WD-40 reports progress beneath foreign currency flurries

WD-40 Company reported a net sales decline in the first quarter, though the company attributed the decrease to foreign currency fluctuations and pointed to strength in its core segments.

Net sales for the quarter ended Nov. 30, 2015 were $92.5 million, down 4% year-over-year. However, on a constant currency basis, total net sales would have been $96.2 million.

Meanwhile, net income was $12.1 million, an increase of 12% over the prior year. Additionally, gross margin grew from 51.6% to 55.6%.

"Although foreign currency exchange rate fluctuations negatively impacted our reported sales, we continue to see maintenance product sales growth in local currencies in nearly all our markets," said Garry Ridge, WD-40 Company's president and CEO.



"Our European markets, in particular, continue to be heavily impacted by the weakening of the euro against the pound sterling as well as the strength of the U.S. dollar," he added. "When we remove all foreign currency exchange rate impacts, we grew consolidated sales by about half a percentage point which is a little lighter than we would have liked to see. This was caused by the timing of customer orders and promotional activities as well as unstable market conditions in Russia. While we expect we will continue to see fluctuations in the performance of certain markets quarter to quarter, our long-term growth plans remain unchanged."

The company also updated its guidance for fiscal year 2016, with net sales growth projected to be between 4 and 6% with net sales in the range of $393 million and $401 million.