WDFC - Earnings call transcript Q2 2019

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Operator

Ladies and gentlemen, thank you for standing by. Good day and welcome to the WD-40 Company Second Quarter Fiscal Year 2019 Earnings Conference Call. Today's call is being recorded. At this time, all participants are in a listen-only mode. At the end of the prepared remarks, we will conduct a question-and-answer session. Instructions]. [Operator like call, presentation Ms. now host to turn today's for to would over the your I Wendy Corporate Communications. Director Kelley, of Investor Relations and proceed. Please

Wendy Kelley

Thank Financial today thanks today. you. Garry Ridge; and and for President Officer, Rembolt. Good us and Vice joining Chief Chief to Executive On Jay WD-XX are everyone call and Company's Officer, President our afternoon

XX-Q descriptions ending presentation, on investors to encourage XX, transcript of non-GAAP measures reconciliations addition available location In earnings release, documents today's that on call, call. presentation. press today's are to period of in today's A at are On as filings our the website our earnings financial we will The and call call, our for we and These XXXX. Investor made Form certain well our February at information and available earnings after the replay discuss presented available as this review be investor.wdXXcompany.com. Relations these shortly will SEC also measures. non-GAAP

today's reminder, statements for company's call forward-looking a As expectations future about the performance. our includes

to achieved detailed and accomplished. results for assurance Of beliefs company's that expectations, be good are will discussion. there expressed materially. in in they our be The SEC actual could faith, refer no factors differ Please but course, the further projections risk can or filings

the now update events, turn call otherwise. a of future of please listening result obligation to or April a to date, call, information anyone disclaims that note as a company only Garry. any I'd today's new this webcast The to that, of duty all as for is any written forward-looking over Finally, replay or XX, transcript reviewing to whether information, presented or With XXXX. information, like current

Garry Ridge

today's million compared were last of the million which thanks period to for flat Good for X% $X.XX to conference increase was was last XXXX, $XXX.X reported the year, quarter to we second per day compared of for $XX.X the Wendy. net quarter quarter last the second $XX.X for for year. million, year-over-year. of Thanks, quarter year sales income of for call. Diluted second fiscal reflecting us $X.XX Net share compared joining earnings Today, and an year. second the same

investors a start that and We consolidated discussion net initiatives that on to guidance. end our of the XXXX, pride this guideposts, to while following We'd will with to that million by and initiatives XX/XX/XX our brands drive do are our let's our like aspire support remind programs in us the long-term about strategic and sales But them. successfully approximately help business diligently work year $XXX fiscal to not Now targets aspirations. model. reach to revenue these continues our XXXX

that a Product, are: brands. brands GTXX, Specialist, WD-XX reminder, Multi-Use we to BIKE, our no going X-IN-ONE, As WD-XX the are vac. is They Solvol, refer XXXX Spot there XXXX, Shot, us get and to WD-XX Lava

are XXXX strategic the core Multi-Use WD-XX number Our one initiative to engine Product. grow our for primary our brands Strategic growth company. is focus with

more more to with make goal Our will little in find the people, initiative and top more blue yellow places available this red often. can under to more is a uses who

last just sales Our in In revenue year. other nearly States, in second million innovation. and in is Multi-Use of Product the goal Product Sales was moment. largest I'll our down continued grow quarter by driven WD-XX market a the initiative geographic United detail in which greater every market, end X% the under was under of of compared grew events by the during entirely slowness expansion almost driven Multi-Use fiscal Multi-Use to discuss The Product approximately second by in this million, $XX.X to $XXX XXXX. quarter WD-XX to

the targeting initiative, of strategic increased globe. into markets, Multi-Use WD-XX availability new to around introduce part Product higher continue we this growth As and

the to number continued second two WD-XX $X.X now sales quarter, initiative of and $XXX line. to by to WD-XX growing grow the out year. second fiscal toward Reach the world. last WD-XX quarter is in the will expansion million, In to Straw dozen second all product of to X% the approximately for Flexible This Strategic continue this the up Specialist were new around end our quarter, revenue countries initiative it During over product in we the million Specialist the continues the two XXXX. company is we available roll EZ which into of move of line goal compared countries the

long-term for Specialist. opportunities We WD-XX are the about optimistic

favorable revenue sales last track products million of on the attract, were Sales due Carpet in XXXX volatility quarter, compared X% of were million for of be due Solvol outstanding revenue to UK a the is and tribe Nearly XXXX. initiative the are up also was this the to but various broaden develop it marketing way in out some come base. under to building impacts such other approximately XXXX new retain We includes this believe to with in members. three number product and distribution four to no and the and year. this the initiative the $XX with by Strategic However, in initiative three number WD-XX strong Fresh that associated building we there to Strategic initiative GTXX, sales product the $XX.X includes digital like some is as growth brand. products of to X-IN-ONE, windfalls in Americas, BIKE -- Strategic levels of timing attributable number reach maintenance line. Spot along UK, vac Shot, EMEA, these of may Lava and programs, around strategic promotional and a combined and in that and factors Asia-Pacific. the brands all

and engagement and of announced deep, of goal make Directors. brand to and member addition XX%. greater boardroom. Anne initiative retain needs it's Our to tribe Not do, marketing the functional of valuable to Saunders expertise need our to Board all cultivate her strategy reflects our because develop can Anne’s that and talent in the management than because tribe a this We’ve diversity And channels San Diego in attract, Board under the grow is have our addition to members recently addition to help, to in our business to our meet right Board shape Shanghai. but commercial thing just we guide to continued Board. to also from spanning our a commitment to

building and with that five, build share Strategic UK and excellence. Milton XXXX. plan Keynes the fall of located in to happy you I'm to tribe operational of new expect initiative the new month, to out office the the move our into start Additionally, number renovation this in we we in the

an than Our is one model goal Company, today. business core values this a our XX/XX/XX With mind, than of been some is with to we delivery excited here our Using best under initiative system Smart this that will you innovation WD-XX that in on it framework, measure operational against summarized really working it for is quite today. better better at Straw share I'm initiative. make as excellence by ourselves we've time it that our make

for delivery Smart our a XXXX, system story success original been in us. has Straw launched First

a a than Moving Straw geographies. we've across to new across all create the positive is Smart across it believe lasting better our will trade make today, product memory channels brands, into all value that we it and evolved

our photo to If X can presentation available in a you this website, see Investor innovation. on our earnings of Relations Page you turn

lockable actuator Our a a straw system Smart it you'll easy product. of has new has which toolbox also accidental But delivery spray, discharge, first it is never a a making so original design. ergonomic to the kind better Like attached and and more Straw, durable reduces design, its again. the our has straw, it permanently lose proof

system us and optimize manufacturing In generate which will global our now operational our our addition, enhanced has investment enhance this significant in efficiencies for value to shareholders. enabled delivery

the utility we've Finally, combination design globe and of we for that to this a patents innovation. around protect applied filed

this delivery to half expect our update initiative. globally, That of in XXXX. system out strategic the starting the on second We completes new roll

let's sales. our the of to starting second details move with quarter, on So

constant last in second consolidated Translation quarter dollars of were results US versus of As to I the currencies million mentioned million quarter, the earlier, their the $XXX.X our second subsidiary to functional $X.X net last the from sales in sales net impact year. foreign a compared year. had X% an basis, or unfavorable flat On quarter. up million on have $XXX.X second been sales quarter, second would in currency

our our what's locations, I business we when types segments, include specific out though being the Before detail and we as our that the happening in will launches. to discuss due I'd take or investors. not do timing to to to discuss part This a greater product run for here another to accustomed results one a is with customer be in that fluctuate business normal them something of like business of of impact sales happens of of new event the investors programs part remind one, It's activities, we ordinary promotional to activities. at level common factors much the individual moment it’s orders our the that normal a seasonal these period consider are fluctuations manage to of of customer and

United sales So year. which net second year. Americas, include in up quarter, in $XX.X Americas to last in America Americas. and the compared last were the down start States, Year-to-date now million with decreased X% the Canada, sales from Net the let's the X% to Latin

in $XXX,XXX maintenance Americas, of States product in Second due in products second of the the United sales the in to by decline X% X% a Multi-Use or sales entirely United due in X% the products quarter Product country. quarter maintenance to the WD-XX of lower States. Maintenance sales decreased decreased

either something happened Now about US of an to as in let's results. that's business ordinary this market our I disruptions event out describe talk often or impacting quarter the that a trend. the a little

into last longer was in made our taken Despite in year. put with can driven for one resolved back This unanticipated States: are the this deep United in goals may driven space has June products we customer going a of resolution increase offsetting The directly occurs in. our rising half would The of and specifics organization. working that channel place amount believe sales solid we delayed was loss are customer. liked. the fact, are our US key excite sales, our we they than periodically delayed and a in limited brands. to you prices. times place I support Product the shelf at and of for we club will in the operations we result our always customers occurrence event that took rotated a have is decisions as a to WD-XX commodity long-term with Partially by disruptive. last decisions as to customer some that Rest be The key positioned we warehouse warehouse these driven don't a the number activity. a diligently fiscal declines is pricing fact of make by this to been declining increase year that must of of key business a promotional well this have decisions assured United has event Without promotions tribes limited the the offset Unfortunately, rotation the ensure events club normal in of proactive our in share sales decline continue XX% Americas. promotions in at of This second like two the Specialist rotation US price States tied long-term quarter’s channels,

XX% programs due regions. orders, in and maintenance America addition, mostly the customer sales Canada, and of up in successful distribution X% product In both promotional up Latin to expanded were timing in

second a due the declined our due to The in to loss products Spot decreased the compared respectfully. XXXX and As prior temporary quarter, of distribution. homecare the largely Flushes maintenance XX% Americas our which homecare exclude of in and products. X%, to US, Sales our sales products and the cleaning Flushes of XXXX reminder, in year, was decline XX% sales and lower some in cleaning Shot

to continue In our become as consider and of to time. are meaningful total, homecare those of to flow cleaning and global contributions Americas brands of those brands XXXX our segment a as business over that business. smaller generally We XX% half our part continue cash generate listed our was expected products except

and X% Over we between annually. the this anticipate grow long-term, sales in will segment X%

and in net year. $XX.X increased last Now, EMEA quarter results second Year-to-date by second in year. includes in in India, growth up the EMEA million this net million currency Europe, a increased rate offset which We reported are $XXX,XXX EMEA compared this from last last in quarter, constant On quarter sales EMEA, up in would experiencing. compounded transaction in XX% a negatively foreign favorable Middle X% second annual year related to were sales East, impacted from currency in were basis, line related and which headwinds onto translation sales with have impacts slightly to quarter, exchange X% rates. Africa targeted experienced to segment. we for EMEA the the the the up EMEA’s $XX.X our

we direct of know, through sell you operations into As through as marketing distributors. as combination well EMEA a

second during Our US EMEA direct year. of were markets XX% flat markets this the quarter in sales accounted In the dollar, region for the year. sales to last compared of $XX.X million, direct

However, currency due direct WD-XX EMEA to of on our EZ sales did basis, Flexible growth Reach a Straw. constant most of increased see markets

markets the the result distributor primarily was to the increase of Net the sales accounted favorable in XXXX of direct due The of quarter made impacts $XX.X sales activity. to to In sales EMEA XX% addition, which XX% of WD-XX of marketing in Fresh of Flexible our associated WD-XX global due brand. Also of digital with distribution increased Reach to UK increase East increased Multi-Use our increased sales promotional higher region higher business. EZ the up in a markets. in some XX% market Middle distributor sales as segment the from million. This EMEA our the level the the the for sales was Carpet windfalls Straw contributing Product to during due

grow Over annually. the segment we XX% the expect X% within long-term, or sales to between

partner year. X% the rates in X% were would sales in in second sales year. sales and quarter, in decreased exchange year. increased region. X% on foreign $X.X any do a not in up impacted. because Now, the from compared have region. compared of unfavorable In we the region includes in in Changes second have from related quarter in fiscal in in in was to exchange onto have down a were markets, XXXX. Australia to region. currency planned This second This $XX.X this in million distributor the of customer WD-XX of to to new transition in impact place, sales new million the transition last disruptions on believe last the of were $XX.X was In Specialist basis, Changes is an decrease overall conjunction our to sales Asia-Pacific to rates the product sales had foreign planned down sales last to impact other WD-XX year year. extra which Specialist, the customers in sales down materially in Asia in to currency constant second expect A was primarily net the our we Asia-Pacific. WD-XX quarter, million had quarter, net due year. to due now volume the up further transition currency the manufacturing is of Australia, negative manufacturing currency Consolidated in net orders quarter, anticipation do region, basis, $X.X On last Asian X% quarter million a manufacturing a lower Asia-Pacific the countries sales in compared last not Australia the to Specialist On sales -- the in China with timing in partner second a of X% constant region. Though purchased meaningful and

our base expect increasing optimistic XX% in of timing although basis, to were US in region. were remain shifting dollars long-term our second quarter, China, our dollars opportunities currency up quarter XX% made second promotional programs activities. varying year not of markets to of of the volatility distribution. in of a last conducted year. building industrial We sell the the year to lot sales this million compared Asia Our compared in and In and distribution, we to increased in about US patents segment net up a the On in successful due that continued Asia business. by we sales of since XX% due programs, last China, are the along way impacted the currency Pacific The economic global distributor promotional the constant $X.X

sales grow the to segment annually. we XX% Over in the expect will long-term, XX%

hand of with section. So a going that's and who wrap to my Jay to the review up over continue the financials. of now I'm will

Jay Rembolt

Thank you, Garry.

with we long-term start our the Let's discussion model, to XX/XX/XX business business. targets our guide about a use

represents we excluding amortization. As depreciation you our which may is target XX% doing recall, sales. expenses the margin, to net of represents operating XX gross our XX be at total which cost of and The business,

doing our of our EBITDA. towards to is drive over represents And XX% XX goal of Our for the time. net finally, target cost business sales

XX our distribution our These exchange XX XXX mix XX margin freight the changes foreign with basis product segment. quarter. second petroleum-based regions. look points by input was all represents this increased in the impacted gross cans. aerosol impacted blocks margin Asia while XXX and by costs, Asia-Pac in margin effective gross favorable year. changes we'll in remaining basis which gross we've changes, of positive by to impacting were points increase points basis gross the our and from our basis And margin. XX.X% miscellaneous quarter primarily quarter, partially rates over XX which at positively our by basis an associated increases negatively from trade driven price -- XX costs offset favorable This impacts sales points and this XX was compared implemented other to impacted three chemicals, second In basis Approximately finally, higher margin margin year-over-year. months mix currency major specialty margin past came by lower changes last primarily a about costs gross had basis the Pacific costs First, in XX costs came XX the of the favorable positively positively impact points. in gross gross points, of or gross on our margin The XX in by warehousing, basis points points quarter. basis Also Americas Sales XX.X%

there's advertising, a raw to delay this cost in quarter flowed goods The in compared materials about cost reminder, due second last negatively XX of on basis were sold changes production prior or XXX costs which As gross customer, through negatively that our margin before gross year compared the of year. and Also life days trade impact of our impacting give in margin raw increased impacted pressure of we And put by goods the all and gross three to the were that margin our other higher this more quarter blocks. discounts to to points materials promotional to cycles. year quarter. average inventory XX

reminder, of any over prices dynamics target point. particular global not gross the in we cannot at deliver commodity rest long-term the margin We a maintain gross so will we As XX% that market be long-term. above our but managing margin continue business is at control and staying can or our of upon contingent price focused to XX%

cost Now is which business. I'll second the quarter, business In quarter of address of the the our XX% approximately similar second or cost to doing doing was our XX year. last

and the in from tribe; investments of we Investments For the areas: in of advertising promotion. we cost make our make came People business costs XX% three second our quarter, marketing, doing or

advertising investment the was products our As and customers. a cost then get to sales, to percentage our freight, the X.X% in of quarter; second And promotion finally, our

business we sales, to of of our continue doing have fifth necessary excellence. of objective our investments is will strategic of net make to that operational to in XX% our support of cost closer our initiative, While target

whereas a measures. second which discussion us of of last XX% exchange of gains fiscal were our brings year. our of XXXX, income $XXX,XXX item from in last worth sales was recorded quarter second of in the Now, compared of these the a completes XX/XX/XX prior large was the was the year experienced before we currency portion that we approximately currency of transacted quarter UK This XX% exchange provision repatriation EBITDA, XX/XX/XX constant the up this impacted of our net recorded this foreign The related foreign favorably to noting million, during non-operating losses. gains on significant second It’s gains quarter related last. year. the that at for A taxes. EBITDA to which $X.X in income In fiscal quarter, second business XX.X% to to year this model. taxes from is we the the subsidiary,

rate current XX%. the For statutory is our federal year,

However, income to our awards. due was the provision of benefits during tax the impacted excess settlements quarter from favorably equity tax

full $X.XX in million We XX%. period year shares the resulted increase million in to expect diluted common shares same year, reflecting million the that weighted approximately average quarter an last $XX.X $X.XX X%. second $XX.X shares million Net ago. will the decreased income the our effective compared of from earnings per prior tax to second rate Diluted for was for the be versus This year share for of year. XX a quarter outstanding XX.X for

capital Now allocation. a about word

Our a includes our growth, long-term returns allocation to comprehensive investing strong strategy providing shareholders. for capital while approach to balance

Board total, initiative, at close operational April return March of fiscal of capital in per and regular XXXX, year With our million continue dividend on expect XX, excellence. a shareholders Directors of of repurchases. $XX shareholders We share respect of support record XXth payable to in strategic fifth XXth. we capital share invest April the to our $X.XX cash to about to to expenditures, quarterly through dividends approved business On this

fiscal stock under our end cost $X.X million by our a second in we our remaining during is million share the maintenance $XXX.XX, will machinery XX,XXX Straw $XX.X to Board At addition which our new repurchase million In plan. earlier. of and renovation facilities which just our and of Garry the making dividend XXXX. in the approved current investments to $XX Milton total innovative the plan, equipment closing some delivery new highlighted complete under also yield the in today's continue the price over of was CapEx, quarter, X.X%. to June And annualized Smart invest regular we’ll Based we we at manufacture of second needed of repurchased quarter, our shares on Keynes system, had

rates, with make that, turn exchange business. continuing fiscal challenging Uncertainty it our to particularly are and sterling foreign commodity with year around to pound So, the prices guidance. forecast let's to

Advertising, today guidance diluted be completes and acquisitions with year. And divestitures. $X.XX, expected between However, $XX.X be lower XX% of of does full could XX.X X% any and of between levels our range. our outstanding. year the if the guidance projected million is of remain to earnings end to guidance $X.XX and million. close the million. believe And income And be to that, income is sales to overall expected to currency be near our between on XX%. promotion, projected is And guidance. investment between exchange future for for X.X% $XXX for sales the an The expected share Net for impacts between based X%, be weighted net and we reaffirming margin sales. that taxes come-in or be be year, include million our foreign rates we provision per projected growth sales between estimated $XX.X review. are net XX%. current That Net -- million the in be to the remainder not to with $XXX and that Gross note net shares financial average X% and to to is expected expect to

Now, back Garry. to

Garry Ridge

last yet year, X% us from sales constant were were did in up heard they that compared what summary, to on the global You today? flat call hear In currency. second quarter our you Jay. in as Thanks,

sales $X.X reduced currency global of million by the the heard You second exchange impacts rates our that in quarter. foreign

of positioned sales of the we the WD-XX Multi-Use in solid that despite experienced, But year. United second United fiscal the were for a half heard Product down the events we the States You believe is States.

WD-XX the Specialist in quarter. You heard sales second X% that global of the grew

that it two heard increase countries. Reach to we in dozen You of and Flexible WD-XX EZ now continue available distribution is over

make that system innovation is it we're on that Straw working will delivery heard our than Smart better an today. You

line our from added that we remains to Saunders year Anne end with like I'd reduced for that not Directors. not might our all heard and and you the on our joining guidance. to expect be that And In with heard in a us you closing conference pleased any the you to unchanged we've to to Board we You happen of share you Thank you decide guidance quote Maya can would today, to to questions. Angelou, be open but call call control events you them. the today, by our

Operator

[Operator Instructions].

your the from question with Linda Your proceed Please line of question. first Bolton Weiser. comes

Linda Bolton Weiser

can, the quite I just catch it that Or ask is In page -- seeing didn't can is because explain terms, straw you you is attached can I the the plain quite just English, I it? simply elements non-technical didn't So whereas the a about that innovation? wasn't? picture? before on I'm all is simple to it you said. not -- it on there picture Page the X,

Garry Ridge

Yes, Page sorry. Maybe it's presentation, on X of the sorry.

reduce developed down more a It's sprays Smart top easy design, permanently spray. It first actuator. a durable straw So It on attaches any Straw X of Smart the so two ergonomic. what it the to it has that making toolbox is lockable lose accidental of ways, the you spray. basically has straw, Straw it called again. new flip an it up was to Straw is improved a never will to Smart Linda, more you'll it's actuator and which -- There’s its Straw our X. proof better the Smart kind discharge. spray feature lockable It's stream and It's pattern. the

Linda Bolton Weiser

It sounds like a lot.

and channels would in centers? market it all talk how half first first like sort we of you it might gradual in be second have Like and about at the expect US going roll idea rollout what home when 'XX, fiscal about any for is to the what it out? is you So do

Garry Ridge

take the But out will XX out It's world. convert in it will the first. world. will in the across be the States. with sure two of first. a will certainly United not it And months us we yet Europe touch complete to would minor conversion. which US It rollout probably in swap years it not expect will and definitely channels it a to we from then completely start We're But there rolling

Linda Bolton Weiser

be the what now? what the you would over compared product And the And now how margins line? have to what look have will you price in premium

Garry Ridge

from we'll Being you when openly pricing away so far but about update and roll publicly haven't yet as out, to we we're get about closer. talked we

Linda Bolton Weiser

in just Okay, in it back until you another there, they like not sounds couple did ask the issue thinking talked in, general like with out for of one US, the right you just loss. this mentioned good. secondly, you of I about permanent you, sounds quarters Then can it to the until or the maybe they -- they product you, more yours that taking of And can put try way, your similar instead the a when you put being warehouse did comment anniversary in clubs loss Am a way? I type competitive there? to whole in when of category a get a

Garry Ridge

many warehouse Two floor working I'm the it we'll rotate for it's seasonal questions this have we something out promotional from probably win of and -- there, time. period rest was limited the a us. to in happened firstly, and we to it major play. impact later the the you was that year, space products. products time-to-time It put felt this really bought time a know be the year, that not product will in floor quarter a Linda It very have major is unusual go happens in last not to We reason quarter products not sure. clubs sure to was and of in. have and another which they the competitive This they believe don’t as again. This is did not before warehouse that there club with rotate in they I'm last, to be some first space the won‘t a regain same impact for done we'll at that buy last because time back isn’t as we so the

Linda Bolton Weiser

it multi-quarter program so ran saying you in like of just some kind a of are year, kind So, was last it wasn't quarter Is period. for one correct? actually a that that for

Garry Ridge

year promotion because last not we're didn't happen we And always year. not clubs year, have at this year. we this the everywhere in this the all club a all comparable in to get that time, We're

Linda Bolton Weiser

alright. Okay,

pretty -- long impact. reading it feel feel like the sounds correctly? it this like as was as I mean that was So, I quarter that confident Am you you

Garry Ridge

quarter is This -- impact, this past the majority yes. is quarter, the the of the yes,

the we well, a thing account, As are different promotion key which described that two with events. was as the which with other

Linda Bolton Weiser

the So, in price -- of terms how how other does to item, so the it does increase. explain relate it just again,

You’re quite a -- to I high not want price like saying you can explain? because keep don’t just that, you promotion just understand, the running

Garry Ridge

price when don’t respect get get into the with want too always with won’t and what is gladly -- us that generally you went don’t -- happened to but customers their customer of I open know, I detail rise we the as -- into well rise. much the welcome that in price year last arms

we help decided us companies and So to that they they to discomfort do with doing great should them that. would promoting more that rise, would our did one user end by a for particular been they what do would best as try their do, as call hoping us understand our but they it can the price good the customer, they anyhow. their unlikely for In of do be the that product for may around be do One price rise past enthusiastic if rise that in they price we a period have time. that that suggesting would punishment, they not

it was as the our weren’t calendar in not back on and the So, in much in in swing of normal of year. the delisted and we are of the promotion, this customer, issue anyway then resolved impacted second be although to the half product Since going they they particularly decided that their so full promotional is engage will we we store from level were and us back in being now. the quarter there

So little took it just a time.

Linda Bolton Weiser

thanks in some some Okay, US conditions increased like weather of had usage we’ve type that. regions. wet that for then, very in I’m the various just curious Would WD-XX And weather or consumption products? affect rainy

Garry Ridge

oxygen, of more things one rust. and is there is a more happens, moisture of couple When them

talking -- product comes of and yes, our opportunity be to us those users. we that always about engines So, amongst do in as used for volume that But it’s turn think we’re when but very there hard to that to a wet up would of we rejuvenate are we don't sort time, able the spike. periods measure uses end

different is different needle but doesn’t mover. -- weather huge -- yes, could as into weather have conditions not So play a think us I

Linda Bolton Weiser

Okay. from last one And I guess me. just one

down usual your on run there. good impacts gave You the margin, gross different

delay terms and maybe the that would with looking see the moderation of at at I’m being the factor in be cost In next up quarter, I input those start looking Am to in down I’m just correctly fiscal the oil seeing the down costs on trend year-over-year of cost? year-over-year, the and third cost the -- can may commodity we some actually up flattered or quarter. your instead being that

Garry Ridge

able benefit the be pick third in should quarter. some up We to

very ours. analysis Your similar is to

Operator

Your line of with question. Daniel from Jefferies. proceed next Please question the with comes Rizzo your

Daniel Rizzo

up last on question. that to Just follow

last impact recent since of in since problem into the think the towards XX% of prices negative but year So with a have a that XXXX? seen or have not beginning I year, call, surge end the quarter later, the it the oil we’ve the would necessarily was next wouldn’t that

Garry Ridge

have prices yes, we and latter will of the -- into or last those we’re experiencing some we year be half XXXX, now. the get early by the of That -- quarter that time seeing higher the should a in

Daniel Rizzo

they I others. if brands guys and and you there added notice been Were weren’t in it’s Product, about the was But you X-IN-ONE XXXX Shot some the some core recently or those the part then like past others. of And was it? always of you your I brands? talked very kind was and about mentioned it I saw more that and Lava -- and helpful. just wondering XXXX and you didn’t they Multi-Use that Spot always

Garry Ridge

up and WD-XX and US and are expected whole XXXX makes GTXX see bundle Solvol brands. get but six Flushes, are at portfolio nine UK the The in markets include in the firm BIKE and be are part XXXX. ago, the that around in X-IN-ONE months and Lava which that X-XX other we we did some now in world, the we -- and that are ones XXXX that Fresh and our would Spot About confident Shot around XXXX or Carpet what brands in in were

Daniel Rizzo

you. Thank one question. And Okay. then more

reason you have So we there corporate a just I’ve is it is trending color, costs been I can forward? noticed your for extrapolate just a kind something going that Could mean, it provide that? lower. of -- lot Is is timing? it Or

Jay Rembolt

Well, have business of driving the I XX. effort think overall do our cost down a very on concerted towards we

as some there's year. noticing timing look one, cost I our might in our goal quarters think between But what just and be variability think, the I is to So certainly, we years. business. But some throughout continue forward, down between variability drive to of you're of

Operator

from comes with proceed the Rosemarie question. line Morbelli Please question your Research. next G. Your with of

Rosemarie Morbelli

I if back customer’s more good as lower a was not could give wanted us you originally how much they little wondering have you into got the on except as graces. price Did that your to you you to?

Garry Ridge

-- to going on no, rise. not rescind I'm price we didn't our

do very think their we table, are goals showing supplier us of long-term innovation supports supportive are reliable on how to margin their to the gross inventory. and full show able very that we bring return that them was we a it being time I on the that customer significant

you just do -- I what takes your? So think -- time. Jay, what's and it

Jay Rembolt

recognized we lot No, our given do time. has do ongoing customers’ of to a And it I right, that just lot it's any a think, customer. that you're occasionally, partnership. with But at Garry understanding work not necessarily

are when we to from And dialogue those able them. our so were of we’ve that have that. think share gained share value with some kind we the able of are that insights we to I with the customers, that opportunities And

Garry Ridge

research. than innovation. It's end we and about Some one about there. And need and insights competitors, the on to to about continue It's think behaviors and we our thing price. like sales the we're here, with into our what conversations. EZ have It's about And penny about category Smart have only users, about of is those it’s of bigger driving they to Straw innovation, Reach, profitability, penny play price. it's much is not

Rosemarie Morbelli

Okay.

so that way would they can you So that they say to was the a we did? surprise this act

Garry Ridge

No.

Rosemarie Morbelli

No.

Garry Ridge

their to decisions would prefer that raise just don't don't I that. why good they are I fact retailing make we expect base, sometimes prices, mean, finally don't organization, do and No, the years I is that's and job disruptive. retailer ago, investor job And often we're make many every we enough respect And from their are ones by good where would was and if -- I job and a came price their running respect I I do prices? our and every I they because and asked raise we buyer we started, the that retail that rises

Rosemarie Morbelli

same Okay. And that subject. then still on

in won’t a Given offset that the coming way, order gone while? are your is little oil up, have fact you instituting prices you additional to price for in even planning what see it increases though

Garry Ridge

No, when first rise. oil price were prices they nine months about are coming back implemented ago, we where the eight now to or

plan. no, we United in rise today price immediate don’t another -- not So, in have have our do we the States

the around time-to-time. are Although world, from we different taking pricing for reasons

Rosemarie Morbelli

it growth growth rate I at you EZ And us Reach specific a besides missed for particular then anything the Okay, looking Reach? in EMEA, EZ region? if thanks. And that gave in

Garry Ridge

well, the very currencies, is in a well, did markets transaction give seeing EZ rate particularly didn’t but of generated that product the activity through is well. We Reach promotional But UK of playing UK growing, was the market growth most we’re no the growing individually, because vac.

Italy. Iberia seen have or We growth in good in

We’re seeing good France. reasonable growth in

continues business in through to the business our the grow XXXX. continue a EMEA place overall, in to reasonable along to line put rate we at So with to markets, that initiatives [trek] the in have

Operator

call, participation please you questions. your today’s We disconnect allotted and and that that lines. you on conclude Ladies your gentlemen, thank conference ask does for for our time

WD-40 (WDFC) 9 Apr 192019 Q2 Earnings call transcript