WD-40 lubricates local market

The California-based hardware and supermarket supplier called out Australia as one of its strongest growth regions.

In Australia, WD-40 said net sales were $US4.9m ($7m) in the third quarter, up 16 per cent compared to last year.

The rush by consumers to tackle home improvement projects during lockdowns triggered by the coronavirus pandemic, and panic buying of personal and household cleaning products, has generated double-digit sales growth for iconic hardware brand WD-40, with its Solvol soaps and No Vac carpet sanitiser also booking a strong sales leap.

In an earnings update to US investors the California-based hardware and supermarket supplier called out Australia as one of its strongest growth regions, as shoppers stripped the shelves of its range of WD-40 lubricants and maintenance sprays as well as its personal hygiene Solvol soaps.

WD-40 president Steve Brass highlighted Australia to US investors and analysts in the third-quarter earnings update and the near 20 per cent sales gain in the period. When removing the impact of foreign currency movements, sales in Australia rocketed by 28 per cent in the quarter.

Its sales in Australia easily eclipsed those in its home market of the US, helped by hardware stores and other distribution sites able to stay open during the first wave of the COVID-19 outbreak.

“Though our sales held up relatively well compared to some industries, the performance of our individual segments in the third quarter was driven primarily by whether or not distribution channels were open in any particular market,” Mr Brass said.

“We saw the most significant sales declines in markets that were hardest hit by COVID-19 and which had the most stringent lockdown orders in place.”

This was most evident in the performance of Australia against that in the US, which has much harsher lockdowns on retailers and consumers.

“For example, in the United States and Australia, sales increased 1 per cent and 16 per cent, respectively. This is because in these markets most of our traditional distribution channels were open. And in the US we have a developed e-commerce business, which helped us to offset losses we experienced in other trade channels.”

In Australia, WD-40 said net sales were $US4.9m ($7m) in the third quarter, up 16 per cent compared to last year, driven by increased demand for its Solvol soaps and No Vac household cleaning products.

In addition, WD-40 Multi-Use Product and WD-40 Specialist were up 4 per cent and 18 per cent respectively from period to period.

“The impacts of the COVID-19 pandemic were very limited in Australia compared to many other countries, since COVID-19 case numbers remained relatively low in the country adopted less severe lockdown requirements.”

Mr Brass said changes in foreign currency exchange rates had an unfavourable impact on sales in the region and if measured on a constant currency basis, sales in Australia would have increased 28 per cent from last year.

The booming third quarter capped off a strong year for WD-40 in Australia, where it has experienced robust sales and profit growth. Documents lodged with the corporate regulator show in fiscal 2019 WD-40 posted revenue of $23.93m, up from $23.17m. Meanwhile profit rose to $1.44m from $1m.

The well-known hardware brands owned by WD-40 were helped by a spike in taking on home improvement and renovation projects as the coronavirus pandemic emerged in March and Australian consumers spent the majority of their time at home. This also led to a sales boost for hardware chains such as market leader Bunnings and rival national outlet Mitre 10.

In a recent trading update, Bunnings said its first-half sales growth for 2020 had risen from 5.8 per cent to 19.2 per cent for the second half to the beginning of June.