WDFC - Earnings call transcript Q3 2021

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Operator

Good day. And welcome to the WD-40 Company Third 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 the 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

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

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

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

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

Garry Ridge

and day healthy. and us staying families hope call. conference We Good for that Wendy. and joining for today’s your thanks you are you, Thank safe

pandemic. COVID-XX with up reported sales third quarter, to experienced quarter third both tailwinds challenges strong net compared through maintenance In results unprecedented business. and of for by fiscal we opportunities quarter a pandemic of our for were Our XXXX, and quarter. sales and demand we The the In of to the million to pandemic. COVID-XX together work today, continues year for a XX% the the the fiscal last $XXX.X tribe year, associated created we new headwinds impacted the third and record our our of quarter has headwind all-time third year negatively disruptions related last and experienced products,

experienced our costs. measures, last myriad the chain year, and disruptions lockdown have a various of in higher we Over U.S. supply increasingly

have Due our However, users than offset the these introduced significant end tailwinds. the the challenges consumer renovation pandemic, trends very with time. brands been millions more spending of that in for the we to by and associated have have shift to first isolation been

high In and must have The addition, to enabled impacts our meet products. we our win of maintenance most COVID-XX adverse had business. increased focus on very our enabled experienced mitigate tribe’s many robust to demands tribal the culture have our us efforts has the of on us battles for

we result, sales during in to period last same compared a experienced a As third year. the XX% of quarter maintenance products the increase

our what to I constant currencies on in challenging you trends million, been the companies, In results sales to a impacts many foreign have quarter. would an began, some $XXX.X going were initiatives. will basis, addition, on am talk their blocks. times. update knew had we like about face compared business. of experienced that the other to trading sales minutes on you share each with third we have XX% third the were of to pandemic When We last going we impact subsidiary’s from currency year. in our quarter a translation of in strategic functional few up uncertain a first U.S. our our the favorable in Steve sales the the it quarter to dollar would On But

However, were that driving our on knew focused growth. be made ahead, as famous brand known a there never bring tactics but our must navigate strategy win choppy which in we a I and that that smooth we supporting would sea had always them. could a We [Audio We had we and to sailor. knew our Gap] also customers say sustainable we trust, times. us long-term that well-positioned uncertain had waters end with people also users to certainty both some a a battles, skilled

from tribe Our amount environment. this under has operating learned a tremendous

trust have the a consumer in we spending will to know half. the not been forever. that year as what or and isolation We We last patterns renovation into refer last

back from will patterns volumes likely sales change get things to As post-pandemic, most consumer normal to spending our the and more normal patterns. will growth return

consumer over very wrong time pandemic in maintenance sticky possibility us with the high means pandemic. This that as that, we before patterns benefit probably are targets the a think introduced created products. believe roughly end to and the long-term. first that Having went users have spending been new a experiencing XXXX However, that have permanent do We right the just history we buying the brand. of the during have continue that tells our said us is users we behaviors as associated will as we brand pandemic the for just our variance our all shift know and into been that to our

quarters. However, we comparable be periods will against next sizable up the in few

of experiencing into the Taking consideration, we’re bring factors of those reach fiscal targets model. into additional currently in range while million business $XXX million. currency do and We strive we turn to end the within we so following can XXXX future. our successfully revenue $XXX believe by adjusting the the our today year and these to between will XXXX point XX/XX/XX targets a likely will addition, headwinds some In we at tailwinds

initiatives. is to one number Strategic our Multi-Use to grow turn Now Product. I’d update WD-XX like to initiative an on strategic

Our more often. find in places third to goal is red and In initiative uses will the the more with under blue top little more yellow who to people make this can available more the compared is of quarter, to million XX% of Specialist year. number quarter two WD-XX grow last globally to increased the third Product Multi-Use to product WD-XX initiative sales Strategic $XXX.X line.

continued initiative grow Our XX% to is goal our revenue line broaden In under new iconic expansion, initiative most can yellow the WD-XX to $XX.X base. third product to year. three and leverage well product million red this products with categories. to the as developing Specialist top the compared little by of through blue last number as the a geographic is asset, third and and sales product increased Specialist Strategic of globally WD-XX quarter, quarter and

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for support. In successfully culture to times. tribe cornerstone challenging our success we times tribe Company. We that at a empowered We that pandemic. defend five to as times has WD-XX greater the members navigate celebrate excellence. purpose each consistently at us our operational and attract, community And employees engagement global often talented initiative than of is asked that been to tribe with culture the culture I helps why so Company our not fight to of some WD-XX under tribe our family a other. gives call tribe for am duration our good us us that tribe definition and culture family strategic cultivated members retain XX%. is grow gives number extremely develop initiative a In to goal company has tribal It true feed this with. to is to shared decades. Our for tribal the define a a that This good and remained member throughout and

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excellence on be our continues to initiative. enormous an a our this ourselves for pass measure battles. we who as navigate an to we operational against share the business update XX/XX/XX challenges an overview operational Using excellence sales will now commitment to and the our win Steve I’ll asset of as pandemic. Our us with the framework, must model call associated

Steve Brass

in few for quarter combat tailwind Jay we greater reporting last pandemic. talk the spoke making last created and that good the was the Thanks, we that both sales are about you I business us of a them, are for there focus headwinds to has I Today will shared Garry, XX% of detail decisions up a to we are In we will tailwinds. with experiencing in coming we’re and tribe. the moments our and on compared third the year. believed tailwinds COVID-XX afternoon. pandemic reality, headwinds out When

to many acquired who long-term, end post-pandemic continue during of we of sales confident over coming products. experience in during shift the to that patterns the the interacted we know the spending to we users maintenance consumer believe duration new permanent demand do patterns we have due Though end will our of and with world. with that expect to in maintenance the become of users do not of users growth new we products magnitude experienced We era our pandemic due shift millions high pandemic. very the products consumer the is around our the associated the pandemic, spending for see The we’re this have

closer Americas, quarter were include Let’s in sales strong due and Latin Latin products WD-XX in Multi-Use driven we new several XX%, to respectively. America of XX%, by These with sales happening States, in In isolation Net XX% the at increased America experienced the Canada, increased in for XXX% phenomenon. Americas. Product the WD-XX Canada, and trade Multi-Use maintenance XX% Americas, the block. trends starting in and of to the third renovation United to look sales are of $XX the Product strong U.S., Sales take increased due record the revenue the up which a United sales blocks, the our a what’s trading million, which States, factors.

at negatively were States disruptions WD-XX investors chain U.S., United shared experience related sales the maintenance fiscal by year continued In making which we the Specialist, these constraints, North by period America. quarter. impact lockdowns strong issues third-party in were sales pandemic. particularly from stages to disruptions and products, impacted offsetting that impacted Sales of impacted strong. sales were our and components, good heavily raw be of which increased in high continues constraints. lower and supply addition, certain by decreased corresponding the cost negatively of freight sales to a supply global which U.S. consumer prior in and in level Partially the to very demand to Specialist, for availability COVID-XX some during the manufacturers are that In quarter. of early Specialist in XXX% WD-XX of the America. we XX% continue Canada demand supply The of WD-XX the and for were the news last the in sourced WD-XX materials, with chain The Latin labor recent Specialist WD-XX chain Specialist is XX%

issues good and will of WD-XX making of is the expect issues half impacting toward the progress tribe XXXX. Specialist resolution the most see first resolving the we of by However, we

Our our chain tribe environment. current has supply in operating gained many learnings moments the

was to make in third America, those Latin In market, to increased apply which North the our sales in strong all will sales newest learnings strong Mexico. maintenance America. We for we due XXX% This future chain during growth quarter. the improvements our in our supply to products experienced direct quarter, to primarily

the stages related America addition, early of impacted lockdowns period COVID-XX the fiscal to In disruptions prior in the sales Latin year corresponding by and in pandemic. the negatively of were

the see to strong continue sales conditions restrictions our region through phenomenon in we channel. the continue experienced and quarter, maintenance and the increased renovation of sales XX%, increased in demand As e-commerce by end which third Canada, decrease, Latin user increased all America. products In during driven improve the isolation to we

our cleaning the lockdowns corresponding sales such pandemic. the In homecare and experienced disruptions increase to fiscal due in due of the products year demand to many addition, of negatively in sales decreased homecare and in the prior in pandemic. the Canada to compared the comparable of the of Americas impacted early products significant of prior our period cleaning in of XX% for year. products increased by related period the and stages COVID-XX to the were year, the quarter third and States the In Sales we a prior United

to regions within for now due health in demand have levels and We to the seen public improvements related these in many restrictions to safety more products the return Americas. pandemic normal

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

have opportunities annually. sales within revision long-term to the will to within reflects the between new we block. trade X% growth X% X% from anticipate This X% segment Over we this identified grow the

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

third WD-XX in third to higher In this of region XXX% addition, our the during lockdown increase and WD-XX EMEA quarter sales fiscal of net In quarter, third year Specialist previously that severe recoveries the In EMEA measures much increase to of in which had fiscal due in XX% direct quarter, due in In sales our markets, In sales. Multi-Use made in year third XX% EMEA XXXX. sales of COVID-XX sales, half our sales. lockdowns during markets in global business continued the distributor of primarily for are XX% due our net distributor year the sales of third accounted segment the the the markets experienced the the second our for in quarter distributor XXXX markets, of to the up we total, levels quarter. EMEA XX% region the a EMEA accounted experienced occurred severe Product pandemic.

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

isolation XX% the million constant foreign exchange exchange year. X% a from to countries the in China Asia-Pacific, region, relatively favorable sales last currency had third on were impact from down net for in in our compared currency quarter by products includes basis to remained which sales these were Asia compared would period-to-period. segment Australia up XX% offsetting sales these have cleaning currency On would Changes of On basis, related in which $X.X levels a and compared year, to constant were Changes the in return more were as and foreign and homecare of on to favorable compared rates the impact to improvements due third XX% demand XX% to million. the in we restrictions lower sales were million the a net pandemic. third in a have quarter in to In health up public X% local renovation increases year. to in seen safety a last WD-XX our sales $XX.X Australia, $X markets, maintenance increased to which of year. Australia, have up due driven to on primarily to net In were quarter, X% products, for sales phenomenon. Partially distributor currency due Specialist, down X-IN-ONE XX%, In sales $X.X sales last increase Asia-Pacific quarter, during driven Korea constant in sales products period-to-period. and the Asia-Pacific, last economic were COVID-XX sales sales in these had quarter, in increases sales positively third primarily easing resulted Philippines, Product region. and primarily and Asia measures respectively, net other million XXX% China, the particularly and restrictions in currency In third strong X% by rates up up Now to the in WD-XX of by Multi-Use compared were conditions the of higher in South Indonesia. quarter, the lockdown sales year. and last and lockdown impacted reduced sales sales measures increased in the These of demand Australia, and

due you with sales and third there XXXX, no significant fiscal we of operations COVID-XX quarter we sizable global for were growth comparable sales Overall, full China in fiscal to XX% events in sales strong experienced shared for third quarter In quarter I the our in That shipped had delayed were strong in were quarter. measures lower. orders third of resulted year, lockdown reduced that Asia-Pacific very As as up business because COVID-XX third resume made the the increase in our sales segment been China this the quarter, expect considerably. occurring year. last a pandemic. some to Since China in our began the for normal total, we

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

we battles. XXXX call in and net focused to $XXX our million and our drivers growth, probably from between right execute win key which on sights targets revenue consolidated our $XXX we to seek our pandemic million, against remain deliver set the and wrong we As drive of to roughly emerging continue and must to sales

expansion significant a of red yellow growth win battle must This this within in were Multi-Use the of XX must growth sales Our up XX% can opportunity opportunities $XXX.X Year-to-date little global opportunity blue largest year. XX% focus -- our is increased on last top, impressive growth to win WD-XX exist million, and growth the top geographic Product our first battle. with reflects compared markets.

million over increased in minds end these We investment and priority by our a on $X this markets. in these focus of marketing markets users hearts have the with top winning year,

a China, sampling contributed industrial significant For Multi-Use of WD-XX has have made Product year-to-date. increase we in in an and XX% of to example, investment of net sales that

Mexico, strong and very to in In continue driving growth are addition, make regions. in we India investments A&P which those sales

to the world. with flagship will in around brand end We invest building users our continue

second to Multi-Use Our premiumization. $XXX.X for win as margin year-to-date, sales EZ-Reach, battle of revenue million, is WD-XX Straw must creates and opportunities gross XX% WD-XX through of WD-XX well global Smart Multi-Use grow Product when Product. growth, were Premiumization expansion, representing nearly total as combined, of sales

As continue we our global penetration Straw, next-generation greater objective Straw to to is grow Smart Smart than to rollout XX%.

us Our around through grow win competitor but remove to to product new that product and Specialist. WD-XX driving our deliver must to needs core us brand to stretch, third enabled store line physical from the WD-XX is grow availability Specialist Multi-Use solutions enabling WD-XX is battle world. has reached also end The user shelves Product.

as As blue WD-XX to around yellow space last distribution with can competitive compared shelf world, little and top with million, Specialist we $XX XX% some year. a and the shelves we Specialist often add up were of the sales WD-XX Year-to-date, remove for red well. from gain

sales by $XXX end revenue we million reach XXXX. year WD-XX approximately Specialist earlier, believe fiscal in will the As mentioned Gary of of

driving focused commerce. battle digital is on win Our final must

has e-commerce and reflecting end a educate the ambition accelerator for easy digital in the brands. and find thoughts the world. future, post-pandemic sales Global outstanding have shift at to strong see for online, want lasting certainly benefit strong. to with closing, behaviors the positive few making online significant share from it is year-to-date our create well-positioned battle scale believe this In XX% you engage users we been We exceptionally of our as themselves to this memories results a I future with growth. quarter, and and and to to purchase e-commerce users demand grown Our about we’re on end

up million, primarily take suggest for the conditions range likely XX% will that between revision quarter. year, third between reflects experienced we that sales However, sales $XXX growth into is to be strong strong of sales Market be which net XX%. investors fiscal should beginning driven quarter, by a year-over-year million $XXX of consideration. upward comparisons very This the against are in net full the next sales and results in to and to we

have the would term, products grow longer users consolidated the many our that during single post-pandemic net of In pandemic in permanent who of the expect to we’re Over interacted world, our a sales optimistic new solutions. with maintenance become users we will the mid-to-high digits. end

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

Jay Rembolt

Thanks, Steve.

third consolidated $XX a with compared million. year. last for period $XX.X the the Our across operation strong driven demand to to was by was sales million Net quarter, million to the In third last record coupled quarter performance. share maintenance for grew was same quarter $X.XX, compared quarter XX% income we per third year. robust third $X.XX net the by all earnings $XXX.X Diluted products, for

our XX/XX/XX model, begin the targets to let’s business our we business. guide Now our long-term of review use

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

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

the costs primarily rates, supply are third our our chain to period-to-period. gross our by quarter, at to at margin other labor manufacturing due our sales and the year. XX.X%, In by higher was Also linked in costs change by was costs. by euro a pound higher and First, sterling These XX our foreign year-over-year. to constraints the were driven overhead gross global than of gross negatively fluctuations XXX gross third-party last basis margin. manufacturers, for Gross impacting points represents the in EMEA impacted XX XX margin against in points. This This costs, margin basis increases manufacturing cost caused negatively our we’ll compared in of from because or the rates mix and the miscellaneous changes increased in due sterling. in the the decline points goods look exchange are generated pound sourced in affected while sterling, of basis is exchange segment our approximately XX% currencies is EMEA currency in U.S. This pound adversely majority of revenues to the dollar was pandemic. which XX% margin

gross were oil by Finally, petroleum feedstocks decreased The of our crude prior to the specialty year. quarter. negatively impacting margin months our compared margin has of based past the third over based the specialty chemical risen gross points oil petroleum several significantly as costs, one of basis Crude in is chemicals. primary price which the XX our

lifecycles. to third by our is oil goods basis these sold aerosol just cost or partially These aerosol segment. increases. see volume quarter, the higher of In our negative components of costs, There our to in we margin goods XX cost achieved of of material sold these to goods Our expected in the remains cost cost the to higher gross favorability incentives by as more in are production increase margin lower sold, to purchase unfavorably long which [Audio of impact were levels. a of impact at due points. raw positively impacted gross cost and recent as delay these now can continue is EMEA beginning cost and often our Gap] impacts other cans crude offset changes to the before impact Therefore, inventory in due one quarter

points and future. distribution impacted gross by However, cost we recently XX positively more and margin expected components from the cost freight cans higher experienced primarily have a quarter. sales the we Gross and costs had in quarter, aerosol seen smaller per basis Warehousing, our our increased pressure other costs our cost margin benefited fixed to impact in EMEA as due segment. in the in warehousing fixed these

and In and movement addition, for Brexit. materials preparation associated freight quarter higher the of had year raw prior costs goods with inbound finished the

margin Finally, gross XX and positively discount by positively points. our when impacting charges which gross price were lower our increases, impacted combined, margin basis

we’re talk environment. expectations. many challenging let’s Like chain gross inflationary about a Now, in and operating our other margin companies, supply

in and are input rises freight experiencing raw We’re driving all costs, costs. material, wage higher which

to target order over we to pressures of we continue economic margin medium-term, markets. we have the these XX% experiencing, in combat on remains to experiencing, the margin. gross the Despite to factors our adapt implementing In of begun dynamic pressure times, to are short- however, expect many we price unchanged. increases see We been continued our gross inflationary have

be target at or We can XX% business the we focused margin so above gross in managing deliberate our continue to maintain that of our and over long-term.

which Now the our I’ll quarter, sales, a of address cost percent cost year. XX% third sales as In business flat business. approximately XX the or last net doing of doing our of of was was compared to

due our our XX.X% or driven to by was by XX% blocks. period last make in last complete due was finally, net get increased quarter A&P of our year. the higher and of the marketing the in year, quarter, the XX% was both costs investment programs majority to compared incentive to EBITDA, A&P financial support from unchanged year. that investments we cost of primarily to quarter the On a products comes for primarily customers. same third EBITDA third discussion employee to higher of business dollar X.X% to with of three comparable people to a million will promotional the in XX/XX/XX measures. business basis, And brings cost compared three to sales our up This tribe, was of us the level last The the we third and sales, all our our let’s trading our last investments from advertising on due costs, taxes freight benefits, promotion, in and tax fall from as XXXX. of business The the marketing, tax the of tax below XX.X% our make the our items areas, our from in third percentage know, EBITDA to fiscal of year, investment As operations, decrease stronger primarily A&P a you compared was due the effective $X.X was provision cost for year. compared expense period with a in credit the investments increase SG&A coupled associated resulting in now compensation related $XX.X line. last rate last increased higher income model, some the million results. investment accruals period-over-period. higher costs by to earnings and of to third SG&A one-time quarter, discuss income that quarter The foreign

the approximately XXXX, We expect that XXXX. be compared rate fiscal an will XX.X% for effective to XX% to full our tax rate XX% in year year effective tax of of

balance Now sheet to a investing strategy, while a our The providing in word returns capital allocation capital condition and balanced includes our liquidity strong approach company’s to comprehensive and remain long-term financial growth, shareholders. strong. strategy the about

continue to on approved Directors On of regular of capital return shareholders of XXXX. XXXX, through to XX, payable a close share, July We XX, of quarterly at the cash XXth, to the $X.XX dividend dividends. Board per business our June July stockholders our record

equipment next-generation of system. delivery to we of have million fiscal $XX the been which have that invested used majority complete projects, approximately proprietary in manufacture machinery our in capital our Smart using Straw and far So we’re procurement XXXX, the to

investment of We end to next-generation million will of a this prior being we the delayed fiscal primarily year. Straw total expect of our due have is million expectations until in This $X capital equipment invested from next Smart due year, by the -- projects. $XX down

we So the XXXX Due not to guidance. impact on guidance with have year to uncertainty for near-term issued pandemic’s the turn fiscal XXXX. fiscal financial regarding comprehensive that, our business, let’s

revenue revenue completes strong earlier, overview. full for that in to the provided sales are Well, guidance, third the Steve our due and the mentioned However, the we increasing experienced year results financial we we quarter. have expectations as

turn it I’ll Now, Garry. back to

Garry Ridge

In new did this us Jay. third Thanks, hear quarter million, call? summary, were XX% in that for you the what sales from company. up net quarterly on $XXX.X the to record You consolidated heard a

in You XX% heard were the Product of third that WD-XX sales up Multi-Use quarter.

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

XX%. that year-to-date over sales by global heard You grew e-commerce

and hearts with minds heard by increased of a markets. have of end You marketing this priority winning in top focus on users we that some our $X the million our year over investment

and business model. are recently that to You price because combat XX/XX/XX increases impacted many heard our way costs, our to rising in of order to markets, implement by have being we’re we the these committed in pressure inflationary the begun

expectations You third between driven have and strong revenue $XXX believe net by increased sales in upward be the that our heard full year is will quarter. experienced we and for revision fiscal we the million and that that sales million $XXX

Thank you by difficulty opportunities. growth today in You $XXX adjusting quote us the like successfully the $XXX XXXX within we lies million to we range reach between compounded reflects every XXXX. pleased annual with revenue you these questions. Albert and mid-to-high digits a year now from are In can of and Einstein, I’d end share to single of bring a your closing the fiscal our today we a We’d targets joining which be believe for in million, middle rate of to today. take heard targets that

Operator

from with is D.A. question first Weiser Davidson. Your the Instructions] Bolton line of [Operator Linda

Linda Bolton Weiser

a really Congratulations strong there. impressive growth Hi. topline Yes. on quarter,

So your in of COVID grow kind particular so Asia why does are then, would you us if even am mean, think you deceleration are secondly, you guidance June much at the seeing in regions year, of remind imply something Americas sort those actually I do revenue in what far of I I like we so revised that year, hard can though I the prior related? the quarter, and And was can just bit fourth down have think, little comparisons have the hard? a and in you it really growth a expected. for the which comparisons. wondering look EMEA fiscal guess do was you

Garry Ridge

sales between Garry. The year-over-year. Linda. have we Yeah. It’s growth $XXX a range. that revenue be guidance give and will $XXX somewhere why QX The given shows we approximately that top That’s Yeah. end of Thanks, million million.

the because we that full So, we fairly show given for modest which will the of quarter-over-quarter range in third and with increased the probably year. last the the strong a versus results year-end year, growth we feel target quarter have comfortable

do comment on Steve, you Asia’s as the there? far want As shift concern, to

Steve Brass

Thanks, Really just Yeah. Gary, and comparable hey, versus year. prior Linda. it’s a

QX if So a QX. in we particular, had very year China prior look and at you strong

strong well tracking Asia very and QX QX. between year-to-date that’s expecting China and year-end well. we’re a true mix for the we Overall are the growth it’s for whole So as the of very and for

quarterly phasing. a just it’s So

Linda Bolton Weiser

mean the what you’re already I can And June? I month any facing growth slower see us you where mean, give color June, a you’re about you so and in Okay. that seeing is in hard little comparisons a bit

Garry Ridge

we will in some we refer and year-over-year, there given -- our out medium that I’ll and if if that took guidance year just back Linda, growth the show the Again, that. to have full quarter you guidance

don’t year than the So we comparison and quarter. the is to for that $XXX but different be million shared and $XXX full now anything it’s we somewhere would which a number, necessarily going between million see quarter be something fourth revenue the have in hard what

Linda Bolton Weiser

across price And Okay. Are us product already emphases is regions, your of some some can And kind then in you starting any increases the you’re being just particular ideal price any of magnitude mentioned to increases that board? there take of give lines? taken? various in percent you

Garry Ridge

Yeah. It’s -- we and on what cost lines major product of goods. mid-to-high and depending around country most countries in in world impact single the varying what on across had have our our major place it’s digits

world, of are seeing coming WD-XX and Product, the Specialist, this some are really is we to on increased increases from So which costs passing inflationary But oil. real manufacturing material we’re raw WD-XX the increased price pressure. componentry across costs, due most seeing Multi-Use of

on those So mid-to-high product are impact costs single and digits depending the and having. across which country all what

Linda Bolton Weiser

would in quantification little Okay. in frankly second And XXX came versus pretty basis basis half like the said believe it the bit to quarter, had points then margin gross be would a in in I to XXX second quite And of be the a estimate. last points third quarter? Jay my call down close

just statement margin? magnitude you increases saying price and cost were even what going of to the am an I previously I modify materials you mean still So up is maybe now do or want wondering accurate more? gross with that the about the

Garry Ridge

over is it margin turn I’ll the Jay. man. He to gross

Jay Rembolt

thank and Gary, Thanks, Linda, you. Yeah.

will third not margin we we see expect our the kind I the think and Yeah, what thing margin quarter, some quarter. the talking even The brunt we about price expecting pressure by way were go note the the though that one to the still on short-term. of not the some is fourth down. was the of of in full continued market the of did increases make many into see costs that their we’re time through we

after of end year. for So or in slated earlier the the primarily they are the

of It of from bit. price benefit delay kind little that. will mitigate So that will some the a increases

Linda Bolton Weiser

in next-gen fourth Okay. can Thank about launching the -- then CapEx. you. new said of some this push out quarter. And Straw in you had you helpful. I you That’s then about the in the the you think U.S. Smart talk But quarter, talked had

delays there still are the this expecting timeline are to that launch quarter? in U.S. that’s or So that you or in anything changing here

Garry Ridge

Thanks, Linda.

see will appearance United X.X Straw the in quarter. the fourth the as shelves next-generation of on You we move to Smart the through States start

Linda Bolton Weiser

and of thinking strong not you some kind your flows share very Are of with maybe for I mean, didn’t Okay. earnings, guess, are like, timing in I resumed your just are then, are Great. repurchase. your you clearly, resuming cash terms have question you your, on what strong plans what but And -- repurchase? share you, a

Garry Ridge

want address you to that? do Jay,

Jay Rembolt

Yeah. Yes.

we authorization. -- don’t an haven’t We have

expect the Although, Year. for be an to authorization as we looking New would into we move

Linda Bolton Weiser

on there Thank I’ll guess, it at I the leave and to next you. Well, person. Okay. it pass

Garry Ridge

very you much, Linda. Thank

Operator

Jefferies. is next with of from the question Your Rizzo line Daniel

Daniel Rizzo

taking question. Hi, guys. you my Thank for

Garry Ridge

Hi.

Steve Brass

Hi.

Daniel Rizzo

increase I the growth? the you from come wondering I the to or I to that faster looking for outlook more for X% increased you mean, I Americas, was just the was color X%, where X% on from just think, growth. X% sales the long-term to expect exactly the elevated

Garry Ridge

to would like please? you that, Steve, Sure. cover

Steve Brass

Garry. Hey, Sure. Daniel. Thanks,

you we see, have had fantastic helped quicker. -- it’s the we So really about the driven overall you growth Mexico market taken the significantly growth we grow that’s heard faster direct, have really has see as and Americas

Straw it. opportunities Canadian higher saw transform. growth, for the So is before. of a of whole Smart prospects we Latin than Latin now Mexico to we America, America, strong next-generation, growth with see Also part growth geographic

whole driver of accelerating So, a we out of also the the there stronger our forward. Americas, the premiumization. since channel, so States, despite growing very issues well growth across we growth short-term And re-launch see of doing packaging see that of broadly. WD-XX refreshed as the the E-commerce Canada United growth Specialist in then the fastest going strong for we’re being

increase the in in of would be So confidence Americas behind our they the future the the region. main reasons

Daniel Rizzo

rest will pull-forward around third specifically past saw sales move delay, there year, things the the of delays the in what you a -- was is I this in was Asia, in timing more in caused third be wondering in played last think sometimes regions then, was year if which in I quarter and evident decline. the a a quarter? of especially I given order any there different that or with quarter has And the Okay. kind in know fourth

Garry Ridge

New the basically and the tissue delays XXXX back and of be Nothing of happening of beginning major China that that we -- would to shutdowns I year, when COVID happy of what the or the concerned scar Year the have significant completely shutdown Chinese about in was have of were ones year really be memories -- think, we we due then. about, we saw were around all last

now although on of So now. again, and different lockdown in things the I control Australia hope again the U.S., the dropping horizon it to and and certainly vaccines did it’s are see they world seems helping somewhat is seeing there -- normalized calmer lot way way we’re of is the ago improving cetera. think, a the obviously on the seen et But We has countries the year how things COVID. vaccination, depending given become in out spread the in than that a

Daniel Rizzo

we that correlated. then question, final you issues of quarter kind highlighted last and so And kind third-party the Okay. then of

quarter think QX? masked them. I different completely but why such because time them offset just I it’s wondering why it I don’t was it’s why and here versus in still it’s just QX exist -- or it a they unclear on know I this you was was like strong seems different,

Garry Ridge

Texas, some were cans redirect of areas. didn’t particularly able certainly -- aerosol which our was were the manufacturing the actions the We to some across we big freeze chain, our took. of impact around of There for suppliers shutdown weeks. of cans, we supply different impacted of Because major in have

second few a have So and redirect manufacturing has a in although is labor up now freed that and some place had working bring becoming different the tight. things shifts, areas available, our flow had to still inward it’s goods we on and been little, packages we to have happened of of where

they and shows it have the just for of that have done hats an we’re a pretty time. they really going And told we period fortunate hold is time were to and time. amazing chain to this, sweat work just tears resilience and up in we critical we us that at get that off grateful this of done off to to so our culture job but and hats our the tribe our hard supply and through a steps there number leaders, So were have taken that and during supply the chain our of

Daniel Rizzo

Okay. Thanks. Thanks for all the color.

Garry Ridge

welcome. You’re

Operator

you And that does today’s conclude for participating. Thank conference.

You great may day. a Have now disconnect.

WD-40 (WDFC) 8 Jul 212021 Q3 Earnings call transcript