Customers stockpiled WD-40 because of price hikes. Its stock is soaring.
Jordan Valinsky, CNN Business
(CNN) — WD-40’s stock is having its best day in more than a decade after it said customers stockpiled the product ahead of a price increase.
The chemical manufacturer reported third quarter-earnings late Tuesday that beat expectations. Sales rose 7% to $114 million for the quarter, which the company said was bolstered by especially strong North American sales as customers stocked up on their grease and cleaning products. The company’s shares are up 10% Wednesday.
WD-40 CEO Garry Ridge said in a release that its North American customers were “buying high volumes of product in advance of our planned price increases in the region.” WD-40 announced it was hiking prices a year ago. It hiked prices predominantly because of rising commodity prices, although steel and aluminum tariffs had raised its canning costs somewhat as well.
Ridge said on a call with analysts that the company doesn’t expect any additional price increases this year. He said that it has felt “some residual impact of tariffs,” but the price increase for its can are “somewhat coincident with the timing of tariffs.”
The company is also promising a rosy future for growth. It anticipates to nearly double its global revenue to $700 million by 2025.
“Our goal under this initiative is to make the blue and yellow can with a little red top available to more people in more places who will find more uses more often,” Ridge said.
Despite today’s gains, the stock is down more than 2% for the year.
In addition to WD-40 lubricant, the company makes a number of household and cleaning products, including 3-in-One, 2000 Flushes, Carpet Fresh, Spot Shot and Lava, among others.