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Key takeaways from the call include:
The company also discussed its progress on its “Must-Win Battles,” focusing on product premiumization, geographic expansion, WD-40 Specialist growth, and digital commerce acceleration. Despite global sales of WD-40 Multi-Use Product growing below expectations, the company expects growth to return to historic levels.
WD-40 reported improved gross margins in the fourth quarter, driven by price increases across all markets and geographies. Higher costs associated with specialty chemical costs and aerosol cans had a negative impact on gross margin. The company aims to return the gross margin to its 55% target over the long term.
According to InvestingPro Data, the company’s Adjusted Market Cap stands at 2770M USD and its P/E Ratio at 43.57, which is relatively high, indicating that the firm is trading at a high earnings multiple. This aligns with one of the InvestingPro Tips, which points out that WD-40 is trading at a high earnings multiple.
The company expects net sales growth of 6% to 12% for fiscal year 2024, with gross margins projected to be between 51% and 53%. Net income is expected to be between $65 million and $70 million, with diluted earnings per share estimated to be between $4.78 and $5.15. The InvestingPro Data also reveals a positive year-to-date price total return of 28.9%, reflecting the market’s positive response to the company’s performance.
WD-40 also discussed its goals of geographic expansion and premiumization of its products to accelerate revenue growth. The company expects topline growth of 6% to 12% but anticipates a lower EPS due to increased SG&A costs, additional non-cash amortization expenses from a new ERP system, and an increased tax rate.
The company’s future plans include the expansion of its filler network in the US and Europe and the addition of multiple suppliers for cans. They are also conducting ongoing strategic reviews for potential acquisitions and partnerships to accelerate geographic expansion.
InvestingPro Tips also highlights that WD-40 operates with a high return on assets and has maintained dividend payments for 31 consecutive years. This demonstrates the company’s financial stability and commitment to rewarding its shareholders. For more insights like these, check out the InvestingPro product that includes additional tips here.
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