Executive Summary

Q2 FY25 delivered 5% revenue growth to $146.1M, 220 bps gross margin expansion to 54.6%, and GAAP diluted EPS of $2.19 aided by a one-time $11.9M tax benefit; non-GAAP adjusted diluted EPS was $1.32 .
Against S&P Global consensus, WDFC missed on normalized EPS ($1.32 vs $1.42*) and revenue ($146.1M vs $154.4M*), with EBITDA also below ($25.3M vs $30.1M*); GAAP EPS headline “beat” reflects the non-cash tax release rather than operations .
Management raised FY25 guidance for gross margin (55–56%) and non-GAAP EPS ($5.25–$5.55), maintained net sales and operating income ranges, and lowered the tax rate to ~22.5% .
Mix was strongest in EIMEA (+10% YoY) and Latin America (Americas +3% YoY overall, with Brazil direct model tailwinds); Asia-Pacific was -1% YoY but showed March recovery, setting up a stronger H2 .
Near-term stock catalysts: upward EPS/gross margin guidance and EIMEA strength offset by normalized EPS/revenue/EBITDA misses and noted FX headwinds; watch execution on HCCP divestiture and tariff impacts (management expects minimal FY25 effect) .

What Went Well and What Went Wrong

What Went Well

Gross margin expanded 220 bps YoY to 54.6%, driven by lower can costs (110 bps) and specialty chemical input costs (90 bps); EIMEA gross margin rose to 58.1% and Americas to 50.1% .
EIMEA and Latin America volume strength: EIMEA sales +10% (Italy +28%, Benelux +27%, France +13%); Latin America WD-40 Multi-Use Product up 47% helped by the Brazil direct go-to-market .
Management raised full-year gross margin and EPS guidance; tone confident on offsetting tariffs via supply chain cost savings and diversified local manufacturing footprint .

Quote: “We’re particularly pleased with the volume performance…double-digit volume growth both in the second quarter and year to date, led by EIMEA…we continue to expand our gross margin” — CEO Steve Brass .

What Went Wrong

Revenue and normalized EPS misses vs consensus, and EBITDA below expectations, reflecting FX headwinds and SG&A/A&P timing; A&P was 5.1% of sales, tracking below full-year plan due to timing .
Asia-Pacific declined 1% YoY, with distributor markets down 8% (timing/FX pass-through) partially offset by China +5% and Specialist +10% .
FX masked operating income uplift from margin gains; management kept OI guidance unchanged and called out currency as the driver .

Financial Results

Consolidated Performance vs Prior Year and Prior Quarter

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$139.105	$153.495	$146.104
Gross Margin (%)	52.4%	54.8%	54.6%
Operating Income ($USD Millions)	$20.941	$25.122	$23.280
Net Income ($USD Millions)	$15.536	$18.925	$29.851
Diluted EPS (GAAP) ($)	$1.14	$1.39	$2.19

Note: Q2 FY25 included a non-cash, one-time tax release of $11.9M benefiting GAAP EPS by $0.87; non-GAAP adjusted diluted EPS was $1.32 .

Segment Breakdown (Net Sales)

Segment	Q2 2024 ($000s)	Q2 2025 ($000s)
Americas	$63,507	$65,529
EIMEA	$54,313	$59,575
Asia-Pacific	$21,285	$21,000
Total	$139,105	$146,104

Product Group Breakdown (Net Sales)

Product Group	Q2 2024 ($000s)	Q2 2025 ($000s)
WD-40 Multi-Use Product	$107,234	$113,692
WD-40 Specialist	$16,817	$18,562
Other Maintenance Products	$7,188	$7,063
HCCP (Homecare & Cleaning)	$7,866	$6,787
Total	$139,105	$146,104

KPIs

KPI	Q1 2025	Q2 2025
Gross Margin (%)	54.8%	54.6%
Adjusted EBITDA Margin (%)	18%	18%
A&P as % of Net Sales	5.5%	5.1%
Maintenance Products as % of Net Sales	95%	95%

Regional gross margin snapshot (from call): EIMEA 58.1%, Americas 50.1%, Asia-Pacific 58.4% in Q2 FY25 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales Growth (Pro Forma)	FY2025	6–11%, $600–$630M	6–11%, $600–$630M	Maintained
Gross Margin (%)	FY2025	54–55%	55–56%	Raised
A&P (% of Sales)	FY2025	~6%	~6%	Maintained
Operating Income ($M)	FY2025	$95–$100	$95–$100	Maintained (FX headwind cited)
Provision for Income Tax (%)	FY2025	~24%	~22.5%	Lowered
Diluted EPS (Non-GAAP) ($)	FY2025	$5.20–$5.45	$5.25–$5.55	Raised
Weighted Avg Shares (M)	FY2025	~13.5	~13.5	Maintained
Dividend per Share ($)	Q2 FY2025	$0.94 (declared)	$0.94 (paid Apr 30, 2025)	Maintained

Note: If HCCP divestiture is not completed, guidance would be positively impacted by ~$23M net sales, ~$6M operating income, and ~$0.33 diluted EPS for FY2025 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Supply chain optimization	Global strategy, cost savings, inventory reduction; ERP rollout; AI/process productivity	Cost savings expected to largely offset FY25 tariffs; diversified local manufacturing footprint	Strengthening; derisked footprint with tangible savings
Tariffs/macro	Oil cost assumption ($70–$90) discussed; limited explicit tariff focus	Minimal global impact expected in FY25; localized manufacturing in China for China; monitoring Mexico/Canada (~6% of business)	Managed risk; near-term impact minimal
FX	Functional currency change for UK/EIMEA to euro; constant-currency framing	FX headwind masking OI improvement; potential euro tailwind if it holds	Headwind currently; possible H2 tailwind
Premiumization	+11% in FY24	YTD Smart Straw/EZ-REACH +11%; targeting >10% CAGR	Continuing growth
Regional trends	Latin America strong; EIMEA and Asia distributor momentum	EIMEA +10%; Americas +3% (Brazil direct tailwinds); Asia-Pacific -1% with March recovery	EIMEA leading; APAC recovery into H2
HCCP divestiture	Expected 1H FY25; pro forma guidance basis	Assets held-for-sale; bank engaged; updates pending; pro forma guidance excludes tax benefit/HCCP	Progressing; nearing completion
Digital commerce	E-commerce +12% FY24; global “Repair Challenge”	YTD e-commerce +9%; “Training the Trades” reach expanded	Ongoing build
People/ESG/ERP	Employee engagement 93% FY24; ERP 50% rollout	Employee engagement 94%; additional ERP rollouts planned	Organizational strengthening

Management Commentary

Strategic focus: “Few things, many places, bigger impact” across core maintenance products and geographic expansion (Brazil/Mexico direct models, China sampling and distribution, EIMEA hubs) .
Margin trajectory: “We believe we will achieve gross margin of between 55% and 56% in fiscal year 2025, 1 year earlier than previously projected” — CFO Sara Hyzer, with can and specialty chemical cost tailwinds and continued supply chain initiatives .
Tariffs: “We currently believe…supply chain optimization and cost-saving measures will largely offset any impact of tariffs for the remainder of this fiscal year” — CEO Steve Brass .
FX: OI guidance held flat due to FX masking margin improvements; euro strength could be a tailwind if it holds .
Asia cadence: Distributor timing/FX pass-through pressured Q2, but recovery began in March; expecting strong H2 .

Q&A Highlights

Tariffs: Company expects minimal global impact due to localized manufacturing; monitoring Americas (Mexico/Canada) more closely; cost savings to offset FY25 impact .
FX and guidance: OI unchanged despite higher gross margin due to FX headwinds; euro firming could provide upside if sustained .
Supply chain diversification: Multi-pronged optimization (diversified geographic footprint, supplier partnerships); onboarding new aerosol filler can take 18–24 months .
A&P/SG&A cadence: A&P below full-year plan in H1 due to timing; investments ramp in H2 to reach ~6%; SG&A increases tied to employee incentives, ERP, and Brazil expenses .
Asia and Brazil phasing: APAC slower start given strong prior-year comp; Brazil’s direct model growth concentrated in H1 .

Estimates Context

Metric	Q2 2025 Consensus	Q2 2025 Actual	Surprise
Revenue ($USD Millions)	$154.4*	$146.1	Miss
Primary EPS (Normalized) ($)	$1.42*	$1.32	Miss
EBITDA ($USD Millions)	$30.1*	$25.27	Miss

Values marked with * retrieved from S&P Global.
Additional context: Q1 2025 revenue beat ($153.5M vs $147.4M*), while normalized EPS beat ($1.39 vs $1.26*) .

Coverage note: Very limited analyst participation (e.g., 1 estimate for revenue and EPS in recent quarters*), which can increase volatility relative to consensus.

Key Takeaways for Investors

Operational quality continues to improve: gross margin now tracking 55–56% for FY25, with supply chain cost initiatives and premiumization supporting mix .
The Q2 “miss” vs consensus is largely FX/timing and A&P phasing; GAAP EPS strength reflects one-time tax release — focus on non-GAAP EPS and EBITDA/volume trends .
EIMEA is the growth engine, Latin America remains strong with Brazil’s direct model; APAC recovery underway into H2 (watch distributor order timing and FX pass-through) .
Guidance constructive: EPS and margin raised; net sales and OI maintained; if HCCP divestiture slips, reported results likely trend to the high end via add-back (+$23M sales, +$6M OI, +$0.33 EPS) .
Near-term trading setup: upward EPS/margin guidance vs normalized EPS/revenue/EBITDA misses; limited sell-side coverage heightens reaction risk; monitor FX, tariff headlines, and H2 A&P ramp .
Capital returns steady (dividend $0.94, buybacks to offset equity issuance); asset-light capex (1–2% of sales) supports FCF resilience .
Strategic narrative: “few things, many places, bigger impact” — expect continued focus on core maintenance brands, premium formats (>10% CAGR target), and digital/ESG/ERP execution to sustain mid-single-digit to high-single-digit top-line growth with improving profitability .

WD 40 CO (WDFC)·Q2 2025 Earnings Summary