-- WD-40 (WDFC) reiterated its full-year outlook despite the potential impact from the Middle East conflict, while the maker of lubricants and cleaning products recorded year-over-year gains in its fiscal second-quarter results.
The company continues to project per-share earnings to come in between $5.75 and $6.15 for fiscal 2026, it said late Thursday, while three analysts polled by FactSet are looking for $6.04. Sales are still pegged at $630 million to $655 million, after adjusting for foreign-currency impacts, compared with the $658.2 million consensus based on the same number of analysts.
"While geopolitical developments in the Middle East and their potential impact on the global economy warrant caution, we are encouraged by the momentum in the business," Chief Financial Officer Sara Hyzer said during an earnings call, according to a FactSet transcript. "We have clear visibility in promotional activity in the US, and are seeing improving momentum in both (Europe, India, the Middle East and Africa) and Asia-Pacific."
Earlier in the week, the US and Iran agreed to a two-week ceasefire, but Tehran later accused Washington of breaching certain elements of the truce. The war started at the end of February, sending energy prices soaring amid the closure of the crucial Strait of Hormuz.
The conflict has contributed to the increased costs of certain petroleum-based specialty chemicals, which are expected to increase the company's costs of products sold, Hyzer said on the call. "The duration of this conflict and its impact on our raw materials will drive our decisions around mitigation efforts, which we are currently assessing," according to Hyzer.
Hyzer said WD-40 is advancing in its process to sell its American homecare and cleaning brand. In the fourth quarter of fiscal 2025, the firm completed the sale of its homecare and cleaning portfolio in the UK.
If the company isn't able to divest the Americas homecare and cleaning brand, it expects its full-year EPS and sales guidance to be positively impacted by $0.20 a share and about $12.5 million, respectively, the CFO added.
For the three-month period ended Feb. 28, adjusted EPS climbed 14% to $1.50. Sales inclined 11% on a yearly basis to $161.7 million. Revenue from maintenance products grew 13% to $156.8 million, while homecare and cleaning sales dropped 29% to $4.8 million.
"We capitalized on strong momentum in the second quarter," Chief Executive Steve Brass said in the earnings release. "Maintenance products remain our core strategic focus, and sales of these brands grew 6% in constant currency in the second quarter in line with our long term growth expectations."
Sales grew across all regions, led by a 19% jump in Asia Pacific, WD-40 said.