Q4 Profit Falls 32% as Input Costs Squeeze Margins; FY27 Guidance Below Run-Rate
WDFC is trading near its 52-week low of $175.38 (9.8% above the low) on elevated volume (2.4× avg).
Summary
Full-year sales rose 11% to $688.0M and non-GAAP EPS grew 6% to $6.18, but the fourth quarter is what will drive the tape: sales of $176.8M and net income of $14.4M, with operating income falling 32% to $19.1M and EPS dropping to $1.06 from $1.56 as gross margin slid to 52.8% from 54.7% on higher specialty chemical and freight costs. Management called Q4 the low point for gross margin and expects sequential improvement starting in Q1 FY2027. After the quarterly beat the company raised its annual sales outlook, with the FY2027 guide at sales of $715-735M, implying 4-7% growth, a step down from the 11% just delivered, and EPS of $6.40-6.70, only 5-10% growth off a non-GAAP base; the outlook also includes gross margin of 54.0-55.5%, operating income of $114-120M and a 22.5-23.5% tax rate. SG&A jumped 19% in Q4 on incentive comp and freight, and advertising rose 26%, so cost pressure is broad, not one-off. The $1.02 quarterly dividend declared October 8 is unchanged in substance and the $100M buyback authorized in June took effect September 1, with $7.0M repurchased in Q4. The earnings call is at 2:00 p.m. PDT today.
Updated with an SEC 8-K filing · What changed
Updates
· SEC 8-K — FY27 guidance also includes net sales of $715-735M, gross margin of 54.0-55.5%, operating income of $114-120M and a 22.5-23.5% tax rate.
At the time of this announcement, WDFC was trading at $192.56 on NASDAQ in the Manufacturing sector, with a market capitalization of approximately $2.6B. The 52-week trading range was $175.38 to $298.90. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: BusinessWire.