WD-40 Company ((WDFC)) has held its Q3 earnings call. Read on for the main highlights of the call.

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WD-40 Company’s latest earnings call struck an upbeat tone, as management highlighted a powerful combination of double‑digit revenue growth, record maintenance-product sales, and expanding profitability. Executives acknowledged near-term headwinds from geopolitically driven input-cost spikes and demand phasing, but stressed that pricing actions, cost savings, and a new margin-focused model should keep earnings growth ahead of sales.

Strong Consolidated Revenue Growth

Consolidated net sales jumped 24% year over year to $195.0 million in Q3 fiscal 2026, underscoring robust demand across WD-40’s core franchises. Maintenance products, now 97% of total revenue, grew 26% to $190 million, or 22% on a constant-currency basis, showing the engine of the business remains firmly in high gear.

Record Performance in Maintenance Products

Maintenance products set a new company record and surpassed long-term growth targets, as both direct and distributor channels contributed. Direct markets sales surged 28% while marketing distributor markets climbed 18%, confirming that WD-40’s core proposition is resonating with professional and consumer users worldwide.

Operating Income and EBITDA Expansion

Profitability accelerated faster than sales, with operating income rising 47% to $40.3 million, or 42% on a constant-currency basis, highlighting clear operating leverage. Adjusted EBITDA margin widened to 23% from 20% a year earlier, signaling that scale and disciplined cost management are translating top-line momentum into bottom-line gains.

Gross Margin Improvement

Q3 gross margin increased by 40 basis points to 56.6%, driven by a more favorable cost and product mix backdrop. Lower aerosol can and fill fees contributed about 80 basis points, while a richer mix added another 60 basis points, partially offset by roughly 60 basis points of higher input costs that foreshadow rising pressure.

Regional Strength Across Americas, EMEA, Asia Pacific

Growth was broad-based, with the Americas leading as sales rose 29% to $101 million on strong WD-40 Multi-Use gains in the U.S. and Latin America. EMEA sales were up 17% to $66.6 million, or 10% in constant currency, while Asia Pacific climbed 24% to $27.3 million, with China and distributor markets driving 18% constant-currency growth.

WD-40 Multi-Use and Premiumization Momentum

Year-to-date, WD-40 Multi-Use product sales increased 13% to $398 million, confirming the durability of the flagship line. Premium formats such as Smart Straw and EZ-REACH grew a combined 19% and now account for roughly half of Multi-Use sales, supporting both revenue growth and margin expansion as customers trade up.

WD-40 Specialist Outperformance and Innovation

WD-40 Specialist continues to outpace the core, with year-to-date sales up 22% to $72.9 million and Q3 Specialist revenue rising about 31%, reflecting growing adoption in targeted applications. The company also introduced its first bio-based lubricant in Europe, where early uptake has been encouraging, and further rollouts are planned to extend the innovation pipeline.

Digital Commerce and Ecommerce Growth

Digital channels remained a bright spot, with ecommerce, including pure-play online retailers, growing 22% year to date, led by the United States and China. Management emphasized that digital and social media are expanding reach and reinforcing the company’s “Must-Win Battles” strategy by connecting with users across more touchpoints.

High-Impact Promotions and Distribution Gains

A high-profile U.S. promotion featuring WD-40, Disney, and The Home Depot delivered strong incremental volume, with roughly 75% of sales considered incremental after one month, underscoring the power of co-branded campaigns. Distribution also widened, highlighted by about 7,000 new outlets added through a dollar-store channel rollout, which should support future volume.

Capital Allocation and New Share Repurchase Plan

The board authorized a new open-ended $100 million share repurchase program, signaling confidence in the company’s cash generation and balance sheet strength. Management framed buybacks as a complement to ongoing investment in growth initiatives, reinforcing a balanced capital allocation approach aimed at rewarding shareholders while funding strategic priorities.

Near-Term Input Cost Pressure and Margin Outlook

Geopolitical events in the Middle East have driven sharp increases in key inputs, with some specialty chemicals and base oils rising 50% or more in a short span, and these costs will filter through production and weigh on margins. As a result, the company lowered its FY26 gross margin outlook to 54.0%–55.5%, acknowledging about 100 basis points of pressure from both home care reclassification and higher-than-expected input costs.

Demand Phasing and Advanced Buying Effects

Some customers advanced purchases into Q3 ahead of price hikes and supply concerns, shifting roughly $3 million of expected Q4 demand into the current quarter, which flattered near-term comparisons. Management warned that this demand phasing will create tougher comparisons and some quarterly noise, though underlying demand trends remain favorable.

Home Care & Cleaning Reclassification Strategy

In the Americas, the home care and cleaning portfolio is now classified as held for use and will be run as harvest brands rather than aggressively marketed as a bundle, prompting a $1.3 million amortization catch-up in Q3. The shift adds about $12 million of sales and $2.9 million of operating income to FY26, though management expects this business to gradually decline as focus tightens on higher-margin maintenance products.

Pricing Actions, Input Volatility, and Promotional Mix

WD-40 has implemented mid- to high-single-digit price increases across Europe and Asia Pacific, following earlier moves in the U.S., but commodity and input-cost volatility could necessitate further pricing or margin actions in FY27. Advertising and promotion spending increased to 6.1% of net sales from 5.8% as the company leaned into U.S. promotions, while home care and cleaning sales fell 9%, reflecting the strategic pivot toward its core maintenance portfolio.

Updated FY26 Guidance and Forward Outlook

For fiscal 2026, WD-40 now expects constant-currency net sales of $652–$667 million, implying 6%–9% growth versus pro forma FY25, and reported net sales of $675–$690 million, or 10%–12% growth including reclassified home care assets. Non-GAAP operating income is projected at $107–$113 million and diluted EPS at $6.05–$6.35, up 5%–11%, with management noting that most pricing and cost-saving gains should fully materialize by FY27.

WD-40’s earnings call painted the picture of a company leveraging its iconic brand and premium formats to drive robust growth while navigating a tougher cost environment. Revenue strength, margin expansion, and disciplined capital allocation underpin a constructive outlook, even as input-cost spikes and demand phasing temper near-term visibility, leaving investors focused on execution of the company’s margin-first strategy.