Shares of WD-40 Company (NASDAQ: WDFC) rallied more than 12% on Friday, reaching their highest level in nearly 20 months, after the lubricant and household products maker delivered fiscal third-quarter results that significantly exceeded Wall Street expectations. The performance underscores the enduring strength of traditional consumer staples even as markets focus heavily on artificial intelligence and technology stocks.
Strong Global Sales Drive Earnings Beat
For the fiscal third quarter, WD-40 reported revenue of $195.1 million, a 24% increase year-over-year and well above the consensus estimate of $172.8 million, according to FactSet. Adjusted earnings per share came in at $2.33, comfortably surpassing the $1.56 analysts had forecast.
Growth was broad-based across all regions. Revenue rose 29% in the Americas, 24% in Asia-Pacific, and 17% in Europe, India, the Middle East and Africa (EIMEA). The company attributed the strong performance in the Americas to expanded distribution, robust e-commerce sales, and promotional campaigns, including a limited-edition "King of the Hill" can created in collaboration with Disney and Home Depot.
Raised Guidance and Analyst Optimism
WD-40 also raised its full-year adjusted earnings guidance to a range of $6.05 to $6.35 per share, up from its previous outlook of $5.75 to $6.15. The revised forecast exceeded analysts' consensus estimate of $6.01. For the full fiscal year, the company expects revenue between $652 million and $667 million, excluding foreign exchange fluctuations, compared to the analyst consensus of approximately $668.9 million.
Following the results, DA Davidson maintained its Buy rating and raised its price target to $305 from $270, describing the quarter as a significant earnings beat. The firm noted that stronger revenue growth and higher gross margins flowed through to profits while the company's cost structure remained relatively stable. However, analysts cautioned that part of the strong sales growth reflected customers placing orders ahead of planned price increases in Europe and Asia later this summer, which could temper fourth-quarter revenue growth.
Jefferies also raised its price target to $245 from $229 while maintaining its Hold rating. The firm warned that higher input costs could squeeze margins through the first half of fiscal 2027, despite recently announced price hikes.
Old Economy Resilience in a Tech-Driven Market
Friday's rally saw WD-40 outperform many AI-linked names, as investors rewarded the company's earnings beat and improved profit outlook. While WD-40 has adopted artificial intelligence across its supply chain and business operations, the latest results reflected continued strength in its core product portfolio and traditional sales execution.
The company's performance highlights the potential for established industrial and consumer goods companies to deliver strong returns even as market attention shifts toward technology. For context, other traditional economy stocks have also shown resilience recently. For instance, Delta Air Lines Q2 Earnings Beat: Analyst Urges Investors to Buy the Dip demonstrated similar strength in the airline sector. Meanwhile, ITW Stock Forms Bullish Inverted Head-and-Shoulders Pattern Amid Earnings Anticipation suggests other industrial names may be poised for gains.
Outlook and Risks
WD-40 has benefited from consistent demand for its flagship products, following an 11% sales increase in the previous quarter. However, analysts caution that higher input costs could pressure margins in the coming quarters. Both DA Davidson and Jefferies acknowledged the strength of the third-quarter performance but noted potential headwinds from rising raw material costs and the impact of price increases on demand.
The results underscore continued consumer demand for WD-40's core products despite a market environment increasingly focused on artificial intelligence and technology-related stocks. As investors seek diversification, the company's performance serves as a reminder that traditional economy stocks can still deliver strong returns.
This article is for informational purposes only and does not constitute financial advice.
