Executive Summary

Q4 2025 delivered a solid finish: revenue $163.5M (+5% YoY), gross margin 54.7% (+60 bps YoY), operating income $28.0M (+17% YoY), and diluted EPS $1.56 (+27% YoY) .
Clear beats vs S&P Global consensus: revenue $163.5M vs $153.9M (+6.2%), EPS $1.56 vs $0.82 (+90%), EBITDA $30.1M vs $26.4M (+14%) — reflecting stronger maintenance products and margin recovery; estimates from S&P Global*.
FY26 pro forma guidance introduced: net sales $630–$655M (+5–9%), gross margin 55.5–56.5%, operating income $103–$110M (+5–12%), EPS $5.75–$6.15; management plans to fully utilize its remaining buyback authorization in FY26 .
Strategic narrative: premiumization, supply-chain cost reductions, and geographic expansion underpin sustained >55% gross margin; Americas softness offset by strength in EIMEA and Asia distributors .

What Went Well and What Went Wrong

What Went Well

Maintenance products up 6% YoY in Q4; WD‑40 Specialist up 11% YoY, with EIMEA direct markets driving strength (DACH, France) .
Gross margin recovery ahead of plan: FY25 55.1% (55.6% excluding assets held for sale); Q4 54.7%, supported by lower specialty chemical costs and higher ASPs/premiumization .
Strategic clarity and capital returns: FY26 guidance targets sustained >55% GM; management to accelerate buybacks and fully utilize remaining authorization, signaling confidence .
- “Looking ahead, we plan to accelerate our share repurchase activity and fully utilize our remaining authorization—reflecting our strong conviction in the long-term fundamentals of the business…” .

What Went Wrong

Americas segment down 2% YoY in Q4, with WD‑40 Multi-Use declines in Latin America and U.S.; higher warehousing/distribution/freight costs pressured margin mix .
Sales mix headwinds: 140 bps gross margin impact from unfavorable mix (market and product mix, including bulk vs premiumized formats) .
Ongoing transition in homecare and cleaning (HCCP): Q4 HCCP down 9% YoY; portfolio divestitures continue (UK sale completed; Americas HCCP still for sale) .

Financial Results

Metric	Q4 2024	Q3 2025	Q4 2025
Revenue ($USD Millions)	$156.0	$156.9	$163.5
Gross Margin (%)	54.1%	56.2%	54.7%
Operating Income ($USD Millions)	$24.1	$27.4	$28.0
Net Income ($USD Millions)	$16.8	$21.0	$21.2
Diluted EPS ($)	$1.23	$1.54	$1.56
Advertising & Promotion ($USD Millions)	$10.9	$9.16	$12.47

Segment breakdown (Net Sales):

Segment	Q4 2024 ($M)	Q4 2025 ($M)	YoY Change
Americas	$79.2	$77.5	(2%)
EIMEA	$58.6	$62.7	+7%
Asia-Pacific	$18.2	$23.3	+28%
Total	$156.0	$163.5	+5%

Product group breakdown (Net Sales):

Product Group	Q4 2024 ($M)	Q4 2025 ($M)	YoY Change
WD‑40 Multi‑Use Product	$119.0	$125.0	+5%
WD‑40 Specialist	$20.1	$22.2	+11%
Other Maintenance	$8.47	$8.51	—
HCCP	$8.50	$7.73	(9%)
Total	$156.0	$163.5	+5%

Consensus vs Actual (S&P Global):

Metric	Q4 2025 Consensus	Q4 2025 Actual	Surprise
Revenue ($USD Millions)	$153.9*	$163.5	+6.2%*
EPS ($)	$0.82*	$1.56	+90%*
EBITDA ($USD Millions)	$26.4*	$30.1*	+14%*

Values retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales (currency-adjusted)	FY26	—	$630–$655M (+5–9%)	New
Gross Margin %	FY26	—	55.5–56.5%	New
Advertising & Promotion (% of Sales)	FY26	—	~6%	New
Operating Income	FY26	—	$103–$110M (+5–12%)	New
Provision for Income Taxes	FY26	—	22.5–23.5%	New
Diluted EPS	FY26	—	$5.75–$6.15	New
Dividend	Q4 2025	$0.94 declared (June guidance carried)	$0.94 payable Oct 31	Maintained
FY25 Net Sales (pro forma)	FY25	$600–$630M	$600–$620M	Narrowed
FY25 Gross Margin %	FY25	55–56%	55–56%	Maintained
FY25 Operating Income	FY25	$95–$100M	$96–$101M	Raised
FY25 Diluted EPS	FY25	$5.25–$5.55	$5.30–$5.60	Raised

Note: FY26 guidance excludes the financial impact of assets expected to be divested; if Americas HCCP divestiture does not occur, FY26 guidance would be positively impacted by ~$12.5M revenue, ~$3.6M operating income, ~$0.20 EPS .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4)	Trend
Gross Margin Recovery	Raised FY25 GM guidance to 55–56%; Q3 GM 56.2% (+310 bps YoY)	FY25 GM 55.1% (55.6% excl. assets held for sale); Q4 GM drivers: lower specialty chemical costs (+110 bps), higher ASPs/premiumization (+110 bps)	Sustained >55% targeted in FY26
Premiumization	Q2/Q3: pricing/mix benefits; Specialist growth double-digit	Premiumization aids ASPs; Specialist at higher margins; Smart Straw/Easy Reach leveraged across Specialist	Positive margin tailwind
Supply Chain & Cost Actions	Continued sourcing/logistics gains; gross margin protected	Cost-saving initiatives to carry into FY26; AI-enabled systems (D365, Salesforce) to drive productivity	Operational efficiency improving
Geographic Expansion	EIMEA direct markets strong; Asia distributors and China improving	Asia distributors strong (Indonesia, Malaysia, Singapore, Philippines); EIMEA DACH/France strong; Americas softer	Mixed: APAC/EIMEA strong; Americas softness
Portfolio Optimization (HCCP)	FY25 pro forma guidance excludes assets held for sale	UK HCCP sale completed; Americas HCCP sale ongoing	Divestiture progress
Capital Returns	Dividend $0.94; buyback authorization extended to Aug-26	Plan to accelerate buybacks and fully utilize authorization in FY26	More aggressive repurchases

Management Commentary

“Gross margin continues to strengthen and has now exceeded our target of 55 percent… Q4 gross margin reached 54.7%—a 730-basis-point improvement compared to Q4 FY2021” .
“We plan to accelerate our share repurchase activity and fully utilize our remaining authorization—reflecting our strong conviction in the long-term fundamentals of the business” .
“Global attainable market for WD‑40 Multi‑Use Product ≈ $1.9B; we’ve achieved only 25%—leaving ≈ $1.4B growth opportunity” .
“Q4 gross margin favorable drivers: lower specialty chemical costs (+110 bps), higher ASPs including premiumization (+110 bps); headwinds: sales mix (−140 bps), higher warehousing/distribution/freight (−60 bps)” .

Q&A Highlights

Clarified pro forma vs GAAP reporting and FY25 EPS pro forma of $5.50 used for guidance comparisons .
Mix headwinds detail: sales mix across direct vs distributor and product mix (premium formats, bulk, Specialist vs Multi‑Use) explained; premiumization remains a tailwind .
FY26 gross margin influences: oil costs could be small tailwind if stable; pipeline cost savings and sourcing wins carry forward .
Asia-Pacific runway: “very long runway” in distributor markets; expect Q1 inventory normalization then rebound later in FY26 .
Specialist premiumization: Smart Straw/Easy Reach applied to Specialist SKUs; Specialist generally margin accretive .

Estimates Context

Q4 2025 beats: revenue $163.5M vs $153.9M consensus; EPS $1.56 vs $0.82; EBITDA $30.1M vs $26.4M, reflecting stronger EIMEA/APAC and margin execution; estimates from S&P Global*.
Q1 2026 consensus: revenue ~$155.1M*, EPS ~$1.445* — setup implies normalizing seasonality with focus on sustaining >55% GM.
Values retrieved from S&P Global.

Key Takeaways for Investors

Strong execution beat: broad-based revenue/EPS/EBITDA beats vs consensus, supported by margin recovery and APAC/EIMEA strength; Americas softness bears watching ; estimates from S&P Global*.
Margin durability: actions in sourcing, pricing/premiumization, and logistics support sustained >55% GM in FY26; monitor mix and freight cost headwinds .
Capital returns catalyst: accelerated buybacks in FY26 and consistent dividend policy (>50% of earnings) provide support to the stock .
Strategic focus: maintenance products (95% of net sales) remain the growth engine; Specialist and premium formats deepen margin and category leadership .
Portfolio simplification: UK HCCP sale complete; Americas HCCP divestiture progress is a watch item with potential positive impact if retained per guidance sensitivity .
Near-term trading: expect attention on sequential margin trajectory (Q3 56.2% → Q4 54.7%) and Americas demand trends; consensus revisions likely upward after beats*.
Medium-term thesis: geographic expansion, premiumization, digital enablement, and cost discipline underpin multi-year growth with disciplined capital allocation .

Footnotes:
*Values retrieved from S&P Global.

WD 40 CO (WDFC)·Q4 2025 Earnings Summary