Household products company WD-40 (NASDAQ: WDFC) beat Wall Street’s revenue expectations in Q2 CY2026, with sales up 24.3% year on year to $195.1 million. The company’s full-year revenue guidance of $682.5 million at the midpoint came in 3.4% above analysts’ estimates. Its GAAP profit of $2.24 per share was 43% above analysts’ consensus estimates.
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WD-40 (WDFC) Q2 CY2026 Highlights:
- Revenue: $195.1 million vs analyst estimates of $173 million (24.3% year-on-year growth, 12.8% beat)
- EPS (GAAP): $2.24 vs analyst estimates of $1.57 (43% beat)
- The company lifted its revenue guidance for the full year to $682.5 million at the midpoint from $642.5 million, a 6.2% increase
- EPS (GAAP) guidance for the full year is $6.20 at the midpoint, beating analyst estimates by 3.5%
- Operating Margin: 20.7%, up from 17.4% in the same quarter last year
- Free Cash Flow Margin: 15%, down from 21.6% in the same quarter last year
- Market Capitalization: $3.02 billion
Company Overview
Short for “Water Displacement perfected on the 40th try”, WD-40 (NASDAQ: WDFC) is a renowned American consumer goods company known for its iconic and versatile spray, WD-40 Multi-Use Product.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $674.7 million in revenue over the past 12 months, WD-40 is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with retailers. On the bright side, it can grow faster because it has a longer list of untapped store chains to sell into.
As you can see below, WD-40 grew its sales at a decent 8.6% compounded annual growth rate over the last three years. This shows its offerings generated slightly more demand than the average consumer staples company, a helpful starting point for our analysis.
This quarter, WD-40 reported robust year-on-year revenue growth of 24.3%, and its $195.1 million of revenue topped Wall Street estimates by 12.8%.
Looking ahead, sell-side analysts expect revenue to grow 3% over the next 12 months, a deceleration versus the last three years. This projection doesn’t excite us and suggests its products will see some demand headwinds. At least the company is tracking well in other measures of financial health.
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Cash Is King
Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.
WD-40 has shown robust cash profitability, driven by its attractive business model that enables it to reinvest or return capital to investors. The company’s free cash flow margin averaged 12.5% over the last two years, quite impressive for a consumer staples business.
Taking a step back, we can see that WD-40’s margin dropped by 1.5 percentage points over the last year. We’re willing to live with its performance for now but hope its cash conversion can rise soon. If its declines continue, it could signal increasing investment needs and capital intensity.
WD-40’s free cash flow clocked in at $29.33 million in Q2, equivalent to a 15% margin. The company’s cash profitability regressed as it was 6.6 percentage points lower than in the same quarter last year, but it’s still above its two-year average. We wouldn’t put too much weight on this quarter’s decline because investment needs can be seasonal, causing short-term swings. Long-term trends carry greater meaning.
Key Takeaways from WD-40’s Q2 Results
It was good to see WD-40 beat analysts’ revenue and EPS expectations this quarter. We were also excited that guidance was raised. Zooming out, we think this was a solid print. The stock traded up 13.8% to $272.00 immediately following the results.
WD-40 had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
