WDFC - Earnings call transcript Q3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by. Good day. And welcome to the WD-40 Company Third Quarter Fiscal Year 2022 Earnings Conference Call. Today’s call is being recorded. At this time, all participants are in a listen-only mode. prepared will of session. a end the remarks, conduct we question-and-answer At Instructions] to for the like would today’s the Ms. [Operator now to turn I presentation over call, host of Investor Vice Stakeholder Kelley, President Engagement. Wendy and Please proceed.

Wendy Kelley

afternoon Good everyone us thanks Thank you. and for to joining today.

for today call Chief Also President Chief Chief Vice Finance WD-XX Company’s Chief Operating call President Executive and Financial Brass. Officer, today’s Officer, our Executive on Hyzer. Chairman us Chief Vice Garry incoming Officer, Officer, our us Steve President, joining and are Strategy Joining and Financial and Ridge; and Sara and is Officer, Jay Rembolt; Global Incoming

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

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

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

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

Garry Ridge

today’s us Good call. thanks for conference Wendy. and day joining you, for Thank

X, will President, a Chief take Officer today. to Treasurer I’d Vice become, investors to begin, moment Before Sara we Hyzer our call accounting with and effective to year our Finance, shared this year. we financial and that We joined Sara XXXX XXXX like welcome finance Financial teams yesterday completed filing of November the for our as XXXX, tribe XX-K. global last strategist fiscal once in Sara have

We this within the are tribe. during today’s will available question-and-answer call that thrilled to portion her. she of has questions any opportunity accepted our answer have be for you Sara

will our XXXX sell planned our will late you impact his may has on announced call and his and Jay XXXX. As know, company in next us Officer Financial been retirement has -- retirement. immeasurable. he Jay since been then on Chief Jay the into quarter with off be

we results. was fiscal quarter Now to decrease X% Today, which net compared the sales of let’s turn XXXX, reported to for last of third million same the quarter $XXX.X of our a year.

As coupled was the a year, Against bar demand comparable, we reported for strong third maintenance with a of such robust quarter the operating performance. driven sales, products, high. our reminder, by last in record

us follow have heard for say In XX to to not quarter addition, you me quarter. years

that performance pandemic COVID-XX follow since you are in This will quarter If began. unusual. closely, quarter true the been our know not business especially has you fluctuations to

trade operational record believe fiscal block our talk sign Steve year, in the sales not today full cost significant broad-based we pressures we challenges the Company. gross are tribe, Inflationary will of our little will are in results relief. increase unique the and face our increases challenging down, sold. achieve quarter a to detail our products came to the which greater reflecting continue These at to few a to about in the with Unfortunately, for inflationary of continue reporting are cost sales sales sales Although, year. and we for we remainder in in positioned results, growth results are third for are environment moments to XX% WD-XX of margin result near-term

However, to through greater time. talk moments over impact what strategies detail challenges us will in to a manage that doing have Jay has on will we our position these what chosen, the are think few we been margin about and the in we restore.

continue channels be around countries dividends. a sheet, steady strong capital strong across with flows balance to had with to a continue diversified We our business to investors world. cash and We a note, the many and generate regular return trade

critical the in WD-XX the dedicated assets we purpose. addition, and strong ours our tribe times. to have employees is Most role at brand are company committed robust turbulent passionate and are great In brands like who

Let’s talk for about strategic our initiatives. a minute

plan have we long-term strategic the continuing place are the aspirations. to company’s achieve in Our initiatives

have support remain strategic we drive long-term strategies end following which place $XXX of get to build target, Our long-term initiatives Strategic fiscal company’s million sales growth between to tribe for business number committed is our future. our XXXX. aspirations XX/XX/XX is the revenue and there. strive to business to the million net and model. the in by do one initiative a while to to so $XXX We Steve and

process. The under to initiative strategic initiative fully to desired to is integrate heart outcome of will this proud build goal Gap] pass on planning the an strategic that to Our next is for our business enduring be [Audio generation. this

and We expect position we our our ESG progress progress report, will be file that ESG early on XXXX. we in fiscal ESG are In priorities and our matters. making setting articulating our report great key in to next

in greenhouse agreement. to are need line Paris We in to early stages the with of our emissions determining we what be the to do gas reduce

made update our provide and progress efforts. on an equity inclusion belonging have also with stakeholders we diversity, on will We

completely an our will biggest nurturing is inclusive and learning attract One was succeed members. We Board our while to that and driven number by our engage have members Operations Committee. Vice and equilibrium two DEINV. of added they is and Board month area, and we belong, as has tribe organization, President Strategic experience as in significant Instruments. as beings our and critical Musical will and desires to human why new leadership at Fender have that this senior currently tribe we for serve members have we of to that’s added the some sustainability, outstanding at Executive appointed chain Audit the develop own purpose shared diverse Eddie teaching a He created Finance Ed member believe initiative level. Last logistics. together serves Magee and supply building tribe manufacturing,

Cynthia it is strategy Officer Burks fundamental human initiative has makes at all Additionally, extensive Strategic perfect is culture the President three knowledge people. which capital Vice Cynthia been for and WD-XX stand for served recently understanding that nominated about annual really her Chief we and People Genentech. shared of a the Culture a strive Senior election operational Cynthia that next our to meeting. advantage, most as a for has at and number Company where excellence. fit competitive

initiative us. likely a against which us goal every business operational to initiatives. is operational ourselves Product. number in economic member. for Strategic grow this four continues we an responsibility model framework Multi-Use Using is Our tribe front to asset XX/XX/XX Their our foster these WD-XX enormous of improvement the commitment be under operational initiative continuous to measure navigate as excellence a excellence of of global challenges the in culture excellence to

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

and digital We delivery development and easier line systems the continued grow market end-users and through through use. about unique Product will uses penetration, new of Multi-Use WD-XX geographic make expansion, educating product that the increased new to

number down to strategic of Specialist quarter, growth initiative closure for product were XXXX XXXX. Multi-Use $XX.X is have grow we years is five this to Strategic Multi-Use line. XX% WD-XX The our desired aspiration. WD-XX we are to Product this sales in seen by million recent grow million approximately Product strong $XXX outcome to sales WD-XX Although, as towards initiative

Specialist Our XXXX. The goal opportunities initiative and six, for sales to grow. initiative expansion. expand products to the strategic and positioning is categories, help of of that portfolio to build under support WD-XX and and WD-XX $XX.X In this Specialist by desired through to WD-XX continued million. is the reinforce new core growth digital which create quarter, Strategic leverage increased third and developing grow brand the sales us this number approximately by million XX% globally outcome initiative $XXX geographic

and In is expect expand support included this the under million strategic approximately that this initiative number, The globally by be brands initiative of sales be initiative homecare the this on These to will revenue cleaning likely now this decline an no of sales many desired to our vac, healthy pass million. provide most in $XX and brands help GTXX, reach an and XXXX and outcome we $XX.X and category home care in time, will Brass, the strategic over Battles. of other support Battles. will share our growth. but call plan I they soon initiatives sales our Must-Win Steve will returns. sales and are our GTXX, our are contribute initiative will as for like goal protection focused Brands results growth CEO, sales To decreased action continue product to Supporting to XXXX. brands. under overview grow. Must-Win to quarter, third our XX% that our update as and to well who us include Our under brands us X-IN-ONE X-IN-ONE, of cleaning

Steve Brass

and Garry, good afternoon. Thanks,

Garry instituted declines, prior compared action earlier, to events $XXX.X these the Shanghai in or net mentioned lockdown to the that in There million couple and As were sales quarter, year. measures million by the X% third of military were significant $XX.X severe taken led Russia. including down a

in net of prior experienced Currency the EMEA would our in the million the year. quarter, year. reported products EMEA. impacted the decline record the in the third to we basis, sales in have demand in third been negatively we third decreased X% quarter, sales addition, in particularly $XXX.X quarter On regions constant for currency In a also from compared last certain

the However, we compared believe will June, position to year sales year-to-date X%. up year. to and of the sales full for net fiscal between X% strong sales experienced in month growth We last were to achieve us which X%

Let’s we a closer look of trade that can what’s understanding better blocks, take impacts. our so in these a at get happening

a million the in in of compared we Product, to the $XX.X up respectively. United and and which which in experienced XX% positive maintenance the total, also the shifting which business strengthen. production by of up and due momentum in States, we WD-XX primarily promotional capacity Canada Latin the strong includes sales sales to increases Americas. sales to timing price increased earlier X% from Product Canada, third Americas Product. Multi-Use and sales to in to direct distributor at These Sales WD-XX a lower level will as sales the specialty this quarter of quarter, were our increased model shift in which promotional Americas due global Americas, the industrial sales with year. In quarter. the our We as we XX% in of Product, due Multi-Use products XXXX to experienced X% maintenance increased Multi-Use supply In fiscal United from of States, to Latin of continues start and our primarily quarter remain America, Sales market, up which well Canada, of were Mexico XX%, went Latin completely sales were last third the year. due products demand increased XX%, effect of activities America, XX%, offset WD-XX increased to Specialist, into as made higher were sales XX% offset to in programs. up the America the were a increased improved by in the for that and WD-XX increases segment sales of the of In strong Multi-Use primarily made customer the channel. chain increased because due WD-XX in our In constant, WD-XX orders products lower availability

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

quarter down XX% into which Now in EMEA with sales on demand due the currency associated decrease third East, Sales period. to year. take and and direct certain our record third and products experienced the in the markets, a direct maintenance quarter, experienced to we particularly not EMEA decreased Middle third in India XXXX, In in This Africa decreased to sales respectively. if last only however, XX% last EMEA and of in of the renovation decrease the is Europe, XX% markets to markets, EMEA in year. we X%. in sales quarter sales consideration, $XX.X both pandemic. sales were from includes XX% million of in distributor compared to also we products which our in EMEA attributable primarily in In the These maintenance compared the to sales EMEA, maintenance to strong direct third XX%, decreased trends our EMEA declined were quarter prior reduced linked trends regions by

This our accounted a the quarter. this In this in primarily to markets our EMEA quarter the up we values our made XX% distributor $X.X maintenance suspend global an to of of XX% compared decrease region’s total In Russia, customers our March, sales suspension to direct XX% our distributor sales sales unfavorable in XX% our had our our for accounted region’s products quarter. EMEA impact early quarter, marketing due products of through sales. markets, year. third of decreased guided segment last we which of the resulted in in Belarus, experienced sales EMEA our of made and sales sales EMEA Russia sales. decision in region and in on to sales business the markets in distributor the In this third In in million

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

Now other the the million in Asia-Pacific. by distributor $XX.X due is sell product distributor in China Sales customers third year. quarter. sales markets on markets In sourced end-user These Shanghai. includes Sell-through the to quarter and XX% sales markets $X.X The we in from XX% to third million. Asia-Pacific Asia-Pacific, in caused throughout compared distributor to pandemic. were which down were quarter, region, in our in manufacturer were Asia last the in our to strong to Australia, third-party the third Asia-Pacific our down countries disruptions declines Asia-Pacific the the remained

lockdown Shanghai, also impacted to we replenish to to severe ability China to in the significantly quarter. will the further barring down ship XX% sales unable impacted to marketing what measures Australia, In on compared subsequent or in severe the of Asia sales we were ship inventories to $X.X where supply which were product quarter distributors. date, any fourth in resumed Shanghai last disruptions, most China, instituted The we the to to we that our measures chain ship unable in due customers lifted However, million were in we our were measures Lockdown third expect year. third and increased product our the Xst, to year, quarter, price in our in shipping third and lockdown compared increased that were into X% promotional to of business, February. $X.X million effect last went increases activities primarily quarter, base due June ongoing growth in

sales XX% to Specialist third the continue sales segment by strong of the increased XX%. see business WD-XX In global Australia. our WD-XX our of total, made in We of quarter of In quarter. Asia-Pacific Specialist third in

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

will sales against are million of enable our million revenue $XXX focused growth. XXXX. hyper the Now action that aspirations primary drivers Must-Win drive the of of a revenue to to Must-Win brief year $XXX and us between to end are update growth on by These the Battles Battles, our key areas fiscal Our actions deliver

growth Our first red Must-Win in can at the geographic little is largest expansion a blue with Battle a and top. opportunity yellow

to the estimate global for Product We Multi-Use approximately continue brand be with Multi-Use X% up our WD-XX year-to-date. to billion. global of growth of experience opportunity growth We sales WD-XX flagship $X market Product

these like we and in environment China, highest and India, geographies. Even Mexico XX%, have of are for operating talent identified year-to-date in experienced growth are by XX%, treasure have our XX% where the we potential list and sales volatile markets, growth We priority we in, increased show and which a priority focusing respectively. the markets high on time, potential

the will in with We and continue end-users to flagship these invest building around other brand our markets key world.

of of second WD-XX premiumization the global Multi sales Must-Win is of XX% Smart combined, sales EZ-REACH of Product. Product. WD-XX and represented Our when Year-to-date Straw Multi-Use Battle Use WD-XX

Must-Win this Battle premiumized to of than greater products XX% for XXXX. grow to objective sales Our by is

premiumized. long conducted products that emerging emerging to drive recently extensive opportunity emerging We developed that opportunities with in time, and point be and significant markets. concerns huge due fantastic is of there a We premiumized results easily in premiumization. market believe we markets a an to have markets couldn’t have sales that For we learn assumed around both price research

Our Specialist the in the of our third across saw Must-Win Americas. in chain. Year-to-date supply constraints, Battle of corner the growth sales Specialist last WD-XX is XX% particularly to we segments, up WD-XX were compared grow Specialist. sales turned have to of We been the WD-XX on experienced U.S. Though capacity solid we have all year.

addition, and already support and evidence sell what In brand we packaging The brand to our have of products. through WD-XX we the new conducted knew. improve research recently Specialist have now architecture

final Battle commerce. Our digital is Must-Win

digital access, end-users purchase for vision e-commerce fiscal months nine our making the at year it down learn of engage is were Our sales XX%. and commerce XXXX, with global scale, to to easy brands. first about In

how many a it’s For market level. units space at digital that in that us channels, organizational there just the the embracing digital the for in There means opportunity play share about taking. transformation significant we sell digital isn’t pure digital of is complex ahead is about us

For the relatively remain year. e-commerce constant channel to in the will we prior sales compared year, expect the fiscal full

about which comparisons critical up year. going want forward. More channel quarter importantly, growth as In the thoughts In of third remainder the fiscal to net X% we and that few suggest $XXX for million, we our range will these strong several year-over-year share sales a continue impacted X%. to you were a part between I be an the market disruptions reflects topline against very full our closing, of between have and through likely of to growth are the this global negatively leverage integral that are to story with year, million we fiscal conditions sales in disruptions, managing Despite $XXX results.

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

Jay Rembolt

I I To my we may Thank with, you also recall you, XXXX retire. great internal Sara would right of late I that that have dozens let gives like announced for the know It for years that candidates the of Steve. to intention job. Many Sara find begin third and Since will now right leader. to to the relief interviewed known Sara me that person. call. time, appreciate quarter, to near-term In enjoy welcome in Unfortunately, and six I to with you remain you the Well is external the and as the such person challenging pleasure don’t geopolitical to rein results. believe environment inflationary I be impact results. to to as in expect and continue the have. am we working uncertainty thrilled our sight to and capable to I a challenging. environment any operating see continue handing Sara reported onto much the

we supply our of remain and as our chain sand and restore are we been increase am inflation to macroeconomic, ever business, underwhelmed that ignoring However, model initiatives said, implementing not have results, our continue committed the mean all stakeholders chain we XX%. With experience. am in our concerns the tress. by across our XX/XX/XX various tandem flexibility for on target the today, focused as though In even I increases chain so geopolitical, to and in like In that and our forest have opportunities supply increased the see strategic we confident gross term. that by long-term to I continue supply the the about manage head company. we that long of is, managing for these the are exist we margin our capacity What to efforts, segments can costs through implement glad our to business quarter times as we the been actively sticking to third in our market these, the with can price response that are I we I

generate be channels needed with growth, capital steady Most of offset cash confidence taking will our trade a across balance evidenced brand enable we us topline to a revenue both business flows earlier, high continue target. around world. to record end-user our by sheet, affinity, and very bottomline XX XXXX business moat degree pricing long of XXX the Garry strong strong the a to As and countries inflation. investor, with importantly, return continue to and mentioned have to and very a which continue diversified our track growth as strong actions in future and as Have

our Now long-term XX/XX/XX to let’s discuss the our targets business we the third quarter guide results use business. to model, relating

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

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

the negatively by materials the with increased specialty while the impacted gross costs, chain resulted the margin XXX XXX impacted basis challenging changes of drivers points aerosol basis basis negatively increased period XXX aerosol associated points. primary represents supply and a constraints environment due of basis same primarily XX.X% the in our gross pandemic, cost and they related to quarter, for higher by to were decline margin continued decline. and start cans chemical When Let’s chain quarter, costs In warehousing, our experiencing. global of margin. points supply to the globally. inflation negatively with margin came combined, primarily costs our cans. from in points, our XX.X%, due remaining gross gross In Higher third was raw the chemical cost XX freight XXX impacted in the margin This Specialty our the compared year. inflationary third are to Increased we constraints challenges, last distribution been impacted was was our to finally, and negatively in fees by points by freight XX to for impacted due by tight demand margin mix XXX manufacturers, the impact and in to the miscellaneous restoration our These continue filling higher incurred shortages, Gross margin note, quarter. plan basis a is The during a And our distribution points. negatively distribution positive other beginning third-party of XXX market help. were costs. primarily higher factors by On paid margin and product partially offset points costs on basis basis gross of EMEA, negative which increases, pricing the increased basis increases products labor impacts particularly sales gross sales margin this contract benefit Americas. all price this XXX offset freight implementing nearly year. points from implemented have to gross Americas our also have inflation, of services, from worldwide we To year. been

However, see that our markets. yet price we keep impact have of we mind some in in are that to increases the the largest financial implemented of

increase late For flow a the United year, example, in our QX quarter. in we the States, of price increase of fourth financials the price until into but this impact that implemented XX% will

increases Europe summer. We this price implementing are significant in also

result a price increases As in from continue benefits to will we future the quarters. see

Our members a continued to great are pricing doing tribe inflationary job impacts. actions offset executing that are

and price volatile mistake, near-term. no continue will remain costs. to the to business Make implement the over However, and challenging take we input we increases measures landscape to expect rising offset

As I earlier, so focused managing our to target restore committed that margin back our business can and our of we XX%. we and remain said to above gross

last doing compared net doing address business our XX, of cost the sales, the business. XX% XX% to In approximately our quarter, of third will I of cost Now year. was

current get was and a make marketing, we of our $X.X net tribe, the the year, offset quarter when as to finally, For costs of make travel SG&A investment restrictions will our came level year. the of travel sales, of last freight there of as partially related to A&P cost -- in investments we by in been advertising and costs due due is cost investments doing compared products expense pandemic people the we to from business lower as in employee These have to be incentive our estimate, approximately three the result which meeting third X.X%, the resumption lifted. our our by promotion million increases percent projecting or prior of were accruals primarily the approximately our to compared customers. compensation lower decreased will a that areas, to lower achievement expense XX% and

XX% brings net year. of the was last compared us sales EBITDA, last which to this was from down Now of measures. to EBITDA this XX% XX/XX/XX our quarter,

our gross of pressure on sales quarter. Well, experiencing EBITDA business down. we completes pressure put cost on the The business in together decline model. margin that the Our are was reported with this discussion

for fall Now taxes let’s be items our EBITDA year effective last was that expect compared income of will we provision some of XXXX. the to last $XX the million, $XX.X to for quarter full the was period year Net this rate this the income Diluted were for to $X.XX, last XX% line. below approximately fiscal million year. in compared The compared that per year. quarter the XX.X% earnings same common and XX.X% XX% discuss tax quarter, share to $X.XX

and balance liquidity strategy, company’s the remains our allocation sheet a strong. about capital word financial condition Now, and

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

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

the of at During stock we invest $XX we million. In expect in shares third quarter, majority the capital approximately a which bring equipment will will of inventory cost The XX,XXX total to increases we note to repurchased is, like be attention I your Smart in of the Straw our that other manufacture next-generation machinery we for our levels. $X.X and would our fiscal projects. item approximately delivery continue One systems. recent approximately million to using of XXXX, to are

the goods components in materials, and inventory chain meet our increased approve supply demand. resilience ability improve our to to market finished supply raw and improve work of we to ensure we and continue we -- As the to have have that

to turn guidance. let’s XXXX Now fiscal

our We view have slightly the adjusted of current reflect our to guidance business.

outstanding. The net As to growth expected year mentioned we per sales. to to promotion $XX.X anticipated net sales current is investment of X% or on future million. for Gross diluted XX%. $XX earnings is does $X.XX And projected the be and rates. for results and net XX% be million and management’s Advertising or million. be between view acquisitions currency share weighted and between shares around on X%, is of full between is not any provision $XXX expect net an expected projected to is common be XX.X with be earlier, between is exchange X% million income to Steve between based divestitures Guidance be impact foreign estimated between of include based and average and fluctuating $X.XX expected sales and margin and $XXX income tax million XX% X.X% the to and

related events China in further the unforeseen may COVID-XX Additional impact That and the financial overview. results. completes financial other company’s lockdowns

to Garry. back Now

Garry Ridge

you call? Thanks, of Jay. X, heard by us In who this Sara joined will hear next summary, that WD-XX Steve XXXX. CFO what the be be did Hyzer is You November to on going Company from effective

continue that represent results You fiscal believe that fact which a our quarter to were to sales the year, heard full the sales we company. record will the third for we despite down, sales results for growth positioned are achieve

steady dividends. we a heard that and and many trade investors continue channels the to capital very our for to around cash world, You balance be regular across business strong the strong return a we sheet, have generates through continue moat, to countries flow diversified

production the improved You heard Specialist in product the to continue sales and third the were availability. experience strong momentum WD-XX increased and XX% of we due capacity up to quarter

experiencing place. on pressure gross from solid in plan although challenging we gross margins inflationary have heard a have we been restoration margin the You environment, that

to through increases implemented price of heard our third has impact some the that the end our quarter, and You the at positive yet block in implemented Americas were of trading particularly gross in margin. flow the quarter we significant the

take You year be will and share closing guidance our heard be Vivian that XXXX would a $X.XX believe for in waiting have you $X.XX. like per the today, we earnings It’s In for from Life I’d storm adjusted you Thank questions. share dance that rain. fiscal quote now We between to with and for to about Greene, today. pleased isn’t us the joining to to your about pass. learning

Operator

with comes with [Operator first proceed of Instructions] Jefferies. line Please Rizzo Our the question question. from your Daniel

Daniel Rizzo

question. my taking for you Thank you. Thank everyone. Hello,

I could you that or think, is billion premiumization something separate, $X premiumization a are I I worldwide to that market is market Multi-Use market, holding for you separate that that? wondering mentioned, highlighted if is which add You was Product. include think, the

Garry Ridge

Steve, would you address like to that.

Steve Brass

billion opportunity, $X hey, include based yeah, Thanks, it’s close worth it’s not upon, our a and billion top Garry, billion the and in growth, world $X benchmark. billion would and billion total $X on around the that based $X.X total geographies Sure. of actually premiumization $X Daniel. it’s

premiumization, in $X.X growth but it yeah, in total include So, actually it’s opportunity. billion would about

Daniel Rizzo

platform. provide on And could digital the you just more color

was it just know, was new and said little somewhat surprising better giving, I you I that. don’t was a missed year-to-date. I think it’s than just, guess platform wondering, thought I flat am something? maybe I I going still it I

Steve Brass

Thank you, Daniel.

I Garry. also that one And… think take I can

Garry Ridge

Yeah.

Steve Brass

few digital and in we of … Americas is up months. in stocks and region lot to absolutely last catching terms have a commerce, been and the it back of add related rolling our so it’s to

for commerce XX%, were the digital by. So, but every believe now that overall, improving down year, is the so year-to-date I month goes that with we

XX% prior three, it’s so example, over up for actually year. the And quarter Americas,

to up WD-XX pricing, are sorry, and of linked a stocks Specialist. So was beginning lot the that we catch of on to out to

Daniel Rizzo

the I finally, or then, do just it -- obviously, but, mean, to I end because, And issue, are there costs catching an tunnel? but rise, they you. a unending I at is Thank want are sign it obviously, of wondering lot if any of you mean, seems up, was of is an plateauing Okay. light just

Jay Rembolt

I you. will is margin take issue. issue The a thank Daniel, absolutely Yeah. that. timing

in basis pricing points. was XXX basis added through offsetting increases and added of components points, the total, of look primarily fluctuating goods. XXX not from oil pricing other In range, oil, cans from In XXX at QX aerosol in year QX basis our coming that you that but were added pricing which points. in cost this necessarily QX because If is

to of the So offset tunnel are our materials. is starting cost embedded light action what I quarter we the of think the pricing raw at the end the taking is, each

in As in of the just XX% up we QX. until in call, not the this show have Americas the or U.S., mentioned that price in taken we fact, will increase about

totally a So, is timing yes, this issue.

time. all happen back XX% -- or will can’t convinced over once. It it greater we to that at just We all get are

Daniel Rizzo

Thank much. you very

Operator

Linda Please line Bolton Davidson. of next your from comes Weiser the D.A. Your question. question with with proceed

Linda Bolton Weiser

are How Yes. you? Hi.

Garry Ridge

Hi, Linda. great. am I

Linda Bolton Weiser

Good.

track I like in lifted. last thought when -- sort you like investors we just but knew kind you what in I and I knew that to losing things early am maybe were talking I maybe ask reported but at fact more situation So of analyst they kind and when point here, the looking, I can might be of of we that and April, thought mistaken, the lockdowns the that about China am

-- explain So regard I same that? in back I you I sort kind more don’t could work situation of that just April. with the guess, about changed of what you mean to if for

Garry Ridge

media Those and and been for have But the June we distributors started it’s did of Sure. of you all time, lockdown in and we a that which Steve of what on I our think case subsequently Shanghai started May, locked certainly shutdown it was fact, have of are go our the understood in about, local packages of -- lockdown that all shut of observe Shanghai at it the And time. said ship we work in that early are was the Shanghai or out for I and Asia to of all severity weeks. out shipments don’t it that talking China nearly suspended, Shanghai the operation. and -- it. and a as in during business to long in that we We product go six couldn’t the and -- we could was complete of and ship ship or to down lifted, again. Linda, know whatever. how going not starting probably people was

So it have was that we absolutely and a something anticipated. surprise couldn’t

Linda Bolton Weiser

Okay.

the then bad it how better that sort the through quarter business May, of in trended April, May of is how were and then in kind trend of got really in then and much March So the quarter?

Garry Ridge

Steve, me, I... but I don’t have that in of front

Steve Brass

market I markets, got stock in it’s and will our a so -- ship, the think not -- question So the marketing it certainly increase we able being the for distributor just so had -- of right? to markets. are -- a that we happened, markets able out Asia across in level, of All has local really weren’t had markets. distributed service those to in region was little their we stock the inventory Asia

didn’t the that April we So fully shift that fully will May believe ship the fourth shipments in quarter. in and

very markets. in just from June QX sales move you just a sales will heard distributor So or markets lost QX significantly and shipments about strong and that It reflected revenues any buyers we talk went was increased our of and little. into Asian those very to partially

China Now the of some in that lockdown business. of deferred will

that complete would of will that the loss the closures, in economic been be of business cities, of some period. lack in So factory sold lockdowns because there have from activity, Chinese

Garry Ridge

to would just return and at another Shanghai the week. March, May when On to around add Xth to that they April the Shanghai Linda, about in And normal full City thought XXth continued government the no, the that last of officials. the late said Xth, until announced of by down happened was that about XXth, the kind closed of time half a it lockdown

Linda Bolton Weiser

right. of of was chemical reported, had fiscal per it’s to included and $XXX more side said it All $XXX around on since you barrel some that barrel per things, Thanks. to our barrel. your side thought I mean, then the commodity mean, And or specialty oil the down, hit of $XXX oil I but assumption per year planning last around close you per there, just think guidance I I for $XXX a barrel, now high Okay.

not and seen can me have in resin actually that So just down plastic the situation come -- worse it may just gotten resin plate be prices and and plastic significantly we to and the spot has market. seems have the seen tin

I just surprising planning? am just within what like the it look are guess be that are range gross though margin the seems lowered you a of will I even guidance So wondering commodities like the maybe

Garry Ridge

embedded So, aerosol of in seen number times. one, decrease a in increase, which through and shared of different been have flowing our no cans we We our aerosol cans. had cost that’s XX% we price the

price the whatsoever And even impact is as -- oil cans. I our flow we takes any So real no to of lot and rates the Yes, I of into flow-through moving days fluctuating XX have it oil has shared as has know $XXX. on a aerosol though the as goods cost of the it increases. here of spot timing mean, of issue are the the been have you is, offset between system. of to and $XXX price well, XXX of impacts

weeks back and moved today. in in couple no week went it’s of because impact, over it just yes, it’s last last has So fact, the XXX XX and it to

biggest aerosol of So few scenario in the of the the the that’s impact It’s plastics, oil thing not this had impact is of in last the cost over the the months. of cans, the short-term cost cost a of our varying times timing varying around This at flowing is filling are varying flow impact been which -- fees, places supply world. all into purely and have chain from the -- flow have issue. all

Linda Bolton Weiser

I that kind gross really Okay. fiscal that. be year up in fourth margin implies yet, sequentially haven’t for margin the the but am Thanks my of gross for your run through thinking I think numbers I quarter, correctly? I mean, then, And model the guidance the of would

Garry Ridge

It has two.

Linda Bolton Weiser

Yeah.

Okay.

wanted Just to…

Garry Ridge

Yeah.

Linda Bolton Weiser

about sure make that. …

Garry Ridge

Yeah. Yeah.

Linda Bolton Weiser

new then, important? of And or is and something interesting, call could you be guess, planning something some mentioned that you quite time that product, still I I on remember, of the Okay. that’s with launching, had kind there kind is it were that product maybe a track something that last green on can’t was on that is clean sounded that

Garry Ridge

Yes.

is quality product that, of of once be and product expecting a in -- and upcoming As quarters, to coming. will it’s will and on but that testing, that through very be friendly, details it track about soon I in It still the is product final we excited as seen announce be ESG full it’s we it and as would it. being stages and stability think it’s track is yeah, are on

Linda Bolton Weiser

that. because things different say like of finally, of industrial work And then, and to bunch among retailers you heard distributors are if inventory that but kind to like supply of slowdown down wanting down trying in about and Okay. Are we from a have seeing in of do work kind inventory any they channels, even any demand. various you

Garry Ridge

off Steve, cover do that. on you to want

Steve Brass

Yeah. No.

might strong. I I grow we and We ahead haven’t as, sales yet. seen I last to mean, industrial have reported globally we but continue strongly, of things knows be quarter some where And that very trade are who not basically channels are our were headed, got so mean we

of is XX% industrial have kind this in up still e-commerce, which to year. our and are talked globally We flat about going market the we be

channel it’s the -- We boost of us for from flattened pandemic retail reflecting we DIY and think the of good kind those got that’s but those channels. I and and sales just it’s sales are still kind where e-commerce getting in

We are and continuing around automotive, to grow very world hardware nicely industry. the in

haven’t and in we inventory those no, kind seen control coming yet. of So, measures

Linda Bolton Weiser

then. leave I Okay. there you Thank it much. will very

Garry Ridge

you, Thank Linda.

Operator

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

WD-40 (WDFC) 8 Jul 222022 Q3 Earnings call transcript