Q4 2025 WD-40 Co Earnings Call
Fiscal year 2025 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.
To register a question at any time during this call. Please press Star then the number one on your telephone keypad.
Please make sure your mute function is turned off to allow your signal to reach our equipment.
If at any time during the conference you need to reach an operator, Please press star zero on your telephone keypad.
I would like to turn the presentation over to our host for today's call Wendy Kelley, Vice President stakeholder and Investor engagement.
Proceed.
Thank you good afternoon, and thanks to everyone for joining us today on our call today are WD 40, company's President and Chief Executive Officer, Steve Brass, and Vice President and Chief Financial Officer, Sarah Heizer.
In addition to the financial information presented on today's call. We encourage investors to review our earnings presentation earnings press release and Form 10-K for the period ending August 31 2025.
These documents will be made available on our Investor Relations website at Investor that WD 40 company Dot com.
A replay and transcript of today's call will also be made available shortly after this call.
On today's call, we will discuss certain non-GAAP measures.
Triptans and reconciliations of these non-GAAP measures are available in our SEC filings as well as the earnings documents posted on our Investor Relations website.
As a reminder, today's call includes forward looking statements about our expectations for the company's future performance.
Actual results could differ materially.
The company's expectations beliefs, and projections are expressed in good faith, but there can be no assurance that they will be achieved or accomplished please.
Refer to the risk factors detailed in our SEC filings for further discussion.
Finally for anyone listening to a webcast replay or reviewing a written transcript of this call. Please note that all information presented is current only as of today's date October 22nd.
2025.
The company disclaims any duty or obligation to update any forward looking information as a result of new information future events or otherwise.
With that I'd now like to turn the call over to Steve.
Thank you Wendy and thanks to all of you for joining us this afternoon.
Fiscal year 2025 was marked by complexity and resilience.
You are navigating global headwinds, while making strategic progress.
Despite challenges ranging from geopolitical pensions to shifting economic policies.
<unk> 40 company sees opportunities and continue to build on the strong foundation that has supported our success more than 72 years.
Because I always thought it was gonna.
A review of our sales results for the fourth quarter and full fiscal year 2025, and then provide an update on the progress we've made against our four by four strategic framework.
Sarah will dive deeper into our financial performance review, our business model give an update on the divestiture of our homecare and cleaning businesses.
Our outlook for fiscal year 2026.
After that we'll open the floor for your questions.
Today, we reported consolidated net sales of $163 million for the fourth quarter from $620 million for the full fiscal year, each reflecting approximately 5% growth compared to the prior year.
This performance represented a record quarter for the company and underscore the continued strength of our brand and the resilience of our business.
As you know maintenance products remain our primary strategic focus accounting for approximately 95% of total net sales in both the fourth quarter and the full fiscal year.
Net sales for these products reached $156 million in Q4, and $591 million for the year, reflecting a 6% year over year increase.
This performance is consistent with our long term growth target of mid to high single digits and reinforces the strength of our core business.
In addition, I am pleased to report that our gross margin continues to improve.
Now surpassed our target of 55%.
For the full fiscal year, we delivered a gross margin of 55, 1%.
Gross margin would have been 55, 6%, if we removed the financial impact of the assets held for sale.
Speaker #1: Over
Speaker #1: Are adjusted . EBITDA was 30.5 million , up 16% from the same period last year . Our adjusted EBITDA margin this quarter was 18% compared to 17% in the same period last year .
Speaker #1: $20 million for the full fiscal year, each reflecting approximately 5% growth compared to the prior year. This performance represented a record quarter for the company and underscores the continued strength of our brand and the resilience of our business.
Speaker #1: . These include
Speaker #1: supply chain
Speaker #1: cost
Speaker #1: projects
Speaker #1: , cost
Speaker #1: optimization
Speaker #1: efforts ,
For the fourth quarter, we delivered a gross margin of 54, 7% an impressive 730 basis points improvement from the fourth quarter of fiscal year 2021, when we hit our inflection point in our long term gross margin recovery plan began to take hold.
Speaker #1: progress
Speaker #1: on reduction asset
Speaker #1: divestitures
Speaker #1: , new divestitures product
Speaker #1: introductions
Speaker #1: , premiumization
Speaker #1: strategies , divestiture and
Speaker #1: For the full fiscal year , our adjusted EBITDA was 114.4 million , up 8% from the same period last year . Adjusted EBITDA margin this year was 18% , which is the same as last year .
Speaker #1: geographic
Speaker #1: expansion .
Speaker #1: Each of these levers
Speaker #1: contributes
Speaker #1: As you know , maintenance products remain our primary strategic focus , accounting for approximately 95% of total net sales in both the fourth quarter and the full fiscal year .
Speaker #1: positively to gross margin
Speaker #1: and geographic expansion
Speaker #1: reinforces our
Speaker #1: confidence
Speaker #1: in its long term
Speaker #1: . Backed by
Speaker #1: our current
Speaker #1: performance
Speaker #1: and strategic
Speaker #1: initiatives , we're
So we'll share more details about gross margin in just a few minutes.
Speaker #1: confident in our
Speaker #1: ability to
Speaker #1: sustain growth
Speaker #1: Now let's turn to other key measures of our financial performance . Operating income . Net income and earnings per share in the fourth quarter , operating income improved to 28 million in the fourth quarter , an increase of 17% over the prior period .
Speaker #1: Net sales for these products reached $156 million in Q4 , and $591 million for the year . Reflecting a 6% year over year increase .
Speaker #1: margin
Speaker #1: above
Speaker #1: 55% in
Speaker #1: fiscal
Speaker #1: year 2026 .
Now, let's talk about fourth quarter sales results in dollars by segment, starting with the Americas.
Speaker #1: In addition , gross
Speaker #1: margin
Speaker #1: remains a
Speaker #1: for senior
Speaker #1: who
Unless otherwise noted I will discuss net sales on a reported basis compared to the fourth quarter of last fiscal year.
Speaker #1: be
Speaker #1: incentivized
Speaker #1: to drive further
Speaker #1: This performance is consistent with our long term growth target of mid to high single digits , and reinforces the strength of our core business .
Speaker #1: improvement
Speaker #1: . Now , turning
Speaker #1: to our .
Speaker #1: cost of Now
Speaker #1: doing turning to
Speaker #1: business , which
Speaker #1: we define
Speaker #1: Net income improved to 21.2 million in the fourth quarter , an increase of 27% compared to the prior period . Diluted earnings per common share for the quarter were $1.56 , compared to $1.23 in the prior period , reflecting an increase of 27% over the prior period .
Sales in the Americas, which includes the United States, Latin America, and Canada decreased 2% until $1 7 million to $77 million compared to last year.
Speaker #1: as total
Speaker #1: operating
Speaker #1: expenses , less adjustments
Speaker #1: for certain
Speaker #1: In addition , I'm pleased to report that our gross margin continues to improve and has now surpassed our target of 55% for the full fiscal year .
Speaker #1: non-cash
Speaker #1: expenses
Speaker #1: . Our cost of
Speaker #1: doing business is
Speaker #1: primarily .
Speaker #1: driven by three key
Speaker #1: areas
Speaker #1: investments in our people
And reported currency sales of maintenance products decreased 2% or $1 2 million to $74 million compared to last year. The.
Speaker #1: We delivered a gross margin of 55.1% . Gross margin would have been 55.6% . If we remove the financial impact of the assets held for sale .
Speaker #1: building
Speaker #1: efforts
Speaker #1: expenses associated
Speaker #1: products to our customers . In the fourth quarter , our cost of strategic
Speaker #1: Our diluted EPs reflects 13.6 million weighted average shares outstanding . Now , let's review our balance sheet and capital allocation strategy . We maintain a strong financial position and liquidity , enabling a disciplined capital allocation approach that both fuels long term growth and generates significant value for our stockholders .
The decline was primarily driven by lower sales in Latin America influenced by the impacts of foreign currency exchange fluctuations the timing of customer orders and broader macroeconomic challenges, especially in Mexico.
Speaker #1: business
Speaker #1: was 36% ,
Speaker #1: compared
Speaker #1: to
Speaker #1: 38% in the quarter , prior year
Speaker #1: For the fourth quarter , we delivered a gross margin of 54.7% , an impressive 730 basis point improvement from the fourth quarter of fiscal year 2021 , when we hit our inflection point and our long term gross margin recovery plan began to take hold .
Speaker #1: quarter . In dollar terms , our
Speaker #1: cost of 36% doing
Speaker #1: business remained
Speaker #1: stable . Period over
Speaker #1: period
Speaker #1: full
Speaker #1: fiscal relatively year .
Speaker #1: Cost of doing
Speaker #1: business
Sales of maintenance products in the United States and Canada were also down slightly primarily due to the timing of customer orders and in Canada broader macroeconomic challenges.
Speaker #1: was
Speaker #1: 37% , Business
Speaker #1: compared with
Speaker #1: to
Speaker #1: 36% last
Speaker #1: year
Speaker #1: . In 36% . dollar terms , our
Speaker #1: cost of
Speaker #1: doing
Speaker #1: business
Speaker #1: increased
Speaker #1: 19 million or 9% period
Speaker #1: Maintaining a disciplined and balanced capital allocation approach remains the priority for us for the foreseeable future . We expect CapEx of between 1 and 2% of sales per fiscal year , which is in line with our asset light strategy .
Speaker #1: over
Speaker #1: period 9% of
Speaker #1: Sarah will share more details about gross margin in just a few minutes . Now , let's talk about fourth quarter sales results in dollars by segment .
Speaker #1: .
In the Americas, so the ability for the specialist remained constant.
Speaker #1: In the increased 19 million , fourth quarter ,
Speaker #1: advertising and or
Speaker #1: promotion 9% period
Speaker #1: expenses
Speaker #1: increased $1.6 million ,
The same period last year.
Speaker #1: or increased
Speaker #1: 15% period over
Okay, and cleaning products sales declined $600000 compared to last year, reflecting our strategic shift towards higher margin maintenance products.
Speaker #1: period
Speaker #1: Starting with the Americas, unless otherwise noted, I will discuss net sales on a reported basis compared to the fourth quarter of last fiscal year.
Speaker #1: . As a percentage
Speaker #1: of net
Speaker #1: A&P
Speaker #1: was
Speaker #1: 7.6% this was 7.2 . quarter
Speaker #1: ,
Speaker #1: compared to
Speaker #1: Our cash flow from operations this quarter was 30 million , and we elected to use approximately 9.5 million of that cash to pay down a portion of our short term higher interest rate borrowings .
Speaker #1: 7% in the same period last
<unk> with our four by four strategic framework.
Speaker #1: year
Speaker #1: . The
Speaker #1: phasing of
In total our Americas segment made up 47% of our global business in the fourth quarter.
Speaker #1: A&P
Speaker #1: Sales in the Americas , which include the United States , Latin America and Canada , decreased 2% , or 1.7 million , to 77 million , compared to last year and reported currency sales of maintenance products decreased 2% , or 1.2 million , to 74 million , compared to last year .
Speaker #1: are not evenly
Speaker #1: distributed
Speaker #1: over the course
Speaker #1: year , and
Speaker #1: in
Speaker #1: recent
Speaker #1: years , our
Speaker #1: brand are not building
Speaker #1: activities have
For the full fiscal year maintenance product sales in the Americas totaled 277 million, reflecting a 4% increase compared to the prior year.
Speaker #1: been more heavily
Speaker #1: Although our usual target for debt to adjusted EBITDA is 1 to 2 times . We are currently slightly below that range . This provides us with strategic flexibility as we explore opportunities to return capital to stockholders and drive long term growth .
Speaker #1: weighted .
Speaker #1: In
Speaker #1: the
Speaker #1: second half of the
Speaker #1: year
Speaker #1: . For the full
Speaker #1: our AMC
Speaker #1: investment weighted
Speaker #1: remained
Speaker #1: within
Speaker #1: our
Speaker #1: annual
Speaker #1: expectations
Although this growth was slightly below our long term target of 5% to 8% annual growth. The region. We remain confident in the trade blocks long term growth potential.
Speaker #1: , while our long
Speaker #1: to
Speaker #1: manage costs of
Speaker #1: doing Manage
Speaker #1: within
Speaker #1: the
Speaker #1: The decline was primarily driven by lower sales in Latin America , influenced by the impacts of foreign currency exchange fluctuations . The timing of customer orders , and broader macroeconomic challenges , especially in Mexico .
Speaker #1: 30 to 35% range . We
Speaker #1: make thoughtful ,
Speaker #1: We continue to return capital to our stockholders through regular dividends and buybacks . Annual dividends will continue to be our priority , and our targeted at greater than 50% of earnings on October 9th , our board of directors approved a quarterly cash dividend of $0.94 per share .
Speaker #1: strategic
Speaker #1: investments to support long
Speaker #1: term 30 to 35% range
Now, let's take a look at sales of $9 million, which includes Europe, India Middle East and Africa.
Speaker #1: . WD
Speaker #1: 40 company has long
Speaker #1: been
Speaker #1: committed
Speaker #1: to
Speaker #1: operating with
Speaker #1: disciplined and efficiency
Speaker #1: , a
Speaker #1: commitment
Total sales grew 7% to $4 1 million to $63 million compared to last year.
Speaker #1: reflected in
Speaker #1: Sales of maintenance products in the United States and Canada were also down slightly , primarily due to the timing of customer orders , and in Canada , broader macro challenges .
Speaker #1: our ability to
Speaker #1: manage the
Speaker #1: business .
Speaker #1: With just
Speaker #1: 714 employees .
Speaker #1: Each
After adjusting for the impact of foreign currency translation on our net sales were unchanged from the same quarter last year.
Speaker #1: approximately
Speaker #1: $860,000 in and revenue
Speaker #1: During fiscal year 2025 , we repurchased approximately 50,000 shares of stock at a total cost of 12.3 million . Under our share repurchase plan .
Speaker #1: . This level of productivity
Speaker #1: The new sales of W40 specialist remained constant compared to the same period last year . Homecare and cleaning product sales declined $600,000 compared to last year , reflecting our strategic shift toward higher margin maintenance products in alignment with our 4x4 strategic framework .
Speaker #1: speaks volumes
And reported currency sales of maintenance products increased 8% to $4 6 million to $60 7 million compared to last year.
Speaker #1: about the strength
Speaker #1: of our
Speaker #1: culture ,
Speaker #1: the
Speaker #1: effectiveness of
Speaker #1: our operating
Speaker #1: model , the
Speaker #1: awareness of our
Speaker #1: brand , and
Speaker #1: We have approximately $30 million remaining under our current repurchase plan , which is set to expire at the end of this fiscal year .
Speaker #1: the
Speaker #1: value we
Speaker #1: deliver
Speaker #1: across and the our
Speaker #1: footprint
Strong growth was driven most significantly by higher sales volumes at <unk> 40, multi use product.
Speaker #1: What continues to
Speaker #1: evolve is
Speaker #1: our need to
Speaker #1: operate as a global
Speaker #1: business .
Speaker #1: Looking ahead , we intend to accelerate our buyback activity and fully utilize the remaining authorization , underscoring our strong conviction in the long term .
S markets.
Speaker #1: And
Speaker #1: increasingly
Speaker #1: complex
Sales increased most significantly in.
Speaker #1: and
Speaker #1: uncertain environment
Speaker #1: In total , our Americas segment made up 47% of our global business . In the fourth quarter . For the full fiscal year , maintenance , product sales in the Americas totaled 277 million , reflecting a 4% increase compared to the prior year .
France, and Benelux, which were up 20%, 19% and 23% respectively.
Speaker #1: reduce
Speaker #1: risk
Speaker #1: and drive to
Speaker #1: top line growth . We've
Speaker #1: implemented a
Speaker #1: number of We've
Speaker #1: structural implemented a
Speaker #1: changes number to
Speaker #1: Fundamentals of the business . We're focused on accretive capital returns that reflect our confidence in the long term value of our stock in fiscal year 2025 , excluding the positive impact of the one time non-cash income tax adjustment .
Speaker #1: in reduce
Speaker #1: recent years to
Speaker #1: strengthen and sustain
Speaker #1: our
Speaker #1: business for
Strong sales in our direct markets were offset by softer performance in our EMEA distributor markets driven by the timing of customer orders and ongoing instability in certain regions.
Speaker #1: the future
Speaker #1: . We're
Speaker #1: investing
Speaker #1: with strengthen discipline
Speaker #1: technology
Speaker #1: , sustainability
Speaker #1: , innovation , research and
Speaker #1: Although this growth was slightly below our long term target of 5 to 8% . Annual growth for the region . We remain confident in the trade blocs long term growth potential .
Speaker #1: development , legal
Speaker #1: , risk
Speaker #1: management
Speaker #1: , brand building
EMEA ourselves at <unk> with respect to this increased 18% compared to last year, driven primarily by increased demand and higher volumes across several direct markets, especially in tech confronts with targeted promotional activity with key customers proved highly effective.
Speaker #1: to
Speaker #1: strengthen
Speaker #1: foundation
Speaker #1: Our return on invested capital was 26.9%, improving from 25.5% last fiscal year and ahead of our target of 25% in September. We announced the sale of our 1001 and 1001 Carpet Fresh brands in the U.K.
Speaker #1: brand
Speaker #1: awareness and
Speaker #1: ensure long
Speaker #1: resilience and
Speaker #1: growth
Speaker #1: . We
Speaker #1: Now let's take a look at sales in Amia , which includes Europe , India , the Middle East and Africa . Total sales grew 7% , or 4.1 million , to 63 million , compared to last year .
Speaker #1: also need time
Speaker #1: to
Speaker #1: loss of
Speaker #1: revenues
Speaker #1: associated with
Speaker #1: the home
Speaker #1: care and associated with the
Speaker #1: cleaning
Speaker #1: divestitures
Speaker #1: . These
Speaker #1: investments
Speaker #1: have
Speaker #1: pushed
Speaker #1: our cost of doing
Speaker #1: business
Speaker #1: above our divestiture
Homecare and cleaning products sales declined approximately 500000 compared to the same period last year.
Speaker #1: target
Speaker #1: range
Speaker #1: . However ,
Speaker #1: believe
Speaker #1: After adjusting for the impact of foreign currency translation on net sales were unchanged from the same quarter last year and reported currency sales of maintenance products increased 8% , or 4.6 million , to 60.7 million , compared to last year .
Speaker #1: they've
Speaker #1: strengthened the believe business
Speaker #1: to Supreme Imports Limited , a Manchester based consumer products company . The all cash transaction , valued at up to $7.5 million , was completed in the fourth quarter of fiscal year 2025 .
Speaker #1: , enhanced its
Speaker #1: resilience and
Speaker #1: positioned
Speaker #1: deliver
In the fourth quarter, we completed the divestiture of our U K homecare and cleaning product businesses.
Speaker #1: sustainable
Speaker #1: long term value to
Speaker #1: stakeholders
Speaker #1: . Turning
Speaker #1: now to
Speaker #1: adjusted EBITDA
<unk> limited <unk>.
Speaker #1: margin
Speaker #1: . We believe
This strategic move allows us to sharpen our focus on higher growth higher margin maintenance products and marine.
Speaker #1: EBITDA
Speaker #1: percentage of
Speaker #1: WD-40 Company is providing limited transition services for up to three months. This divestiture reflects our continued focus on optimizing our portfolio and directing resources toward areas that drive long-term value.
Speaker #1: sales is a
Speaker #1: The strong growth has driven most significantly by higher sales volumes of WD 40 Multi-Use product in our direct markets , sales increased most significantly in Dach France and Benelux , which were up 20% , 19% and 23% respectively .
Speaker #1: valuable
Speaker #1: metric for
Speaker #1: profitability
Speaker #1: operational
<unk> is our commitment to grow in the blue and yellow brand with the little Red top.
Speaker #1: efficiency
Speaker #1: . It reflects
Speaker #1: our operating
Speaker #1: performance and cash
In total our EMEA segment made up 38% of our global business in the fourth quarter.
Speaker #1: , providing the
Speaker #1: clearest view operating of our
Speaker #1: company's underlying
Speaker #1: health
Speaker #1: We continue to make progress on the sale of our Americas home care and cleaning product brand. Our investment bank continues active discussions with multiple potential buyers.
For the full fiscal year maintenance product sales totaled $230 million, a 9% increase compared to the prior year. This growth aligns with our long term target of 8% to 11% annual growth.
Speaker #1: Strong sales in our direct markets were offset by softer performance in our EMIA distributor markets, driven by the timing of customer orders and ongoing instability in certain regions.
Speaker #1: Although there is no certainty of a deal, we remain optimistic, and I will provide further updates as appropriate. Now, moving to FY26 guidance.
Now turning to Asia Pacific sales in Asia Pacific, which includes Australia, China and other countries in the Asia region grew 28% or $5 1 million to $23 million compared to last year.
Speaker #1: In EMEA , sales of W40 specialist increased 18% compared to last year , driven primarily by increased demand and higher volumes across several direct markets , especially in Dach and France , where targeted promotional activity with key customers proved highly effective .
Speaker #1: Given the anticipated divestiture of our Americas Home Care and cleaning brands , we are continuing to present this year's guidance on a pro forma basis .
Foreign currency translation had no material impact on our fourth quarter results.
Speaker #1: Excluding the financial impact of the assets held for sale, we're also providing a pro forma view of fiscal year 2025, excluding the brands we divested in the U.K.
Speaker #1: Home care and cleaning product sales declined approximately 500,000 compared to the same period last year . In the fourth quarter , we completed the divestiture of our U.K.
Sales of maintenance products increased 30% to $4 8 million to $21 million compared to last year.
This growth was primarily driven by a 44% increase in sales under the 40 multi use product in our Asia distributor markets, where we saw strong demand across nearly all countries, particularly in Indonesia, Malaysia, Singapore, and the Philippines fueled by geographic expansion grow the distribution and the timing of.
Speaker #1: in the fourth quarter , the brands currently held for sale and the impact of the one time tax benefit recorded in the second quarter to help with modeling and period over period comparisons .
Speaker #1: Home care and cleaning product businesses to Supreme Imports Limited. The strategic move allows us to sharpen our focus on higher growth, higher margin maintenance products and reinforces our commitment to growing the blue and yellow brand for the little red top.
Speaker #1: Please refer to our fourth quarter and full year earnings presentation on our Investor Relations website . For those details . Now , with that backdrop , let's take a closer look at our guidance for fiscal year 2026 .
Speaker #1: In total , RNA segment made up 38% of our global business in the fourth quarter . For the full fiscal year , maintenance , product sales totaled $230 million , and 9% increase compared to the prior year .
Customer orders.
Maintenance products also grew in Australia, and China, increasing by 12% and 6% respectively compared to the same period last year.
Speaker #1: We're excited about what lies ahead in fiscal year 2026. By balancing strong performance today with thoughtful investments for tomorrow, we're building a foundation for lasting growth and long-term value creation for fiscal year 2026.
In Asia Pacific sales of WD, 40, specialist increased 38% compared to last year due to higher sales volume from successful promotions and marketing efforts in our Asia distributor markets in China.
Speaker #1: This growth aligned with our long term target of 8 to 11% annual growth . Now , turning to Asia Pacific sales in Asia Pacific , which includes Australia , China and other countries in the Asia region , grew 28% , or 5.1 million , to 23 million , compared to last year .
Speaker #1: We expect net sales growth from the pro forma 2025 results . Is projected to be between 5 and 9% , with net sales between 630 and 655 million .
Sales of our homecare and cleaning products I'll note that carpet cleaners and sulfur handling is sold in Australia increased 15% or approximately $300000 compared to the same period last year.
Speaker #1: Foreign currency translation had no material impact on our fourth quarter results . Sales of maintenance products increased 30% , or 4.8 million , to 21 million , compared to last year .
Speaker #1: After adjusting for foreign currency impacts, gross margin is expected to be between 55.5% and 56.5%. Advertising and promotion investment is projected to be around 6% of net sales.
Our home care portfolio in Australia benefits and strong brand recognition.
<unk> competitive position and meaningful growth opportunities.
Speaker #1: This growth was primarily driven by a 44% increase in sales and WD 40 Multi-Use product in our Asia distributor markets , where we saw strong demand across nearly all countries , particularly in Indonesia , Malaysia , Singapore and the Philippines .
In total our Asia Pacific segment made up 15% of our global business in the fourth quarter.
Speaker #1: Operating income is expected to be between $103 million and $110 million, representing growth of between 5% and 12% from the pro forma 2025 results.
For the full fiscal year in maintenance product sales in Asia Pacific because of the $84 million, a 6% increase compared to the prior year. While this growth falls short of our long term target of 10% to 13% annual growth. The region. We remain confident in the strong fundamentals of this high growth playbook.
Speaker #1: Fueled by geographic expansion , broader distribution , and the timing of customer orders , sales of maintenance products also grew in Australia and China , increasing by 12% and 6% , respectively , compared to the same period last year in Asia Pacific , sales of W40 specialists increased 38% compared to last year due to higher sales volume from successful promotions and marketing efforts in our Asia .
Speaker #1: The provision for income tax is expected to be between 22.5% and 23.5%, and diluted earnings per share is expected to be between $5.75 and $6.15, which is based on an estimated 13.4 million weighted average shares outstanding.
Now, let's take a look at the strategic progress we made in fiscal year 2025 against our four by four strategic framework as you'll recall. This framework was designed to drive profitable growth and sustainable value creation and is built around our foremost win battles.
Speaker #1: This range represents growth of between 5 and 12% over the pro forma 2025 results . This guidance assumes no major changes to the current economic environment .
Speaker #1: Distributor markets . In China , sales of home care and cleaning products are Novak Carpet Cleaners and solvent hand cleaners sold in Australia .
Our strategic enablers.
I must win battles focus on what we do to increase sales and profitability. Since these are long term growth drivers will focus on full year results.
Speaker #1: Increased 15%, or approximately $300,000, compared to the same period last year. Our home care portfolio in Australia benefits from strong brand recognition, a solid competitive position, and meaningful growth opportunities.
Starting with must win Battle number one lead geographic expansion global sales of WD 40, multi use product in fiscal year 'twenty five for $478 million representing growth of 6% over the prior year.
Speaker #1: In total , our Asia Pacific segment made up 15% of our global business in the fourth quarter . For the full fiscal year , Maintenance , product sales in Asia Pacific totaled 84 million , a 6% increase compared to the prior year .
Experienced solid sales about signature multi use product brand.
III trade blocks with 8% growth in our EMEA, 4% growth in the Americas, and 6% growth in Asia Pacific.
We saw solid sales growth this year, 12% in Latin America, 10% in China, 14% and friends and 20% in India. What's most important to emphasize that we still have significant room to grow.
Speaker #1: While this growth fall short of our long term target of 10 to 13% , annual growth for the region , remain confident in the strong fundamentals of this high growth trade bloc .
Speaker #1: Now, let's take a look at the strategic progress we made in fiscal year 2025 against our 4x4 strategic framework. As you recall, this framework was designed to drive profitable growth and sustainable value creation and is built around our formal battles.
Graphic expansion is our most significant long term growth opportunity.
Nevertheless, five years, we've achieved a compound annual growth rate in net sales of WD 40, multi use product of nine 4%.
Path forward is clear, we're expanding availability across more channels and geographies, while deepening product penetration by increasing brand awareness through sampling and putting more cans in the hands of our users around the world.
Speaker #1: And strategic enablers and focus on what we do to increase sales and profitability . Since these our long term growth drivers will focus on full year results starting with number one geographic expansion , global sales of WD 40 Multi-Use products in fiscal year 25 were 478 million , representing growth of 6% over the prior year .
We estimate the global attainable market Adobe fully multi use product to be approximately $1 9 billion.
Based on our updated benchmark sales potential and to date, we've achieved only 25% of our benchmark growth potential Nathan the growth opportunity of approximately $1 4 billion.
Speaker #1: We experienced solid sales of our signature multi-use product brand in all three trade blocs , with 8% growth in EMEA , 4% growth in the Americas and 6% growth in Asia Pacific .
Ah.
Second must win battle is accelerating premium amortization.
Speaker #1: We saw solid sales growth this year: 12% in Latin America, 10% in China, 14% in France, and 20% in India.
<unk> is at the core of the strategy, we developed products like smart straw EZ reach with our end users at the center of every decision that needs to drive our product development efforts, enabling us to deliver high performance solutions that solve real world problems.
Speaker #1: What's most important to emphasize is that we still have significant room to grow . Geographic expansion is our most significant long term growth opportunity over the last five years , we've achieved the compound annual growth rate and net sales of WD 40 Multi-Use product of 9.4% , up as forward is clear , we're expanding availability across more channels and geographies while deepening product penetration by increasing brand awareness through sampling and putting more cans in the hands of end users around the world .
If end user focused innovation process brand loyalty and contributes to gross margin expansion and differentiated offerings.
In fiscal year, 'twenty fine global sales of smart straw EZ reach when combined were up 7% over the prior year.
Premium <unk> products currently account for approximately 50% to be 40, multi use product sales and 40% of units sold leaving considerable room for continued growth.
Speaker #1: We estimate the global attainable market for the W40 Multi-Use product to be approximately $1.9 billion. Based on our updated benchmark sales potential, to date, we've achieved only 25% of our benchmark growth potential, leaving a growth opportunity of approximately $1.4 billion.
Over the last five years, we've achieved a compound annual growth rate to net sales of premium products at nine 4%.
On a go forward basis, we'll be targeting a compound annual growth rate in net sales with premium format products with greater than 10%.
A third must win battle is to drive growth and to be fully specialist. This product line is a strategic extension of our trusted cool brand designed to meet the evolving needs of professionals and industrial uses.
Speaker #1: Our second must win battle is accelerating Premiumization innovation is at the core of this strategy . We develop products like smart and easy reach with our end users at the center of every decision .
Let me introduce the B 40 specialist alongside to be fully multi use product were not just adding variety and a strengthening our brand capturing new segments and offering end users more choice without diluting what makes our core brands are iconic.
Speaker #1: That needs drive , our product development efforts , enabling us to deliver high performance solutions that solve real world problems . This end user focused innovation fosters brand loyalty and contributes to gross margin expansion and differentiated offerings .
By leveraging the strength of Adobe 40 brand, but driving category leadership and expanding market share in adjacent segments.
Speaker #1: In fiscal year 25 , global sales of Smart Straw and Easy Reach , when combined were up 7% over the prior year . Premium products currently account for approximately 50% of W40 multi-use product sales , and 40% of units sold , leaving considerable room for continued growth .
In fiscal year 'twenty five global sales of WD 40 specialist products for $82 million of 11% over the prior year.
Once again, we saw growth in <unk> products across all three trade blocks with growth of 6% in the Americas, 15% in our EMEA and 12% in Asia Pacific.
Speaker #1: Over the last five years , we've achieved a compound annual growth rate for net sales of premium products of 9.4% on a go forward basis , we'll be targeting a compound annual growth rate for net sales of premium format products of greater than 10% .
The last five years, we've achieved a compound annual growth rate from net sales of WD 40 specialist.
The 14, 4%.
On a go forward basis will be to our 10 year compound annual growth rate for net sales of WD 40 specialist of greater than 10%.
Speaker #1: Our third must win battle is to drive growth in 40 specialist . This product line is a strategic extension of our trusted core brand , designed to meet the evolving needs of professionals and industrial users .
Specifically 40 specialists has matured and its market base has expanded we've recalibrated, our long term growth expectations to reflect the product lines evolution with in its lifecycle.
Speaker #1: When we introduced a 40 specialist alongside W40 Multi-Use product, we're not just adding variety; we're strengthening our brand, capturing new segments, and offering end users more choice without diluting what makes our core brand iconic.
Estimate the global attainable market WD 40 specialist will be approximately $665 million based on our updated benchmark sales potential.
Date was achieved only 12% of our benchmark growth potential, leaving a growth opportunity for approximately $593 million.
Speaker #1: By leveraging the strength of the W40 brand for driving category leadership and expanding market share in adjacent segments . In fiscal year 25 , global sales of WD 40 specialist products were 82 million , up 11% over the prior year .
Okay.
Fourth and finally, the must win battle is to accelerate digital commerce, our digital commerce strategy is a catalyst for growth across the business not nearly of channels to online sales plays a vital role in advancing each of our must win battles by increasing brand visibility improving accessibility and driving deeper engagement with end users across.
Speaker #1: Once again , we saw growth of WD 40 specialist products across all three trade blocks , with growth of 6% in the Americas , 15% in EMEA and 12% in Asia-Pacific over the last five years , we've achieved a compound annual growth rate of net sales of W40 specialists for 14.4% on a go forward basis .
Global markets.
In fiscal year, 'twenty five e-commerce sales increased 10%, reflecting strong momentum in our digital strategy.
Speaker #1: We'll be targeting a compound annual growth rate for net sales of W40 specialist of greater than 10% . As W40 specialist has matured and its market base has expanded .
<unk> more than a transactional platform is a powerful engine for brand building and education.
For example, the digital space serves as a dynamic environment for product discovery.
Speaker #1: We've recalibrated our long term growth expectations to reflect the product lines evolution within its life cycle . We estimate the global attainable market for W40 specialist would be approximately 665 million , based on our updated benchmark sales potential , and to date , we've achieved only 12% of our benchmark growth potential , leaving a growth opportunity for approximately $583 million .
It allows us to showcase new applications for our products are fostering peer to peer learning plenty of these insights originate from our end users themselves to continually uncover innovative ways to use our products of men ways, we hadn't imagined.
By leveraging digital touch points with deepen engagement enhancing products understanding and strengthening brand affinity across the globe.
Turning to the second element of our four by four strategic framework, our strategic enablers.
Speaker #1: Our fourth and final must win is to accelerate digital commerce by digital commerce . Strategy is a catalyst for growth across the business , not merely a channel for online sales .
<unk> enable us focus in operational excellence and they collectively underpin and drive the success of our must win battles.
Speaker #1: It plays a vital role in advancing each of our Muslim battles by increasing brand visibility, improving accessibility, and driving deeper engagement with end users across global markets.
Strategic initiative number one is ensuring that people first mindset at WD 40 company. Our most powerful competitive advantage is the commitment of our 714 employees. We've long said we are a purpose driven values guide you to organization and that's not just a tagline.
Speaker #1: In fiscal year 25 , e-commerce sales increased 10% , reflecting strong momentum in our digital strategy . But digital is more than a transactional platform .
Our values are the foundation of our culture.
Speaker #1: It's a powerful engine for brand building and education. For example, the digital space serves as a dynamic environment for product discovery.
Have we lead how we collaborate and how we make decisions every day.
February 2025 global engagement survey, 94% of our people reported being engaged in their work more than four times Gallagher global average of 21%.
Speaker #1: It allows us to showcase new applications for our products while fostering peer to peer learning . Many of these insights originate from our end users themselves , who continually uncover innovative ways to use our products , often in ways we hadn't imagined by leveraging digital touchpoints , we're deepening engagement , enhancing product understanding and strengthening brand affinity across the globe .
90% said, they feel a strong sense of belonging to 95% expressed pride in our purpose mission and values.
This deep connection to who we are and what we stand for will translate directly into growth and opportunity nearly 40% of our people experience career progression within the first five years of the company.
Speaker #1: Turning to the second element of our 4x4 strategic framework strategic enablers and enablers focus on operational excellence , and they collectively underpin and drive the success of our Muslim battles .
To our employees. Thank you for consistently showing what it means to live our purpose to create positive lasting memories and everything you do for <unk>.
Speaker #1: Strategic enabler . Number one is ensuring that people first mindset . A company , our most powerful competitive advantage is the commitment of our 714 employees .
Our investors and stakeholders C&I performance is a direct reflection of your commitment to doing meaningful work the right way.
Speaker #1: We've long said we're a purpose driven , values guided organization , and that's not just a tagline . Our values are the foundation of our culture .
Strategic enabling <unk> to build an enduring business for the future ability for the company long term value creation themes operating with a clear commitment to balancing economic growth environmental responsibility and social impact.
Speaker #1: They shape how we lead , how we collaborate , and how we make decisions every day in our February 2025 global Engagement Survey , 94% of our people reported being engaged in their work .
One of our primary objectives under the strategic enabler, it's the leader category with high performing products designed for environmental sustainability.
Speaker #1: More than four times Gallup's global average of 21% , 90% said they feel a strong sense of belonging , and 95% expressed pride in our purpose , mission and values .
Im excited to share that in the upcoming fiscal year, we will introduce a new innovation under the WD 40 specialist product line, which will be our first bio based format of a multi use product.
Speaker #1: This deep connection to who we are and what we stand for translates directly into growth and opportunity . Nearly 40% of our people experience career progression within their first five years at the company .
Our latest maintenance productivity designed to reduce our environmental impact and to have a reduced carbon footprint utilizing standard 14, 067 percent, while still delivering the trusted performance expected from WD 40 brand products.
Speaker #1: To our employees, thank you for consistently showing what it means to live our purpose: to create positive, lasting memories in everything you do.
Product will launch in select European markets later, this fiscal year, and we look forward to sharing updates with you in the quarters ahead.
Speaker #1: What our investors and stakeholders see in our performance is a direct reflection of your commitment to doing meaningful work the right way.
Strategic enabler and number three is achieving operational excellence in our supply chain profitable growth at WD 40 company depends on our supply chain is optimized high performing and resilient in fiscal year 'twenty five strategic enabler played a vital role in protecting gross margins, we delivered several million dollars in echo.
Speaker #1: Strategic enabler number two is to build an enduring business for the future . At WD-40 Co . Long term value creation means operating with a clear commitment to balancing economic growth , environmental responsibility , and social impact .
Speaker #1: One of our primary objectives under this strategic enabler is to lead our category with high performing products designed for environmental sustainability . I'm excited to share that in the upcoming fiscal year , we'll introduce a new innovation under the WD 40 specialist product line , which will be our first bio based format of our multi-use product .
Ohmic value through cost reduction initiatives, such as packaging enhancements logistics efficiencies and strategic sourcing.
These efforts helped to offset the financial impact of tariffs.
The scoring the importance of this enabler.
Operationally in fiscal year 2025, we achieved <unk> long term delivery of 96, 4%.
Speaker #1: Our latest maintenance product is designed to reduce our environmental impact and to have a reduced carbon footprint utilizing ISO standard 14 067 , while still delivering the trusted Performance expected from WD 40 brand products .
Our current target and also inventory levels of 99 days on hand, coming closer to our target of 90 days.
Strategic enablement before is to drive productivity through 100 systems.
Speaker #1: The product will launch in select European markets later this fiscal year , and we look forward to sharing updates with you in the quarters ahead .
<unk> 40 company technology as a key enabler of productivity and resilience while building a scalable digital infrastructure designed to support global growth and enhance operational agility accelerating our strategic execution.
Speaker #1: Strategic enabler number three is achieving operational excellence in our supply chain . Profitable growth at WD 40 company depends on the supply chain is optimized .
Partnering with leading technology companies, who are investing in proven AI enabled systems, such as <unk> hundred six five and sales force that we believe will drive future gains in productivity.
Speaker #1: High performing and resilient . In fiscal year 25 , the strategic enabler played a vital role in protecting gross margins . We delivered several million dollars in economic value through cost reduction initiatives such as packaging enhancements , logistics efficiencies , and strategic sourcing .
While we are taking a pragmatic approach to adopting AI across our organization. We have already identified several promising use cases, it will help us to boost employee productivity.
Speaker #1: These efforts helped to offset the financial impact of tariffs , underscoring the importance of this enabler operationally , in fiscal year 2025 , we achieved global on time delivery of 96.4% above our current target and also inventory levels of 99 days on hand .
Our brand more effectively around the world and accelerate learning and improved collaboration within our global community.
With that I'll now turn the call over to Sarah.
Thanks, Steve for that overview of our sales results and strategic framework.
Pleased to share that we delivered a strong fourth quarter performance, culminating in an excellent bottom line finished the fiscal year 2025.
Speaker #1: Coming closer to our target of 90 days, strategic enablement is to drive productivity through enhanced systems at WD-40. Company technology is a key enabler of productivity and resilience.
Today I'll walk through how we performed against our fiscal year 2025 guidance.
Share insights into our business model and highlight key takeaways from our fourth quarter financial results.
Speaker #1: We're building a scalable digital infrastructure designed to support global growth and enhance operational agility, accelerating our strategic execution by partnering with leading technology companies to invest in proven AI-enabled systems such as D365 and Salesforce that we believe will drive future gains in productivity.
I'll also provide an update on the divestiture of our homecare and cleaning business in the UK and close with our outlook for fiscal year 2020.
Let's start with a discussion about how we performed against our fiscal year 2025 guidance.
Speaker #1: While we are taking a pragmatic approach to adopting AI across our organization , we've already identified several promising use cases that will help us to boost employee productivity , build our brand more effectively around the world , and accelerate learning and improve collaboration within our global community .
As a reminder, we issued our guidance in fiscal year 2025 on a pro forma basis.
Encourage investors to review our earnings presentation, which includes a pro forma view.
Since we issued our fiscal year 2025 guidance on a pro forma basis I will provide the following summary on the non-GAAP pro forma basis.
Speaker #1: With that , I'll now turn the call over to Sarah .
We expect a net sales growth adjusted for currency to be between six and 9% with net sales of between 600 and $620 million over our pro forma 2024 recall.
Speaker #2: Thanks , Steve , for that overview of our sales results and strategic framework . I'm pleased to share that we delivered a strong fourth quarter performance , culminating in an excellent bottom line finish to fiscal year 2025 .
Today, we reported pro forma net sales adjusted for currency at $603 million.
Speaker #2: Today , I'll walk through how we performed against our fiscal year 2025 guidance , share insights into our business model , and highlight key takeaways from our fourth quarter financial results .
A 6% increase over the 2024, our pro forma results.
If we include the assets held for sale consolidated net sales adjusted for currency for $622 million in fiscal year 2025.
Speaker #2: I'll also provide an update on the divestiture of our home care and cleaning business in the UK, and close with our outlook for fiscal year 2026.
We expected full year gross margin to be in the range of 55% to 56%.
Speaker #2: Let's start with the discussion about how we performed against our fiscal year 2025 guidance . As a reminder , we issued our guidance in fiscal year 2025 on a pro forma basis .
Today, we reported gross margin of 55, 6% in line with our expectations.
We expected our advertising and promotional investment to be around 6% of mast out.
Speaker #2: I encourage investors to review our earnings presentation , which includes a pro forma view . Since we issued our fiscal year 2025 guidance on a pro forma basis , I will provide the following summary on the non-GAAP pro forma basis .
Today, we reported an A&P investment of 6%.
We expected operating income to be between 90 and $101 million.
Today, we recorded operating income of $98 1 million in line with our expectation.
Speaker #2: We expected net sales growth, adjusted for currency, to be between 6% and 9%, with net sales of between $600 million and $620 million over our pro forma 2024 results.
We expected diluted EPS of between $5 30, and five <unk>.
Today, we reported diluted EPS of <unk> 15 in line with our expectations.
Speaker #2: Today , we reported pro forma net sales adjusted for currency of 603 million , a 6% increase over the 2024 pro forma results .
I'm pleased with the resilience and performance of our business and what has been a volatile and uncertain environment.
Speaker #2: If we include the assets held for sale , consolidated net sales adjusted for currency , were 622 million in fiscal year 2025 . We expected full year gross margin to be in the range of 55 to 56% .
Throughout fiscal year 2025, we navigated a range of challenges from tariffs and macroeconomic instability to geopolitical tension and 15 policy landscape.
Despite these headwinds we grew our top line expanded margins and delivered solid bottom line growth.
Speaker #2: Today , we reported gross margin of 55.6% in line with our expectations . We expected our advertising and promotion investment to be around 6% of net sales .
Thank you to all our employees for their focus and adaptability and commitment to delivering meaningful results for our stakeholders.
Let's start with a look at our business model our business model as a strategic tool we use to guide our business.
Speaker #2: Today , we reported an A&P investment of 6% . We expected operating income to be between 96 and $101 million . Today , we reported operating income of 98.1 million , in line with our expectations .
Model is built around three core areas gross margin cost of doing business and adjusted EBITDA.
Let's look at our fourth quarter gross margin performance in.
Speaker #2: We expected diluted EPs of between 530 and 560 . Today , we reported diluted EPs of 550 , in line with our expectations .
In the fourth quarter, our gross margin was 54, 7% compared to 54, 1% last year, which represents an improvement of 60 basis points and was most significantly impacted by the following favorable factors.
Speaker #2: I'm pleased with the resilience and performance of our business in what has been a volatile and uncertain environment throughout fiscal year 2025 , we navigated a range of challenges from tariffs and macroeconomic instability to geopolitical tensions and shifting policy landscapes .
110 basis points from lower specialty chemical costs.
110 basis points from higher average selling prices, including the impact of premium innovation.
And 60 basis points from lower input costs.
Offsetting those benefits to gross margin were unfavorable factor.
Speaker #2: Despite these headwinds , we grew our top line , expanded margins and delivered solid bottom line growth . Thank you to all our employees for their focus , adaptability and commitment to delivering meaningful results for our stakeholders .
140 basis points from unfavorable sales mix and other miscellaneous mix impact.
And 60 basis points from higher warehousing distribution and freight costs, primarily in the Americas.
Speaker #2: Let's start with a look at our business model , our business model is a strategic tool we use to guide our business . The model is built around three core areas gross margin , cost of doing business , and adjusted EBITDA .
I'm happy to share that gross margin performance. This quarter was strong across all three trade blocks with results exceeding our stated target of showing year over year improvement.
In the Americas gross margin increased by 70 basis points compared to the prior year fourth quarter, reaching 53, 2%.
Speaker #2: Let's look at our fourth quarter gross margin performance in the fourth quarter . Our gross margin was 54.7% compared to 54.1% last year , which represents an improvement of 60 basis points and was most significantly impacted by the following favorable factors 110 basis points from lower specialty chemical costs , 110 basis points from higher average selling prices , including the impact of Premiumization and 60 basis points from lower input costs , offsetting those benefits to gross margin were a few unfavorable factors .
I may have held steady at 55, 5% remaining above our target.
And in Asia Pacific gross margin increased by 110 basis points compared to the prior year fourth quarter, reaching 57, 5%.
For the full fiscal year aircraft margin was 55, 1% compared to 53, 4% last year, which represents an improvement of 170 basis points.
As Steve mentioned earlier, we're very encouraged by the consistent improvement to gross margin we've seen over the past three years.
Speaker #2: 140 basis points from unfavorable sales mix and other miscellaneous mix impacts , and 60 basis points from higher warehousing , distribution and freight costs , primarily in the Americas .
Today, we're proud to report full fiscal year gross margin over the high end of our targeted range of 50% to 55% recovery in our gross margin a year ahead of schedule and marking a significant milestone in our recovery journey.
Speaker #2: I am happy to share that gross margin performance this quarter was strong across all three trade blocks , with results either exceeding our stated target or showing year over year improvement in the Americas .
It's important for stakeholders to understand that while certain external risks such as cost volatility tariff uncertainty and inflationary pressure will always be part of the operating environment. We're actively pursuing a range of initiatives designed to help us mitigate those risks and strengthened gross margin overtime.
Speaker #2: Gross margin increased by 70 basis points compared to the prior year . Fourth quarter , reaching 53.2% . Imea held steady at 55.5% , remaining above our target , and in Asia Pacific , gross margin increased by 110 basis points compared to the prior year .
These include supply chain cost reduction project.
<unk> optimization efforts progress on asset divestiture, new product introduction realization strategy and geographic expansion hma's longer contributes positively to gross margin and reinforces our confidence in its long term potential.
Speaker #2: In the fourth quarter, we reached 57.5% for the full fiscal year. Gross margin was 55.1%, compared to 53.4% last year, which represents an improvement of 170 basis points.
Speaker #2: As Steve mentioned earlier , we're very encouraged by the consistent improvement to gross margin we've seen over the past three years . Today , we're proud to report full fiscal year gross margin over the high end of our targeted range of 50 to 55% , recovering our gross margin a year ahead of schedule and marking a significant milestone in our recovery journey .
Backed by our current performance and strategic initiatives, we're confident in our ability to sustain gross margin above 55% in fiscal year 2020.
In addition, gross margin enhancement remains a key priority for senior leaders.
Continuing to be incentivize to drive further improvement.
Now turning to our cost of doing business, which we defined as total operating expenses plus adjustments for certain non cash expenses.
Speaker #2: It's important for stakeholders to understand that while certain external risks , such as cost volatility , tariff uncertainty and inflationary pressures will always be part of the operating environment , we're actively pursuing a range of initiatives
Our cost of doing business is primarily driven by three key areas strategic investments in our people global brand building effort and freight expenses associated with delivering products to our customers.
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Operating income improved to $28 million in the fourth quarter, an increase of 17% over the prior period.
Net income improved to $21 2 million in the fourth quarter, an increase of 27% compared to the prior period.
Diluted earnings per common share for the quarter were $1 56, compared to $1 23 in the prior period, reflecting an increase of 27% over the prior period.
Sara Hyzer: Our adjusted EBITDA was $30.5 million, up 16% from the same period last year. Our adjusted EBITDA margin this quarter was 18% compared to 17% in the same period last year. For the full fiscal year, our adjusted EBITDA was $114.4 million, up 8% from the same period last year. Adjusted EBITDA margin this year was 18%, which is the same as last year. Now let's turn to other key measures of our financial performance: operating income, net income, and earnings per share in the fourth quarter. Operating income improved to $28 million in the fourth quarter, an increase of 17% over the prior period. Net income improved to $21.2 million in the fourth quarter, an increase of 27% compared to the prior period. Diluted earnings per common share for the quarter were $1.56 compared to $1.23 in the prior period, reflecting an increase of 27% over the prior period.
Our diluted EPS reflects $13 6 million weighted average shares outstanding.
Now, let's review, our balance sheet and capital allocation strategy.
We maintain a strong financial position and healthy liquidity and.
<unk>, a disciplined capital allocation approach that both fuel long term growth and generate significant value for our stockholders.
Maintaining a disciplined and balanced capital allocation approach remains a priority for us.
For the foreseeable future, we expect capex of between one and 2% of sales per fiscal year, which is in line with our asset light strategy.
Our cash flow from operations this quarter was $30 million and we elected to use approximately $9 $5 million of that cash to pay down a portion of our short term higher interest rate borrowings.
Although our usual target for debt to adjusted EBITDA is one to two times. We're currently slightly below that range. This provides us with strategic flexibility as we explore opportunities to return capital to stockholders and drive long term growth.
Sara Hyzer: Our diluted EPS reflects 13.6 million weighted average shares outstanding. Now let's review our balance sheet and capital allocation strategy. We maintain a strong financial position and healthy liquidity, enabling a disciplined capital allocation approach that both fuels long-term growth and generates significant value for our stockholders. Maintaining a disciplined and balanced capital allocation approach remains a priority for us. For the foreseeable future, we expect CapEx of between 1% and 2% of sales per fiscal year, which is in line with our asset-light strategy. Our cash flow from operations this quarter was $30 million, and we elected to use approximately $9.5 million of that cash to pay down a portion of our short-term higher interest rate borrowing. Although our usual target for debt to adjusted EBITDA is 1 to 2 times, we are currently slightly below that range.
We continue to return capital to our stockholders through regular dividends and buyback.
Annual dividends will continue to be our priority and our targeted at greater than 50% of earnings.
On October 9th our board of Directors approved a quarterly cash dividend of <unk> 94 per share.
During fiscal year 2025, we repurchased approximately 50000 shares of stock at a total cost of $12 3 million under our share repurchase plan.
Have approximately $30 million remaining under our current repurchase plan, which is set to expire at the end of the fiscal year.
Looking ahead, we intend to accelerate our buyback activity and fully utilize the remaining authorization underscoring our strong conviction in the long term fundamentals of the business.
We're focused on accretive capital returns that reflect our confidence in the long term value of our stock.
Sara Hyzer: This provides us with strategic flexibility as we explore opportunities to return capital to stockholders and drive long-term growth. We continue to return capital to our stockholders through regular dividends and buybacks. Annual dividends will continue to be our priority, and are targeted at greater than 50% of earnings. On October 9, our board of directors approved a quarterly cash dividend of $0.94 per share. During fiscal year 2025, we repurchased approximately 50,000 shares of stock at a total cost of $12.3 million under our share repurchase plan. We have approximately $30 million remaining under our current repurchase plan, which is set to expire at the end of this fiscal year. Looking ahead, we intend to accelerate our buyback activity and fully utilize the remaining authorization, underscoring our strong conviction in the long-term fundamentals of the business.
In fiscal year 2025, excluding the positive impact of the onetime noncash income tax adjustment our return on invested capital was 26, 9%.
Moving from 25, 5% last fiscal year and ahead of our target of 25%.
In September we announced the sale of our <unk> thousand and 1001 carpet fresh brand in the UK to Supreme importance limited, our Manchester based consumer products company.
The all cash transaction valued at up to $75 million was completed in the fourth quarter of fiscal year 2025.
WD 40 company is providing limited transition services for up to three months.
This divestiture reflects our continued focus on optimizing our portfolio and directing resources towards areas that drive long term value.
We continue to make progress on the sale of our America homecare and cleaning product brands, our investment bank continued active discussions with multiple potential buyers.
Sara Hyzer: We're focused on accretive capital returns that reflect our confidence in the long-term value of our stock. In fiscal year 2025, excluding the positive impact of the one-time non-cash income tax adjustment, our return on invested capital was 26.9%, improving from 25.5% last fiscal year and ahead of our target of 25%. In September, we announced the sale of our 1001 and 1001 Carpet Fresh brand in the UK to Supreme Imports Limited, a Manchester-based consumer products company. The all-cash transaction valued at up to $7.5 million was completed in the fourth quarter of fiscal year 2025. WD-40 Company is providing limited transition services for up to three months. This divestiture reflects our continued focus on optimizing our portfolio and directing resources toward areas that drive long-term value. We continue to make progress on the sale of our America's Home Care and Cleaning Product brand.
Although there is no certainty on the deal we remain optimistic and I will provide further updates as appropriate.
Now moving to FY 'twenty guidance.
Given the anticipated divestiture of our Americas homecare and cleaning brands. We are continuing to present this year's guidance on a pro forma basis, excluding the financial impact of the assets held for sale.
We're also providing a pro forma view of fiscal year 2025, excluding the brands, we divested in the UK in the fourth quarter.
The brands currently held for sale and the impact of the onetime tax benefit recorded in the second quarter to help with modeling and period over period comparison.
Please refer to our fourth quarter and full year earnings presentation on our Investor Relations website for those details.
Now with that backdrop, let's take a closer look at our guidance for fiscal year 2020 segment.
We're excited about what lies ahead in fiscal year 2020 effects by balancing strong performance today with thoughtful investments for Tomorrow. We are building a foundation for lasting growth and long term value creation.
Sara Hyzer: Our investment bank continues active discussions with multiple potential buyers. Although there's no certainty of a deal, we remain optimistic, and I will provide further updates as appropriate. Now moving to FY26 guidance. Given the anticipated divestiture of our America's Home Care and Cleaning brands, we are continuing to present this year's guidance on a pro forma basis, excluding the financial impact of the assets held for sale. We're also providing a pro forma view of fiscal year 2025, excluding the brands we divested in the UK in the fourth quarter, the brands currently held for sale, and the impact of the one-time tax benefit recorded in the second quarter to help with modeling and period-over-period comparison. Please refer to our fourth quarter and full-year earnings presentation on our investor relations website for those details.
For fiscal year 2026, we expect net sales growth from the pro forma 2025 result is projected to be between five and 9% with net sales between 630 $655 million after adjusting for foreign currency impact.
Gross margin is expected to be between 55, five and 56, 5%.
Advertising and promotion investment is projected to be around 6% of net sales.
Operating income is expected to be between 103 and $110 million representing growth of between five and 12% from the pro forma 2025 results.
The provision for income taxes expected to be between $22 five and 23, 5%.
Sara Hyzer: Now, with that backdrop, let's take a closer look at our guidance for fiscal year 2026. We're excited about what lies ahead in fiscal year 2026. By balancing strong performance today with thoughtful investments for tomorrow, we're building a foundation for lasting growth and long-term value creation. For fiscal year 2026, we expect net sales growth from the pro forma 2025 results is projected to be between 5% and 9%, with net sales between $630 million and $655 million after adjusting for foreign currency impacts. Gross margin is expected to be between 55.5% and 56.5%. Advertising and promotion investment is projected to be around 6% of net sales. Operating income is expected to be between $103 million and $110 million, representing growth of between 5% and 12% from the pro forma 2025 results. The provision for income tax is expected to be between 22.5% and 23.5%.
And diluted earnings per share is expected to be between $5 75, and <unk>, which is based on an estimated $13 4 million weighted average shares outstanding.
This range represents growth of between five and 12% over the pro forma 2025 results.
This guidance assumes no major changes to the current economic environment.
Unanticipated inflationary headwinds and other unforeseen events may affect our view of fiscal year 2020.
In the event, we are unsuccessful in the divestiture of the Americas homecare and cleaning brands, our guidance will be positively impacted by approximately $12 5 million in net sales.
$3 6 million and operating income in 2000 and diluted EPS on a full year basis.
That completes the financial overview.
Now I would like to turn the call back to Steve.
Thank you Sarah for that update as we close another fiscal year activity 40 company I'm reminded of how fortunate we are to lead such a remarkable business.
Sara Hyzer: Diluted earnings per share is expected to be between $5.75 and $6.15, which is based on an estimated 13.4 million weighted average shares outstanding. This range represents growth of between 5% and 12% over the pro forma 2025 results. This guidance assumes no major changes to the current economic environment. Unanticipated inflationary headwinds and other unforeseen events may affect our view of fiscal year 2026. In the event we are unsuccessful in the divestiture of the Americas Home Care and Cleaning brands, our guidance would be positively impacted by approximately $12.5 million in net sales, $3.6 million in operating income, and $0.20 in diluted EPS on a full-year basis. That completes the financial overview. Now I would like to turn the call back to Steve.
We have a world class brand with a sustainable competitive advantage, our highly diversified global footprint and a long runway for growth.
Our capital light efficient business model generates significant cash providing a strong financial foundation that allows us to invest in growing our brands and accelerates the development of our future leaders, while continuing to prioritize returning capital to our investors.
But if that's not enough what did you hear from us on this call.
Note that we reported currency adjusted pro forma net sales of $603 million a.
A 6% increase over FY 'twenty for results.
It's in line with our expectations.
You heard that sales of our maintenance products were up 6% in both the fourth quarter and fiscal year under this performance aligns with our long term growth target.
$3 6 million in operating income and 20 and diluted EPS on a full year basis.
That completes the financial overview now I would like to turn the call back to Steve.
You heard that we estimate the benchmark sales opportunity for WD 40, multi use product to be approximately $1 9 billion and that we've achieved nearly 25% of that benchmark opportunity.
Steve Brass: Thank you, Sara, for that update. As we close another fiscal year at WD-40 Company, I'm reminded how fortunate we are to lead such a remarkable business. We have a world-class brand with a sustainable competitive advantage, a highly diversified global footprint, and a long runway for growth. Our asset-light, efficient business model generates significant cash, providing a strong financial foundation that allows us to invest in growing our brands and accelerate the development of our future leaders while continuing to prioritize returning capital to our investors. As if that's not enough, what did you hear from us on this call? You heard that we reported currency-adjusted pro forma net sales of $603 million, a 6% increase over FY24 results, and right in line with our expectations.
Thank you Sarah for that update as we close another fiscal year activity 40 company I'm reminded of how fortunate we are to lead such a remarkable business.
We estimate the benchmark sales opportunity for WD 40 specialist to be approximately $665 million.
A world class brand with a sustainable competitive advantage, a highly diversified global footprint and a long runway for growth our capital light efficient business model generates significant cash providing a strong financial foundation that allows us to invest in growing our brands and accelerate the development of our future leaders.
Was achieved in a 12% of that benchmark opportunity.
You heard that we sold our UK homecare and cleaning product brands.
For the full fiscal year, we delivered a gross margin of 55, 1% or 55, 6%. If we remove the financial impact could be assets held for sale.
Continuing to prioritize returning capital to our investors.
There's absolutely no what did you hear from us on this call.
You heard that for the fourth quarter, we delivered a gross margin of 54, 7% an impressive 730 basis point improvement from the fourth quarter of fiscal year 2021.
You heard that we reported currency adjusted pro forma net sales of $603 million, a 6% increase over FY 'twenty four results right in line with our expectations.
You heard is supported by current performance and our strategic initiatives. We believe we are well positioned to target a gross margin of above 55% in FY 'twenty six.
Steve Brass: You heard that sales of our maintenance products were up 6% in both the fourth quarter and fiscal year, and that this performance aligns with our long-term growth target. You heard that we estimate the benchmark sales opportunity for WD-40 Multi-Use Product to be approximately $1.9 billion, and that we've achieved only 25% of that benchmark opportunity. You heard that we estimate the benchmark sales opportunity for WD-40 Specialist to be approximately $665 million, and that we've achieved only 12% of that benchmark opportunity. You heard that we sold our UK home care and cleaning product brands. You heard that for the full fiscal year, we delivered a gross margin of 55.1% or 55.6% if we remove the financial impact of the assets held for sale.
You heard that sales of our maintenance products were up 6% in both the fourth quarter and fiscal year under this performance aligns with our long term growth target.
By looking ahead to fiscal year 2006, we intend to accelerate our buyback activity and fully utilize the remaining authorization underscoring our strong conviction in the long term fundamentals of the business.
You heard that we estimate the benchmark sales opportunities with <unk> 41 to use book to be approximately $1 9 billion.
And that we've achieved 25% of that benchmark opportunity.
You heard that we estimate the benchmark sales opportunity for WD 40 specialist to be approximately $665 million.
And you heard that we're issuing guidance for fiscal year 2006 on a pro forma basis, excluding the brands, we expect to divest this year.
Cheese, and a 12% of that benchmark opportunity.
Thank you for joining our call today, we would now be pleased to answer your questions.
That we sold our UK homecare and cleaning product brands.
For the full fiscal year, we delivered a gross margin of 55, 1% or 55, 6%, if we removed the financial impact of the assets held for sale.
Yeah.
Ladies and gentlemen.
The Register a question. Please press Star then the number one on your telephone keypad.
Steve Brass: You heard that for the fourth quarter, we delivered a gross margin of 54.7%, an impressive 730 basis point improvement from the fourth quarter of fiscal year 2021. You heard that supported by current performance and our strategic initiatives, we believe we're well positioned to target a gross margin of above 55% in FY26. You heard that by looking ahead to fiscal year 2026, we intend to accelerate our buyback activity and fully utilize the remaining authorization, underscoring our strong conviction in the long-term fundamentals of the business. You heard that we're issuing guidance for fiscal year 2026 on a pro forma basis, excluding the brands we expect to divest this year. Thank you for joining our call today. We'd now be pleased to answer your questions.
Please me please make sure your mute function is turned off to allow your signal to reach our equipment.
For the full quarter, we delivered a gross margin of 54, 7% an impressive 730 basis point improvement from the fourth quarter of fiscal year 2021.
Question has been answered and you'd like to withdraw your registration.
Please press pound key.
You heard is supported by current performance and our strategic initiatives. We believe we are well positioned to target a gross margin of about 55% in FY 'twenty six.
The number one on your telephone keypad.
One moment please for the first question.
By looking ahead to fiscal year 2006, we intend to accelerate our buyback activity and fully utilize the remaining authorization underscoring our strong conviction in the long term fundamentals of the business.
Your first question comes from the line of Daniel Rizzo from Jefferies. Your line is open.
Hey, guys. Thanks for taking my question.
A clarification. So when you guys gave.
Your initial guidance last year that excluded the homecare sales same thing this year, but when you reported throughout the year you reported including the home care sales is that correct.
And you heard that we're issuing guidance for fiscal year 2006 on a pro forma basis, excluding the brands, we expect to divest this year. Thank.
Hi, Daniel Yes, so in the in the press release and in the 10-Q Youll see those things include them, obviously, because those are reported on a GAAP basis, our U S. GAAP basis in the investor deck on every quarter. We showed a pro forma view. So that you can back out those sales, although you can easily see those sales.
Thank you for joining our call today, we would now be pleased to answer your questions.
Okay.
Operator: Ladies and gentlemen, if you'd like to register a question, please press R, then the number 1 on your telephone keypad. Please make sure your mute function is turned off to allow your signal to reach our equipment. If your question has been answered and you would like to withdraw your registration, please press the pound key, then the number 1 on your telephone keypad. One moment, please, for the first question. Your first question comes from the line of Daniel Rizzo from Jefferies. Your line's open.
Ladies and gentlemen.
To Register a question. Please press Star then the number one on your telephone keypad.
Please please please make sure your mute function is turned off to allow your signal to reach our equipment.
In our in our footnotes, because we do break out the HCP sales in both the Americas and EMEA regions, but the pro forma view went a step further to take you all the way down in the P&L. So you could actually see the impact down to EPS.
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The number one on your telephone keypad.
One moment please for the first question.
Okay. So I'm looking on us looking at pro forma is $5 50 in EPS in 2000.
That's correct Alright, alright, so I just wanted clarification on that thanks.
Your first question comes from the line of Daniel Rizzo from Jefferies. Your line is open.
Sorry for that.
So then you mentioned kind of a mixed headwind I was wondering if you could provide color on that.
Daniel Rizzo: Thanks for taking my question. I just need a clarification. When you guys gave your initial guidance last year, that excluded the home care sales, same thing as this year. When you reported throughout the year, you reported including the home care sales. Is that correct?
Hey, guys. Thanks for taking my question I just need.
A clarification. So when you guys gave.
I mean, I assume that <unk> is kind of a mixed tailwind, but I was wondering what's kind of countering that you pointed out in the gross margin.
Your initial guidance last year that excluded the homecare sales same thing this year, but when you reported throughout the year you reported including the home care sales is that correct.
Okay.
Oh on the on the gross margin from a tailwind for the year well you said there was a mixed headwind I understand all the things I was wondering what that what you're referring to.
Sara Hyzer: Hi, Daniel. Yes. In the press release and in the 10-Q, you'll see those include them, obviously, because those are reported on a GAAP basis or a U.S. GAAP basis. In the investor deck on every quarter, we showed a pro forma view so that you could back out those sales. Although you can easily see those sales in our footnotes because we do break out the HCCP sales in both the Americas and the IMEA regions, the pro forma view went a step further to take you all the way down in the P&L so you could actually see the impact down to EPS.
Hi, Danielle yes, so in the in the press release and in the 10-Q, you'll see those and include them. Obviously, because those are reported on a GAAP basis, our U S. GAAP basis in the investor deck on it every quarter, we showed a pro forma view so that you could back out those sales, although you can easily see those sales.
I think the mix what I.
So maybe it wasn't clear the mix as our sales mix and other miscellaneous sales or other miscellaneous mix impacts so yeah. So the.
Premium innovation, if you look at it for the full year.
Actually that's more for the quarter the impacts for the quarter, the sales mix and other miscellaneous mix impacts.
In our in our footnotes, because we do break out the HCP sales in both the Americas and EMEA regions, but the pro forma view went a step further to take you all the way down in the P&L. So you could actually see the impact down to EPS.
A headwind level above up about 140 basis points.
I'm, sorry, I'm, just wondering what exactly that is.
I mean, just going distributor versus direct or.
Daniel Rizzo: Okay. I'm looking at it now. The pro forma is $5.50 in EPS in 2025, right?
Okay. So I'm looking at now is looking at pro forma is $5 50 in EPS in 2012.
It's a mix so yes, it's a mix of both how the markets play out the direct and distributors. But then there is also a mix of product so.
Sara Hyzer: Yes.
Daniel Rizzo: Okay.
Sara Hyzer: That's correct.
That's correct Alright, alright, so I just wanted clarification on that thanks.
Daniel Rizzo: All right. Sorry, I just wanted clarification on that. Thanks.
Sara Hyzer: Thank you for that.
Sorry for that.
Daniel Rizzo: You mentioned that it's kind of a mixed headwind. I was wondering if you could provide color on that. I assume that premiumization is kind of a mixed tailwind, but I was wondering what's kind of countering that that you pointed out in the gross margin?
So then you mentioned kind of a mixed headwind I was wondering if you could provide color on that.
In addition to that but also bulk and specialist and mapped its just a general product sales mix. In addition to the market mix.
I mean, I assume that <unk> is kind of a mixed tailwind, but I was wondering what's kind of counting about that you pointed out in the gross margin.
Okay and then my final question with premium position Thats doing fairly well with a multi use product I wonder if I <unk> like an EZ reach straw or or something like that would be applied to the specialist potline is that something that's being considered or.
Okay.
Sara Hyzer: Oh, on the gross margin from a tailwind for the year?
Oh on the on the gross margin from a tailwind for the year well you said there was a mix headwind and all the things I was wondering what that what you're referring to.
Daniel Rizzo: You said there was a mixed headwind and other things. I was wondering what you were referring to.
Sara Hyzer: I think the mix is a sales mix and other miscellaneous sales or other miscellaneous mix impacts. Yes, the premiumization, if you look at it for the full year, actually, it's more for the quarter. The impact for the quarter, the sales mix and other miscellaneous mix impacts had a headwind of about 140 basis points.
Kind of far from that or how we should think about it.
Well I think the next what I, so maybe it wasn't clear the mix as our sales mix and other miscellaneous sales or other miscellaneous mix impacts so yeah. So the.
Hey, Daniel stage, and so, especially the specialist the.
The whole specialty this line.
<unk> sells at a higher gross margin as well so effective later, either pre maybe it'd be kind of to be fully especially so is margin accretive and so that is a separate form of premium amortization, having said that we already in several countries around the world. We've also launched particularly the EZ reach.
Premium innovation, if you look at it for the full year.
Actually it's more for the quarter the impacts for the quarter, the sales mix and other miscellaneous mix impacts had a.
The wind levels above up about 140 basis points.
Daniel Rizzo: I'm sorry. I'm just looking at what exactly that is. Is that, I mean, just going distributor versus direct?
I'm, sorry, I'm, just wondering what exactly that is.
Delivery system on things like our penetrant product, which you have in the U S wanted to other countries around the world and so on.
I mean, just going distributor versus direct or.
It's a mix so yes, it's a mix of both how the markets play out so direct and distributors. But then there is also a mix of product. So koreanization placement of that but also bulk and specialist and not it's just a general product sales mix. In addition to the market mix.
Sara Hyzer: Yes, it's a mix of both how the markets play out, so direct and distributors, but then there is also a mix of product. Premiumization plugged into that, but also bulk and specialist and MUP. It's just a general product sales mix in addition to the market mix.
Certainly smart straw, we leverage as part of our specialist premium adjacent strategies.
Yes, it applies to both the core product tend to anticipate this as well.
Alright, Thank you very much.
Thank you Keith.
Yes.
Your next question comes from the line of Keegan Cox from D. A Davidson your line is open.
Daniel Rizzo: Okay. My final question, you know, with premiumization, that's doing fairly well with the WD-40 Multi-Use Product. I wonder if premiumization, like an Easy Reach draw or something like that, would be applied to the WD-40 Specialist product line. Is that something that's being considered, or are we kind of far from that, or how should we think about it?
Okay and then my final question with premium position, that's doing fairly well with a multi use product I wonder if like pre musician like EZ reach straw or or something like that would be applied to the specialist potline is that something that's being considered or.
Hi, guys can you again on for Mike Baker today, well I.
Just wanted to ask if you could.
We kind of far from that or how we should think about it.
Do you have any color or thoughts on a potential gross margin headwind and tailwind that you are expecting within your 2026 guidance.
Steve Brass: Hey, Daniel. It's Steve. The specialist, you know, the whole specialist line sells at a higher gross margin as well. Effectively, that is a premium. Every kind of WD-40 Specialist we sell is margin accreted, and that is a separate form of premiumization. Having said that, we already, in several countries around the world, have also launched a particularly easy reach and delivery system on things like our penetrant product, which you have in the U.S. and one or two other countries around the world. Certainly, Smart Straw we leverage as part of our specialist premiumization strategy. Yes, it applies to both the core product and to specialists as well, Daniel.
Hey, Dan need states, and so especially for specialist.
Whole specially this line.
<unk> sells at a higher gross margin as well so effectively into either.
I can't give Mrs. Sarah So, yes, I would say in our in our guidance.
We tended to be pretty specialty so is margin accretive and so that is a separate form of premium amortization, having said that we already in several countries around the world. We've also launched a particularly easy reach.
Have we.
We have built 10, both headwinds and <unk>. We are we are seeing stability from a cost input standpoint.
And when you look at what we've built into our gross margin guidance if oil stays at the levels that they're at right now that could be a small tailwind for us as we've tried to be a little bit conservative in what we've built in for an oil assumption because we just never really know which direction that is going to go.
Delivery system on things I'll call Penetrant product, which you have in the U S moving to other countries around the world and so and certainly smart straw, we leverage as part of our specialist.
Jason strategy. So yes, it applies to both the core product tend to enter specialist as well as any.
Daniel Rizzo: All right. Thank you very much.
Alright, alright, thank you very much.
But there are a number of cost saving initiatives that we have in the pipeline based on actions that we've taken in FY 'twenty five that will feed into FY 'twenty six along with new actions that we felt around.
Sara Hyzer: Thank you.
Steve Brass: Thank you.
Thank you Keith.
Operator: Your next question comes from the line of Keegan Cox from D.A. Davidson. Your line is open.
Your next question comes from the line of Keegan Cox from D. A Davidson your line is open.
[Analyst] (D.A. Davidson): Hi, guys. Keegan on for Michael Allen Baker today. I just wanted to ask if you could give any color or thoughts on potential gross margin headwinds and tailwinds that you're expecting within your 2026 guidance.
Cost supply chain optimization and continuation of the efforts that we've had in FY 'twenty five on the sourcing side, we had a lot of success. This year from our global sourcing standpoint, and exceeded our cost savings expectations that we had this year. Some of those will then benefit our margin going into FY 'twenty.
Hi, guys <unk> on for Mike Baker today.
I just wanted to ask if you could give.
Do you have any color or thoughts on a potential gross margin headwind and tailwind that you are expecting within your two.
2026 guidance.
Sara Hyzer: Hi, Keegan. This is Sara. Yes, I would say in our guidance, we have built in both headwinds and tailwinds. We are seeing stability from a cost input standpoint. When you look at what we've built into our gross margin guidance, if oil stays at the levels that they're at right now, that could be a small tailwind for us as we've tried to be a little bit conservative in what we've built in for an oil assumption because you just never really know which direction that is going to go. There are a number of cost-saving initiatives that we have in the pipeline based on actions that we've taken in FY2025 that will feed into FY2026, along with new actions that we've built around cost, supply chain optimization, and continuation of the efforts that we've had in FY2025 on the sourcing side.
I can't give Mrs. Sarah So, yes, I would say in our in our guidance.
Got it and then.
We have.
As I looked at kind of the sales results in Asia.
We have built 10, both headwinds and <unk>. We are we are seeing stability from a cost input standpoint, and when you look at what we've built into our gross margin guidance if oil stays at the levels that they're at right now that could be a small tailwind for us since we've tried to be a little bit concern.
Asia Pacific, specifically say that forecast.
It looks like the distributors accounted for most of the growth there.
What wasn't.
Kind of a runway left for I guess that distributor market.
Sure. It's a very very long runway and so yeah, China also had a good all three areas Rural France, Australia, I believe is up 6%. So the rest of the year, China was up in double digits.
And what we've built in for an oil assumption because you just never really know which direction that is going to go.
But there are a number of cost saving initiatives that we have in the pipeline based on actions that we've taken in FY 'twenty five that will feed into FY 'twenty six along with new actions that we've built around.
And then yes for the full quarter in particular, we added a very strong comeback in distributor markets and so.
We look at all of those markets is a very very long runway for growth in places like Indonesia, where we've introduced a new kind of a hybrid business model has been growing at a CAGR of around 20% over the past few years menu.
Cost supply chain optimization and continuation of the efforts that we've had in FY 'twenty five on the sourcing side, we had a lot of success. This year from our global sourcing standpoint, and exceeded our cost savings expectations that we had this year. Some of those will then benefit our margin going into FY 'twenty.
Sara Hyzer: We had a lot of success this year from a global sourcing standpoint and exceeded our cost-savings expectations that we had this year. Some of those will then benefit our margin going into FY2026.
Many of those are the key.
Key markets across the region had a very very long room nights for growth.
Improved performance in the back half in Asia.
[Analyst] (D.A. Davidson): Got it. As I looked at kind of the sales results in Asia-Pacific specifically, say that five times, it looks like the distributors accounted for most of the growth there. What is kind of the runway left for, I guess, that distributor market?
There may be some kind of impact in terms of course is the distributors are a little more lumpy right. So going into the first quarter you may see some kind of pullback.
Got it and then.
As I looked at kind of the sales results in Asia.
Asia Pacific, specifically say that five times.
Really again kind of inventory management in Asia for Q1, but beyond that we see a really strong rebound in Asia Pacific later in the fiscal year.
It looks like the distributors accounted for most of the growth there.
What would be.
Kind of a runway left for I guess state that distributor market.
Got it thank you.
Welcome.
Steve Brass: Sure. It's a very, very long runway. Yeah, China also had a good—well, all three areas were up, right? Australia, I believe, was up 6% for the year. China was up in double digits. Yes, for the fourth quarter in particular, we had a very strong comeback in distributor markets. As we look at all of those markets, it's a very, very long runway for growth. I mean, places like Indonesia, where we've introduced our new kind of hybrid business model, have been growing a decade of around 20% over the past few years. Many of those other key markets across the Asia region have a very, very long runway for growth. Improved performance in the back half in Asia. There may be some kind of impact in terms of, of course, the distributors are a little more lumpy, right?
Sure. It's a very very long runway and so yeah, China also had a good all three areas rural.
Okay.
Ladies and gentlemen that does conclude our allotted time for questions. We thank you for your participation on today's conference call and ask that you. Please disconnect your lines.
Australia, I believe was up 6%.
The year, China was up in double digits.
And then yes for the full quarter in particular, we added a very strong comeback in distributor markets and so.
As we look at all of those markets is a very very long runway for growth in places like Indonesia.
We've introduced a new kind of a hybrid business model has been growing into kgs of around 20% over the past few years many.
Many of those are the key.
Key markets across the region had a very very long room night growth.
Improved performance in the back half in Asia, and there may be some kind of impact in terms of the cause of the distributors a little more lumpy right and so going into the first quarter you may see some kind of pull back and that's just really again kind of inventory management in Asia for Q1 beyond that we see a really strong rebound in Asia Pacific later in the fiscal year.
Steve Brass: Going into the first quarter, you may see some kind of pullback. That's just really kind of inventory management in Asia for Q1. Beyond that, we see a really strong rebound in Asia-Pacific later in the fiscal year.
Yeah.
[Analyst] (D.A. Davidson): Got it. Thank you.
Got it thank you.
Steve Brass: Welcome.
Welcome.
Yeah.
Operator: Ladies and gentlemen, that does conclude our allotted time for questions. We thank you for your participation on today's conference call and ask that you please disconnect your line.
Ladies and gentlemen that does conclude our allotted time for questions.
You for your participation on today's conference call and ask that you. Please disconnect your lines.
Okay.
Yeah.
Okay.
Yeah.
Yeah.
Yeah.
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