WDFC - Earnings call transcript Q1 2021

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Operator

Ladies and gentlemen, thank you for standing by. Good day, and welcome to the WD-40 Company First Quarter Fiscal Year 2021 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. now for turn today's would to presentation I host your call, Instructions] like the to over [Operator Ms. Wendy and Kelley, Corporate Relations Communications. Director of Investor Please proceed.

Wendy Kelley

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

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

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

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

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

Garry Ridge

a truly Steve, respective and are Good dialing It staying hope safe Wendy. you we families has from healthy. thanks conference world the are, our in and year today's homes. Wendy for and once challenging I you, and call. for been joining that day for your us Jay, again, and Thank

to continues associated many challenges the pandemic. tribe Our the ongoing work COVID-XX through with

share However, good with a during high to times. associated and that much some cleaning have happy these today primarily you. I'm in been pandemic what This or call products We maintenance linked of extremely came trends demand and to products news isolation demand variety increased was our from renovation. unusual with a renovation market we maintenance needed

up quarter the result to you very continue needed at sales that tribe-mates fiscal meet to in to the year good the battles. our estimate call orders want with to reported over demands. of And call clear tribe's we can aspirations. is I with due and third-party us going get then must-win provide products the functioning, had an trend, XXXX, few investors to over very share the to that customer this business walk share I to short a though and future these impact to As our do This the products you manufacturers hard with the I'm quick delivering but and working first of present, will tremendous Today, grateful $XXX.X quarter fulfilled, of we for a through how easy, XX% they production Steve of net results Thank due some to users the Steve additional result share one overview for thoughts difficult dedication consumer on increased much can customers hard that to to a each and news, of are you on happy ensure update work for today, it's know our clear year. I the our lines hasn't for compared be been it caution I'm and going a first of I'm uncertainty of our moments. to mid-term. am million might you continues you. need. end to very to what the strategic our pandemic strategy sales the initiatives to to growth We've turn pandemic last always

global timing and not is aspirations tribe, more the confidence achieve our are following are is $XXX Multi-Use that approximately sales do laser-focused our to required uncertain while the Our XX/XX/XX to has of to pandemic growth strategy Because battles aspirations will business ahead, our so how the we the grow growth The WD-XX is pandemic growth or unclear; on us there. and our initiative what clear our must-win in still do going Product. economic aspirations, conditions is us Strategic drive get one has to to number goals. of become net altered our is million our model. but consolidated to

growth making grow product improvements. making the fiscal in money they top. home blue is number time little leveraging we approximately quarter the iconic increased find demand is time can this isolated most up make was WD-XX spend Product Specialist first under to the first renovation with to tradesmen. improvements line. primarily to Multi-Use earlier. people both our were often. year are Strategic two WD-XX completed In million, sales million. referred ever, they goal more project and XX% asset, brand compared will time these themselves homes, people, is and a last to to the initiative of more uses more places to aspire blue We their available Product to $XXX year. to WD-XX top linked driven The and in with the by more can Multi-Use grow the red for and fully hiring WD-XX suggests and more a architecture little $XX.X yellow Specialist in XXXX, Our I more yellow the that Due red This Research by initiative isolated spend to

We revenue. believe quarter first are the up WD-XX about $XXX sales long-term Specialist opportunities the of line for WD-XX believe the million, product million to approximately we In Shot, Specialist in three Strategic to revenue broaden were in with vac. Strategic XX% $XX can million. products initiative year. were $XX.X approximately and Global and are number products optimistic product XX% of reach grow these number demand e-commerce the driven compared the last pandemic. was strong Lava million sales a year. last combined in the strong no initiative BIKE, trading for initiative as linked track blocks increased sales GTXX, quarter, three-in-one quarter by of first to renovation three as up three, included compared well to and This this XXXX, growth Solvol, to associated $XX.X revenue driven We WD-XX the of on base. we includes all by in trends sales first Spot

as BIKE fixing, develop, were of pandemic. cleaning to people four; quarter, first compared sales initiative are the also to cleaning a year more demand particularly quarter, strong increased of attract, bicycles compared in in up the buying, Global pandemic. XXX% $XX.X Strategic result number outstanding the products continue members. our Our from of to WD-XX homecare result often of last and a year. last up and retain tribe riding XX% the as nearly first as sales benefit and homecare Global products were million

it never tribe to but this Our a many thrive Strategic is tribe and retain to been true world, up so have during engagement that been for brought grow excellence. new than operation WD-XX has has been to member members this ways. weathered challenges, us never our XX%. unexpected but mantra we talented even collaborated been attract, develop, Company, it a greater unprecedented some company, We've them one unexpected I proud together, tribe. number The together. and initiative tribe pandemic. in perhaps has goal initiative that of One has under learned crisis way have global five; one we've long

under serves our times has more due must-win is commitment this pandemic. has here in a impacts commitments as and operational challenges summarized I of deliver perspective, the an despite battles. our From shareholders' hurdles financial perspective, of for operational best been it the have of will our by discuss to is and navigated with initiative stewards our been or these. the pass an well that one core results, at never financial goal today. we tribe make overcome share an always call the like better to considerable the believe to the now our capital will values resources to From enormous Steve us pandemic. must and conservative of good review asset execute Company; sales and associated they been us equipped our our than it in I WD-XX focused overview excellence better who Our we've

Steve Brass

an opportunity. of months afternoon. were to spoke created September recovery uncertainty seeing total throughout good what and that It our been you many early with pandemic to trends over XX% Today, and last amount at disruptions over I these to has despite share in the happy last and you Garry I Thanks reporting we the our meets of The that by unprecedented what impact our preparation sales on to markets look direct in were with we am those by quarter our see when for pandemic, we today our the were we October the first around of the of continued the shared some and duration beginning growth in happens XX global encouraged markets. operations distributor business caused we're business. quarter. When has said

impact While continues creating are we memories that our globe, ever remain pandemic to more the we many around that than saddened lives lasting positive so before. products pleased the are

caused reflecting and quarter products user phenomenon. the for to first end behavior isolation in due a results by our Our increased change renovation demand

reflect to global as pivot experienced quickly relates growth we changing also first particularly it of the they e-commerce and in the channel ride However, the waves, over tribe's sales XX% quarter. while our to ability

due and increase to WD-XX renovation pandemic. in isolation sales in a the The sales growth a States, the what's look closer in Net $XX.X America, which due Americas. blocks products includes growth. the with and Canada, and saw States the XX% to the experienced sales e-commerce US, maintenance channel our and In Latin phenomenon during of were and throughout which Canada first region. we quarter a increase with of in experienced and and the for United the America increased Specialist Latin a sales increased product associated bicycles up to line. double-digit the WD-XX increased take million. the of sales America, XX% Cycling let's maintenance in XX% Product Americas, all Americas Multi-Use United XX% happening BIKE trade the Sales sales pandemic our triple-digit starting has boom the ridership amid WD-XX the in also of at Latin Now, increased in experienced the Americas

In increased of sales saw America addition, during Mexico. in due in our to strong first the Latin XX% quarter a to first in Latin this America direct sales quarter maintenance sales contributed we newest compared increase in last year to year. market, the product This in

we successful of bit we a be While this continued our a develop volatility along continue new as base build direct expect we anticipate direct to there may customer exciting way market. in of Mexico, the

of as reminder, exclude product cleaning sales and our the increased due our of in the largely United our demand and cleaning our homecare in in a XX%. year, the products to increase sales maintenance States As and prior quarter which a higher We and compared Sales Flushes increased XX% XXXX the the to of of first to homecare homecare cleaning significant Americas a products. experienced Canada in of increased pandemic. due products result many sales

of contributions business we business brands strategic total, time. smaller that harvest become are as expected our cash and of to to consider and a over as our generally to global continue In and up quarter. segment homecare in made first XX% flows cleaning those However, for the listed except meaningful the brands Americas continue generate part products our

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

sales channel and from and sales Net increased first WD-XX Changes India, up increased currency in segment $XX.X to quarter markets, of EMEA compared the due currency our EMEA. markets, in the sales of EMEA foreign the last by were EMEA direct EMEA, would the and by Product for due million. which our Africa, East, to respectively. which to exchange on XX% EMEA in in increase On our XX% renovation both Middle in basis, XX% in maintenance a XX% and experienced pandemic. products a increased increased sales constant and Multi-Use to increase Sales to phenomenon have distributor increased we on XX% in and Specialist XX% during through direct sales of the a In period-to-period. EMEA Now, rates XX% the impact favorable a includes Europe, year. had sales WD-XX isolation e-commerce sales

XXX% line. primarily conditions XX%, a our movement in markets WD-XX saw region recoveries. and sales increase in also markets net Our for experiencing were as quarter, sales XX% our EMEA sales, increase direct we're the distributor which related and increase the result to and XX% strong Eastern COVID-XX saw where in WD-XX improved Specialist of respectively, product areas restrictions. in of experienced Northern, WD-XX BIKE Product a XXX% first Europe, in In we XX%, a XX% up of EMEA sales. Product direct Multi-Use In a reductions Multi-Use our particularly WD-XX of economic due We India, accounted EMEA in sales markets strong

markets. XX% in the opportunity a products of phenomenon the some and EMEA quarter, distributor first note global of our distributor XX% led that business net increased total up this sales of isolation EMEA the to demand EMEA markets to us made consumption demonstrates third our for global our total, region's growth and Americas the the This in sales. XX% of both in available in In It's future about of in our quarter. represented our addition accounted segment business significant our EMEA EMEA. In In to quarter. sales interesting renovation

we between within XX% X% segment long-term, anticipate the Over will sales annually. to grow this

of year. to in segment million. on Changes impact in On in double-digit had markets the net increased and experienced up in to products our the COVID-XX on to increased Asia-Pacific. first distributor our Australia by demand Product region, and for quarter, quarter of a Asia compared homecare products and foreign XX% In of Furthermore, the and sales and sales XX% last sales a Net million up would favorable XX% year, other by cleaning also sales up increased XX% first driven last up China, and Asia result the constant all increased $X.X Australia, products. Sales year, were currency China includes which due Asia-Pacific Multi-Use in as isolation Sales period-to-period. currency have up $X.X sales of million sales basis, China, XX% rates first both compared and XX% cleaning $XX.X the to of increased Asia-Pacific, XX% exchange to last in countries quarter, were timing sales Now WD-XX the maintenance Specialist in a and phenomenon. the by were respectively maintenance sales Asia-Pacific Australia, XX% primarily net the the and orders due by in e-commerce through to compared in pandemic. were sales WD-XX renovation which from our customer driven channel. growth. to homecare were

comparable with opportunities in occurring impacted event during lower China fiscal conditions China, China. Day about XXth of in long-term first were by XXXX sales which in addition, We remain no and the in anniversary sales optimistic National market year. slowed In the quarter negatively year resulted the this

region, volatility last shift inventory the measures lockdown in first and were way of These of the the in XXXX. the normalizing of activities. COVID-XX, region. have of However, fiscal conditions distributors impacted impacts primarily to economic Asian economic the of our XX% customer measures many in marketing resulted compared markets industrial first during patterns, we building the reduced economic reduced levels. the attributable in programs, which COVID-XX up lockdown their positively timing the along in year and distributor orders to of to considerably in markets, quarter quarter, sales promotional Asia year, In due timing our net the health-related million $X.X the was distribution, varying expect

restrictions the concerns restrictions. lifted our in region business lessened Although our movement XX% and many the continue Asian up the movement the in associated with pandemic health some first quarter. resulting countries In the were countries, segment global made Asia-Pacific larger total, of in observe to

segment sales will anticipate we XX% between long-term, to this XX% the Over within annually. grow

battles. dig let's must-win our Now, into

mentioned tactics to are As earlier, battles we deliver revenue specific must-win steps anticipated our targets. the our are against or undertaking Garry

one Must-win geographic expansion. battles. number have is global We must-win battle four

growth global yellow red the Product opportunity a Our is geographic can with top. to expansion estimate of $X the battle be billion. opportunity for growth approximately little first largest and in Multi-Use WD-XX potential blue must-win We the

our around laser-focused long-term largest markets growth in is on We to are the operation why delivering direct growth China XX there top a remains we our XXXX. in opportunity, elected which world. growth open

in step-up we substantial ago and digital Three the also with country represents opportunity growth our market is China initiated for addition strategy is In partnership significant e-commerce a program our years a us. world's area largest opportunity. long-term our India of for transitioned years. the In has a in in Latin a a from this delivered we're impressive strong Mexico very set and in results. operation direct over May America, to already XXXX Mexico market and coming of growth MD we distributor the India

Multi-Use Our of second premiumization must-win battle is Product. WD-XX

Smart has delivery Our margin creates world. by well Premiumization across end opportunities been Straw the our as for growth most loved for innovation users is and successful expansion. system revenue gross as

As Generation, Smart increase Smart our out XX%. which will grow and Straw reduce Straw to roll to objective than Next we is to greater continue penetration capacity costs,

grow to WD-XX for third year XXXX. our earlier Specialist brand in Garry battle debuted refresh Specialist. fiscal must-win Our architecture WD-XX is we mentioned

awareness store accelerate in packaging online. relevant iconic more use it. our refresh to and improve in leveraging with maintenance of a range professional the We WD-XX unique our first of more people believe Now places will yellow Multi-Use alike XX for little brand more most and provide WD-XX is even DIYs over to and time and who the the aims formulas Specialist WD-XX top. complement this ever will Product. findability red blue This iconic products Specialist fully more asset, makes to can

digital two years Our ambition our digital a final battle commerce. global and set We ago. is must-win half

interaction Our strong by well-positioned user never in would on ambition purchase focus was year digital engage e-commerce over and to been an a people category believe in with In global digital the has With global future. deliver from become journeys, that years is share crisis half at the commerce digital thoughts Since platform. to our future scale heightened category role so and transform to our benefit -- e-commerce and want end growth. XXXX the of shop, shift leader significant e-commerce health the within you global the the a and to increasingly way playing online behaviors We important. important as digital the about I growth our closing, to a we we're retail few is see XXXX ahead. accelerator with of in set

Over that the and the become who our pandemic solutions. our uses are long-term many permanent during products with the maintenance homecare end of interacted of users we optimistic new have will

However, to for to to impact in the lockdowns much clearly. mid-term how the it's difficult case uncertainty COVID-XX experience our to continues the might pandemic short-term. closures our the present, short-term which negatively temporary to is increased business. to and could counts estimate continue more very regions to continue Many pandemic Due see resulting difficult us in impact the sales

there the it results. global the our spending in economic wake a or pandemic, of In adversely could addition, in shift impact if patterns is a downturn financial

is result with of demand as a supply up We're a COVID challenge. keeping chain and Finally, the transportation pandemic. capacity have a risen monitoring which constraints in actively environment

market be suggest $XXX to to not year, and full customers. optimistic sales $XXX issues, between there a allowing impacting these year remain about us but constraints and some the likely through service of conditions net we managing range cautiously packaged market levels meet in for fiscal of of consumer these XXXX that companies total million our uncertainties risks, to million. our normal with current that believe all goods Despite are are fiscal are We are

provide will financial will Now, over the on I to turn you update the call Jay who a business.

Jay Rembolt

Steve. Thanks

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

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

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

basis at margin include on XX.X% Petroleum-based XX first In First, our the quarter, we'll gross of last chemicals impacted in our which major with the basis an February came margin XX.X% and cans. that look points basis our to remaining points gross was specialty the aerosol gross positive costs, XXX margin. points. by improvement oil sold year. oil associated points year-over-year. year, the positively input impact and represents for XXX significantly which petroleum-based has basis had This reached compared remained first year-over-year Changes average and flowed prior gross quarter XXX multi-year a the of chemicals specialty lows goods lower lower margin margin. of cost XXXX, through from benefiting crude Therefore, cost since our in time. Beginning crude than of costs aerosol the late the XX in lower was our in consistently gross cans

to volumes, addition, higher a anticipated and way offset high especially first and Also labor negatively gross margin segment. EMEA higher and on Americas warehousing by impacting price In to unfavorable partially by the in in impacted to freight primarily basis purchase of were the in the related demand, positive the quarter. distribution were impacted cans which our the XXX due gross we impacts were warehousing increases, networks basis negative gross gross impacts than our in primarily margin points in and inbound by of margin shortages expense impacts These positive pandemic. favorability EMEA, points. margin Asia-Pacific due increased sales achieved The EMEA both XX in which freight due costs aerosol to cost to

XX% or deliberate that gross input costs, above commodity-based and changes and over the market of changes, negatively or mix to currency impacted we continue business exchange focused basis so by target in can currency costs, rates managing rates exchange of other like we combined dynamics the cannot be XX at our margin foreign miscellaneous gross margin long-term. Finally, we our our control Though when in maintain foreign sales unfavorable points. rest

to our first cost business last the approximately sales address XX doing compared our business. of Now, doing was In I'll or XX% net of cost of quarter, year. the XX%

Although year-over-year compared quarter. percentage first our as due the business a SG&A significant the the expense in $X.X quarter first to the due revenue of last in The in first by sales quarter primarily increase employee-related cost of to expense increased the to SG&A million costs. higher year, doing in decreased increase was

For the make advertising, areas, the first cost from quarter investments business costs, our our promotion. marketing, of doing people of make XX% in we came three we tribe, the in investments and

percentage investment a was X.X% of our sales, quarter. the in As A&P first

percentage of As investment A&P to in revenue. in the first significant the a declined sales, quarter due increase

finally, in first achieving the of will of However, XX.X% taxes our the business EBITDA most impactful from of factor the freight XX.X% is relatively That And growth compared business demonstrates EBITDA line. then net shared this XX/XX/XX prior and fall that discussion flat many the XX% clearly that the just to was in of the last how EBITDA, the compared revenue quarter items products for the in to provision and important turn to to income year. is we our model the dollars us quarter, below now with our times for will other revenue sales was XX/XX/XX quarter our The model. measures being leads within last to EBITDA complete that last you our the of get to customers. XX% year. year. measures. our up this first was A&P costs And investment the XX% I've the goal

margin, to we strong quarter rate compared improved gross XXXX. the and expect net common of $X.XX were $X.XX We effective be an full XXXX, $XX.X effective tax will per our last the approximately fiscal income share that rate Due for million XX% XX.X% XX% first for earnings which fiscal same in million the for to tax compared Diluted first period growth for to compares year. year quarter year to last the revenue was reported the to the $XX.X the year.

we our we stock sheet. about to our word and strengthen share balance to previously monitor The which we a steps In capital to order buyback see and pandemic, the company's level our new pandemic plan, further uncertainty the impacts Now, regarding not strong. were while plan pandemic. we took sheet elected financial strategy. a the cash August until balance to see liquidity allocation began, approval reduced We XXXX. numerous to When approved remained preserve do of the buyback of for repurchases start making of under at Board stock our expired we the suspend the end a expect condition

a were XXXX. quarter made year the the of first fiscal As repurchases no result, during

managing continue to these will We and cash in remain during vigilant times. our liquidity unprecedented

share However, we continue of Board per January on to of Directors XXth. XXth dividends. of dividend our On shareholders payable December business regular record regular cash Xth, return capital close $X.XX to shareholders a to through approved January quarterly of on the

system. equipment Smart next the procurement that the providing to balance projects, complete will we to to XXXX, invest growth, returns strategy of used million In are majority capital comprehensive $XX using manufacture investing allocation delivery in capital our our Straw while year which approach in proprietary strong the long-term and shareholders. be to of generation will includes Our machinery fiscal a approximately we

We have to very of company. historically it required us forecast financial makes pandemic we'll for of the our continues to to a had low levels CapEx short-term which for which difficult uncertainty measure roughly of accurately inject in results sales. business levels. The very these has believe an see fiscal beginning asset business, model into return between begin that capital light We X% X% to investment, XXXX, and

That at we our issuing a overview. be As result year comprehensive not complete discussion will this of will financial XXXX the time. guidance fiscal for financial

it Garry. to will back turn Now, I

Garry Ridge

hear call? of WD-XX you did what Multi-Use were XX% the summary, in In first Jay. you, You Thank heard sales us this quarter. that Product up from on

quarter. WD-XX You up of XX% the first sales heard that were in Specialist

BIKE quarter world. of due to first in were demand strong sales that XXX% around the the heard You WD-XX nearly up

heard You XX% demand the the that products homecare cleaning strong driven in and due sales quarter of first cleaning to by were pandemic. products for up

with quarter e-commerce by global that sales the trading heard grew first strong all over three sales You in growth blocks. across XX%

we continue return regular through heard investors You capital to that dividends. to

and to impact to You it for continue difficult risks to present, might that continues due heard us business the pandemic to very how the uncertainties estimate pandemic our the short the to mid-term. is over

realistic not XXXX to It while our that net In remain going fiscal believe growth share million year but revenue heard today, us from be victories, current of is still infinite you friend confident closing full to these conditions $XXX uncertainties, that issuing in and work remain on to a we optimistic the suggest we You your them that total that game million. range Thank much market sales likely you questions. today. And is are about We are future joining our we fiscal celebrate remain to opportunity. take a pleased heard our despite year the is aspirations $XXX for quote done. lean and you comprehensive there would still for like cannot be to a cautiously important I'd Sinek. to Simon we for be my with guidance,

Operator

from your And the from D.A. Davidson. [Operator Linda Weiser comes line first of Instructions] question Bolton

Linda Bolton Weiser

Year. Happy New Congratulations Hello. quarter. on a great

Garry Ridge

Linda. you, Thank

Linda Bolton Weiser

your petroleum-based from curious uncertain input revenue And thank guess about? the a what are the this profile a oil for guidance first chain costs it it I earnings the supply What constraints? holds is because year. more that fiscal is back there or giving recent earnings giving in been element little I'm guidance. of in has of you're all, for rise you you Is movements of the just for So, it

Garry Ridge

for because may as revenue. most will We -- the that rely changes of is it range a the we truly within due year. be come to That's we with in around don't gross believe -- things or our the pandemic on. certain our the But margin range, aligned are the uncertainty that of in can't costs distribution the implied -- also extra historic

So, down our idea that. think we understand issuing this at sure time of EPS comfortable on got we a we've not here. the comprehensive a revenue, to I'm guidance and We're own are EPS you good but -- not

Linda Bolton Weiser

spending you're wondering you on that? but little also spending brands the would Okay. you're bit? of spend back revenue comment that growth made chasing you're that and your your Is spending? I you chasing that bit need much you Could cases little high demand I'm behind don't to Also pull maybe to A&P about kind noted an the ratio brand can kind demand as on want some you talk lower, in given of mean, a much? actually where environment a because how

Steve Brass

we to not our know, use that that are programs, We've impact, we've some for highly brands. our of physical area to which as awareness lot been opportunity all. box our we've been example, invest areas further sampling, you And reduce activities. forced is at one this are marketing No, back in not continuing that have But require got in continued strengthen to opportunities. people-intensive. sampling on markets a marketing of pulled The to tool our

we won't no no, activities. have back be brand pulling -- So, fundamental intention we of on marketing building our

Linda Bolton Weiser

strong these thoughts now And you're year when comparisons also a a -- of now? is on this your from to able revenue can you are grow being give pandemic, from thoughts a your the your what comparisons against know now, year facing strong to time on I us such long from due but some

Garry Ridge

is Well, aspiration many a that hasn't as -- our for changed. us and path around in years, world. there has long-term We many long still believe growth shared Steve countries over we the shared and I've

of be users actually that brand our his believe in see that into very, and number. new a that stick we'll very have mentioned would high Steve the As we we've come comments, historically, how identified many will

a I e-commerce in I you very wish areas game like game in to I Linda is particularly and specialist, very, -- business answer, We're exciting. give the So, infinite other ball playing wish over. the specialist, our too but could that I crystal isn't you give had

delivery are new in with uses these specialist, bringing products in new new all we're systems. So,

end So, we lot race depends our user hope as on believe set -- again. and we've will strengthened a free continue that we're position pandemic, some during base that soon us hopeful position see. we're A momentum, But globally. how actually we'll strengthened with our brand the that we've we our human but help

Linda Bolton Weiser

Okay. for Thank you. That's it me.

Garry Ridge

and best. well. All the Linda. safe Thanks Stay

Linda Bolton Weiser

you. Thank

Operator

And Jefferies. Rizzo the Daniel from your of line next comes question from

Daniel Rizzo

everyone. afternoon everyone Good is How doing?

Garry Ridge

to Perfect Daniel. hear Good you.

Daniel Rizzo

to to good Good hear, talk.

was and much was I was think I realize I much, Europe there than anticipated wondering a mentioned, of just trends from lot just looking anybody you was remodeling while I that the that stronger So, was margins in better led growth. think as something much well? was also particular I a have wondering And that driving seem was I and strong than particular to the they that historically region that what been

Garry Ridge

I'll ask European the side. Steve comment revenue to business. on close He is very the to

Steve Brass

There distributors. Yes, trends really mean of in some we've Garry rebound -- the are really these mean for was marketing it kind terms seen. that Thank Dan. it's I of global you, and I Europe. hi really

during That's marketing pandemic. Smart rebounding limited And thing. growing Specialist nicely. of kind WD-XX battles rest from Europe, -- been the the across strategy very on really just same the it's our Straw must-win activity growth to driver, lockdowns Europe, Our our distributors premiumization of it's first translated the very, and great strongly

some well rebounded Some well. the has of very, XXXX Europe we strongly. world, BIKE our in across but very, the Russia had challenge as and very growth markets WD-XX rebounding of strong have very across markets strongly; India, very done

of driven global drivers our of really a terms from and kind in same those that So, the battles EMEA must-win have our team. execution great results

Daniel Rizzo

margins? the And

Steve Brass

You calling margin -- gross on just or

Daniel Rizzo

was I actually I were which XX%. upwards at margins the think EBIT of looking

Steve Brass

got model of a drive-to-revenue. really as mentioned, build leverage that often start the business for get the Jay we've benefit revenue, We've revenue. the we that, said built as the And that It's we future. to we've of

-- something see. for at was that's and goal XX/XX/XX are does actually future model you So, experiencing very which the was our quarter -- is very pleased to that something if the that in that think built that that we was realistic model future XX/XX/XX, that a we've were we the prove we of that something about

Daniel Rizzo

from there that the oil the know year. costs or well, I in were flow petroleum earlier prices the then kind was -- And pricing in -- some lower through lower, lower of Okay. tailwind the that lower costs but were

if quarters. Now, of next I wondering you're probably peaked three -- of the two ease that to over that's feeling kind should kind and was

Garry Ridge

that. to speak can Jay

Jay Rembolt

has Yes, oil it crept more where today. will seen little a beyond a bit, is as to bit XXX we've days, we -- see little up to recently, margin from little a headwind we've higher XX or high or seen

Daniel Rizzo

Year sales helpful. right. has a seasonal on ever timing, of past I or Okay. just has terms in historically finally, slowdown New quarter, on mean historically in then All the effect least And Asia? it I an we does guess had -- the at effect had here first That's an the in Chinese expect in should --

Garry Ridge

it it time. year, obviously beginning depends falls. it of the the Well, right when in COVID fell Last

-- at part upswing get But would know during to as different we year. Year. fall -- Chinese of And we it year an after So, we that Year years. times see different that first you always New does be no that believe New the the during previous Chinese

Daniel Rizzo

saw -- And think Okay. to doing that I that's cost reduce doing and previously I there mentioned I the finally, or in quarter. deck the you was better executing wondering then the you're just down costs. that's of business something in if those again if is differently went

Jay Rembolt

It's revenue.

Daniel Rizzo

it revenue? Is

Jay Rembolt

went our a the a business of up, of went dollars, down higher revenue, it percentage cost as and because percentage a as revenue. -- real In cost percentage of but business As went down. was of it

Daniel Rizzo

you Thank very much.

Garry Ridge

Daniel. Thanks Okay.

Operator

please our for conference We on conclude that time questions. call participation allotted ask just you your does for your connect you thank Ladies and and today's that gentlemen, line.

WD-40 (WDFC) 7 Jan 212021 Q1 Earnings call transcript