Household products company WD-40 (NASDAQ: WDFC) missed Wall Street’s revenue expectations in Q2 CY2025 as sales only rose 1.2% year on year to $156.9 million. The company’s full-year revenue guidance of $610 million at the midpoint came in 2.7% below analysts’ estimates. Its GAAP profit of $1.54 per share was 10% above analysts’ consensus estimates.

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“Today we reported third quarter net sales of $156.9 million — a new record high for net sales in a quarter — reflecting a modest 1 percent year-over-year increase,” said Steve Brass, president and CEO.

Company Overview

Short for “Water Displacement perfected on the 40th try”, WD-40 (NASDAQ: WDFC) is a renowned American consumer goods company known for its iconic and versatile spray, WD-40 Multi-Use Product.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $612.5 million in revenue over the past 12 months, WD-40 is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with retailers.

As you can see below, WD-40’s sales grew at a mediocre 6.7% compounded annual growth rate over the last three years. This shows it couldn’t generate demand in any major way and is a tough starting point for our analysis.

This quarter, WD-40’s revenue grew by 1.2% year on year to $156.9 million, falling short of Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 6.3% over the next 12 months, similar to its three-year rate. This projection is above average for the sector and implies its newer products will help maintain its historical top-line performance.

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Cash Is King

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

WD-40 has shown terrific cash profitability, driven by its lucrative business model that enables it to reinvest, return capital to investors, and stay ahead of the competition. The company’s free cash flow margin was among the best in the consumer staples sector, averaging 15.4% over the last two years.

Taking a step back, we can see that WD-40’s margin dropped by 4.5 percentage points over the last year. If its declines continue, it could signal increasing investment needs and capital intensity.

WD-40’s free cash flow clocked in at $33.95 million in Q2, equivalent to a 21.6% margin. This result was good as its margin was 9.6 percentage points higher than in the same quarter last year. Its cash profitability was also above its two-year level, and we hope the company can build on this trend.

Key Takeaways from WD-40’s Q2 Results

It was encouraging to see WD-40 beat analysts’ gross margin, EPS, and EBITDA expectations this quarter. On the other hand, its revenue missed along with its full-year revenue and EPS guidance. Overall, this quarter could have been better. The stock traded up 1.5% to $228.70 immediately following the results.

So do we think WD-40 is an attractive buy at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.