Why WD-40 Stock Sank Today

1 day ago 5

Josh Kohn-Lindquist, The Motley Fool

Fri, January 9, 2026 astatine 11:09 AM CST 3 min read

WD-40's income roseate 1%, but its net per stock dropped 8%.
However, the company's specialty income spiked by 18% and gross margins improved.
WD-40 believes it could quadruple its planetary income implicit the agelong haul, truthful a 1% income maturation complaint shouldn't beryllium the norm.
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Shares of rust and corrosion preventor WD-40 Company (NASDAQ: WDFC) -- celebrated for its blue-and-yellow canisters -- were down 7% arsenic of 11 a.m. ET connected Friday. This diminution stems from the company's first-quarter net connected Thursday afternoon, which fell abbreviated of analysts' expectations. Sales inched 1% higher, but net per stock (EPS) slid 8%. Trading astatine 31 times net earlier the report, this sell-off is understandable, considering the stock's lofty valuation.While absorption reaffirmed guidance for 2026, the midpoint of its EPS projections leaves the institution trading astatine 32 times adjacent year's earnings, which means the institution isn't blatantly "cheap," adjacent aft its banal has declined 34% since precocious 2024.

These results were underwhelming. However, determination wasn't thing dramatically atrocious astir them. In fact, I'd reason determination are reasons for optimism. First, management's absorption connected premium products (such arsenic its Smart Straw and EZ Reach) and specialty offerings (white lithium grease, gel lube, degreaser, silicone speedy dry, interaction cleaner, and more) seems to beryllium paying off. Gross margins roseate 140 ground points, and the specialty portion saw income emergence by 18%, truthful WD-40 is producing tangible results successful these areas.

Numerous achromatic arrows pointing up connected greenish squares beryllium successful the backmost drop, with a reddish arrowing pointing down connected a achromatic square, beforehand and center.

Furthermore, Chief Executive Officer Steve Brass explained that the income softness successful Q1 was "primarily owed to timing-related factors wrong our selling distributor network, not a diminution successful end-user demand." Setting Q1 aside, WD-40 has ambitions to quadruple its income extracurricular of the U.S. implicit the agelong haul -- truthful this extremity shouldn't beryllium seen arsenic "missed" aft conscionable 90 days of information. Targeting annualized gross maturation of 6.5% successful the Americas, 9.5% successful Europe, and 11.5% successful Asia, WD-40 could turn into its premium valuation if it meets interior expectations going forward.

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