WD-40 (NASDAQ:WDFC) stock climbed Friday morning, after the firm reported Q2 results that topped Street view. Q2 revenue grew 16.2%, with net sales in the Americas rising 18% due to a 26% increase in maintenance product sales in the U.S. and price hikes.
Higher maintenance product sales were a result of greater product availability owing to adjustments WDFC made to its supply chain to increase production capacity of its highest volume products.
Net sales of maintenance products - WDFC's biggest business - grew 19%, owing to higher sales of WD-40 Multi-Use Product and WD-40 Specialist driven by increased product availability and price hikes. WDFC lowered its guidance for 2022 EPS and gross margin, citing inflationary pressures.
However, WDFC maintained its net sales outlook. 2022 EPS is expected to be $5.14-5.27 and gross margin is projected to be 50-51%.
This week, DA Davidson downgraded shares to Underperform from Neutral with a $157 price target, slashed from $238, warning that higher cost pressures could lead to reduced FY 2022 earnings guidance.
Other news involving WDFC: Garry Ridge will retire as CEO on Aug. 31. Steve Brass, who served as president and COO since 2019, has been appointed as Ridge's successor, effective Sept. 1.
Brass has also been appointed to serve on WDFC's board, effective Mar. 15. Ridge will continue to serve as chairman of the board until WDFC's annual stockholder meeting on Dec. 13, when his term expires.
WDFC shares jumped $20.54, or 11.8%, to $195.05.
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