily by WD-40 Multi-Use Product in the U.S. and Latin America, where sales increased by $17.2 million and $2.6 million, respectively.
U.S. growth reflected expanded distribution, e-commerce strength and promotional activity, including a limited-edition can collaboration with Disney Entertainment and The Home Depot. During the question-and-answer portion of the call, Brass said the “King of the Hill” promotion with Disney and The Home Depot was one of the largest in the company’s history and was driving “really strong incremental sales,” with about 75% of sales considered incremental after one month.
Sales in EMEA increased 17% to $66.6 million, or 10% on a constant-currency basis. Brass cited higher sales volume in both direct and distributor markets, favorable foreign exchange rates, strong performance in Iberia and DACH, and a rebound in distributor markets including Saudi Arabia and the United Arab Emirates. He also said the region benefited from some advance buying tied to Middle East uncertainty and price increases that took effect in early fiscal fourth quarter.
Asia-Pacific sales rose 24% to $27.3 million, or 18% on a constant-currency basis. Growth was led by China and Asia distributor markets, supported by promotional activity, online influencers, expanded distribution and some advance buying ahead of planned price increases.
Maintenance products and Specialist line gain traction
Brass said WD-40’s strategic “Must Win Battles” continued to show progress. Year-to-date sales of WD-40 Multi-Use Product increased 13% to $398 million, with growth of 20% in the U.S., 21% in China and 27% in Iberia.
The company also reported strong growth in premiumized products. Year-to-date sales of WD-40 Smart Straw and WD-40 EZ-REACH rose 19%, and the two formats now represent approximately 50% of WD-40 Multi-Use Product sales.
WD-40 Specialist sales increased 22% year to date to $72.9 million. Brass said the company remains in the early stages of expanding that line, noting that 90% of WD-40 Specialist sales currently come from 10 markets. In the third quarter, the company launched its first bio-based lubricant across several European markets and said early results were encouraging.
In response to an analyst question, Brass said Specialist growth was strong across regions, including China, the U.S. and Europe. He said six products account for about 80% of sales in the Specialist range, and that disciplined execution around the best-selling items has helped drive growth.
Margins hold in Q3, but cost pressure expected
Vice President and Chief Financial Officer Sara Hyzer said third-quarter gross margin was 56.6%, up 40 basis points from a year earlier. The increase was driven by lower aerosol can and fill fees, favorable sales mix and other mix benefits, partly offset by higher input costs.
Hyzer said the company entered the quarter with enough inventory to sustain margins, but expects recent cost increases to flow through production and inventory cycles over the next several months. She said WD-40 has implemented pricing and cost-saving initiatives across many regions, with most of the benefit expected in fiscal 2027.
Operating income increased 47% to $40.3 million. On a constant-currency basis, operating income rose 42%. Hyzer said the gap between sales growth and operating income growth demonstrated the leverage in the company’s business model. Adjusted EBITDA margin increased to 23% from 20% a year earlier.
On a non-GAAP basis, net income was $31.5 million, up 50% from the prior-year quarter. Non-GAAP diluted earnings per share were $2.33, compared with $1.54 a year earlier.
Home Care and Cleaning brands retained for now
Hyzer said WD-40 is no longer actively marketing its Americas Home Care and Cleaning brands for sale after determining that the current macro environment was not conducive to divesting the brands as a bundle. The assets have been reclassified as held for use.
The company continues to view the Home Care and Cleaning brands as non-core and will manage them as “harvest brands,” expecting gradual top-line decline while generating returns. Hyzer said the Americas household brands represent about $12 million in annual sales, or less than 2% of global revenue.
WD-40 also plans to transition away from its long-standing 55/30/25 business model after fiscal 2026. Hyzer introduced a new “enduring business model” focused on mid-to-high single-digit maintenance product sales growth, gross margin above 55%, adjusted EBITDA growing faster than net sales and an asset-light structure requiring minimal capital investment.
Company narrows fiscal 2026 outlook
WD-40 updated its fiscal 2026 guidance to include the Home Care and Cleaning assets and narrowed its expected ranges. The company now expects constant-currency net sales of $652 million to $667 million, representing growth of 6% to 9% versus pro forma fiscal 2025 net sales of $614 million. Reported net sales are expected to be $675 million to $690 million, representing growth of 10% to 12%.
Gross margin is expected to range from 54.5% to 55.5%. Hyzer said the updated outlook includes a 40-basis-point adjustment from the reclassification of the Home Care and Cleaning brands and an additional 60 basis points from higher-than-expected cost increases.
The company expects non-GAAP operating income of $107 million to $113 million and non-GAAP diluted earnings per share of $6.05 to $6.35, based on an estimated 13.5 million weighted average shares outstanding.
Hyzer said the fourth quarter outlook was affected by timing, as some demand shifted into the third quarter due to advance buying. She said the fourth quarter is still expected to be the company’s second-strongest quarter of the year.
Management also addressed pricing during the call. Brass said price increases have been implemented across Asia-Pacific and Europe, generally in the mid-to-high single-digit range, with larger increases on some bulk products. He said the price increases were smaller than those taken during the prior cost spike cycle and have been adopted with less pushback.
WD-40’s board also authorized a new share repurchase program of up to $100 million on June 15, 2026. The program has no expiration date, and repurchase timing and amounts will depend on market conditions and other factors.
About WD-40 (NASDAQ:WDFC)
WD-40 Company, headquartered in San Diego, California, is best known for its flagship WD-40® Multi-Use Product, a water-displacing spray used for lubrication, rust prevention and cleaning. Since its introduction in 1953 by the Rocket Chemical Company, the WD-40 brand has become a household and industrial staple. Over time, the company has broadened its portfolio to include complementary maintenance and cleaning brands such as 3-IN-ONE® oils, Lava® hand cleaners, Solvol® solvents, Spot Shot® stain removers and X-14® cleaning products.
WD-40 Company distributes its products in more than 176 countries through retail, industrial and automotive channels.
