WD-40 has almost tripled profits through Covid-19

The home projects boom has helped to more than double sales for WD-40’s range of lubricants and degreasers.

The strong uplift in sales since 2020 has generated rising profitability for WD-40 in Australia

Australian homeowners have returned to their home renovation and repair projects during the current Covid-19 wave to deliver massive sales growth for iconic US hardware brand WD-40, with its flagship cleaner and degreaser spray can product more than doubling sales between April and June.

And the Covid-19 pandemic has been good for business for WD-40, helping its profits in Australia almost triple since before the health crisis began.

“At this stage, the impact on our business and results has been positive,” directors for WD-40 Australia said in its latest 2020 financial accounts.

“As we operate in the cleaning and do-it-yourself markets we have found increased demand for our products and expect this to continue.”

The passion which consumers have embraced home projects through protracted lockdowns and isolation has fed into bumper sales for the nation’s key hardware chains, led by Bunnings and Mitre 10, with DIY hardware goods such as the cleaners, degreasers and lubricants sold under the WD-40 branding particularly popular.

However, it does seem that Australians have stocked up on enough home cleaning and disinfectant supplies from last year when they stripped the shelves of soaps and sanitisers. WD-40 revealed its range of home cleaning products has reported a sales decline for the third quarter in Australia against double-digit sales growth for its Solvol soaps and No Vac carpet sanitiser in early 2020 when the Covid-19 pandemic emerged in Australia and the first lockdowns began.

WD-40 president Steve Brass has highlighted Australia to US investors and analysts in the company’s third-quarter earnings update, detailing 100 per cent-plus sales growth for one of its key home hardware products as new waves of the pandemic hit the country and consumers took up repair and renovation projects.

“In Australia, net sales were $US6 million in the third quarter, up 22 per cent compared to last year,” Mr Brass said in the earnings briefing to the US market.

“In local currency sales of maintenance products were up 9 per cent in Australia, driven primarily by strong sales of 3-IN-ONE and WD-40 Specialist, which were up 114 per cent and 24 per cent, respectively, due to the isolation renovation phenomenon.”

But there was a reversal in last year’s sales boom of WD-40’s range of home cleaning and sanitising products.

“Partially offsetting these sales increases were lower sales of our homecare and cleaning products, which were down 9 per cent in the quarter, as we have seen demand for these products return to more levels due to improvements in public health and safety restrictions related to the pandemic.”

The strong uplift in sales since 2020 has generated rising profitability for WD-40 in Australia. Latest accounts lodged with the corporate regulator show WD-40 saw its sales rise to $26.66m in the 12 months to the end of August 2020, up from $23.933m in 2019. This has helped its profit almost double, hitting $2.55m in 2020 against $1.44m in 2019. In 2018 its profit was $1m.

Homeowners have increasingly taken up projects around their properties as they travel less and are forced to spend more time at home, either voluntarily or forced to by government lockdowns. The nation’s biggest hardware chain Bunnings testified to this boom at its latest first half results which showed a 24.4 per cent increase in sales to $9.054 billion while Metcash’s hardware chains which include the Mitre 10 banner group last month reported its full-year sales rose by 24.7 per cent to $2.588bn as there was a shift in consumer behaviour and spending through Covid-19.