WD-40 Q1 sales slide
Foreign currency translation has a negative impact on overall sales.
WD-40 Company reported first quarter 2020 net sales were $98.6 million, a 3% decrease compared to sales of $101.3 million for the same period a year ago.
The San Diego, Calif.-based maintenance products manufacturer also reported a first quarter net income of $12.2 million, down 8% from a net income of $13.3 million for the first quarter 2019. WD-40’s first fiscal quarter 2020 ended on Nov. 30, 2019.
According to WD-40, the translation of the company’s foreign subsidiary results from their currencies to U.S. dollars had a negative impact on first quarter sales. On a constant basis, total net sales for the quarter would have been $100.8 million.
Net sales of maintenance products – considered the primary growth focus for the WD-40 – decreased 3% to $89.7 million in the first quarter when compared to the prior year fiscal quarter. This decrease was due primarily to lower sales of WD-40 Multi-Use Product within the Asia-Pacific segment. Sales of homecare and cleaning products increased 1% to just under $9 million in the first quarter compared to the prior year fiscal quarter.
The bottom line: First quarter 2020 sales at WD-40 slip 3% as profits fall 8%.
What the CEO said: “If you follow us quarter to quarter, you may not like our results this quarter,” said Garry Ridge, WD-40 Company’s chairman and CEO. “Our business is one in which fluctuations in the performance of our markets from quarter to quarter are not unusual. That’s why we don’t issue quarterly guidance and why we frequently caution investors not to follow us too closely quarter to quarter.”
“We are playing the infinite game which is why it’s more important for investors to understand that our long-term strategic drivers are performing in-line with our expectations, than it is for them to be concerned about the performance of a particular market or segment in a finite period.”
“Overall, we acknowledge that our first quarter does not reflect the revenue growth we would like to see in our business. However, we expect a solid, steady year ahead as we continue to put our efforts behind the strategic initiatives we believe will help us achieve our ‘probably wrong and roughly right’ long-term revenue objectives,” Ridge concluded.
Company info: WD-40 Company’s full first quarter 2020 results can be viewed here.
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