Why WD-40 Company Stock Crashed on Friday

Shares of lubrication specialist WD-40 Company (NASDAQ: WDFC) lost their grip on Friday, sliding by 12.6% as of 11 a.m. ET after the company reported deep declines in both sales and earnings for its fiscal 2022 third quarter, which ended May 31.

Ahead of the report, analysts had forecast that WD-40 would earn $1.27 per share -- already significantly less than the $1.52 per share it earned a year ago. In fact, WD-40 earned a mere $1.07 per share, and on sales of only $123.7 million -- a nearly $13 million drop from the year-ago quarter.

Management blamed "translation of the Company's foreign subsidiary results to U.S. dollars" as well as other "global disruptions" for the sales decline -- an explanation that doesn't really mix well with water, because such foreign-currency effects accounted for only a $100,000 difference in net sales for the quarter. The bigger problem was that gross profit margins contracted by 540 basis points year over year, although management tried to mitigate the damage by cutting spending on advertising and sales promotions, as well as reducing other selling, general, and administrative expenses.

Source Fool.com