WD-40 Co shares (NASDAQ: WDFC) are up nearly 15% in premarket trading on Friday after the California-headquartered company reported solid results for the fiscal second quarter despite inflation hurting its margin.
Key takeaways from WD40 Q2 earnings report
- Net income printed at $19.5 million versus the year-ago figure of $17.2 million.
- Per-share earnings stood at $1.41, an increase from last year’s $1.24.
- At $130 million, sales noted a 16% growth on a year-over-year basis.
- FactSet consensus was for $1.07 of EPS on $126.8 million in sales.
- Gross margin slid from 55.4% to 50.4%, as per the earnings report.
Earlier this week, D.A. Davidson cited inflation and some exposure to Russia as it downgraded WD40 to “underperform” with a price target of $157 that represents a 20% downside from here.
Fiscal 2022 outlook and CEO’s remarks
For fiscal 2022, WD40 forecasts its sales to fall in the range of $522 million to $547 million, in line with Street expectations. It, however, trimmed its guidance for per-share earnings, blaming inflation, to between $5.14 and $5.27.
In the earnings press release, CEO Garry Ridge expressed confidence that the supply chain was improving.
We are off to a solid start in fiscal 2022 and have seen significant improvements to our supply chain in the U.S. But, we’re in a challenging inflationary environment that’s hitting our gross margin. We’ll restore it in the near-term with price increases.
The post WD40 shares opened 15% up on Friday: here is why appeared first on Invezz.
Source: https://invezz.com/news/2022/04/08/wd40-shares-opened-15-up-on-friday-here-is-why/