WD-40 Company (NASDAQ:WDFC) Q1 2023 Earnings Call Transcript

Christina Xue: Hi. This is Cristina Xue on for Linda Bolton Weiser from D.A. Davidson. Thank you for taking my question. So, maybe I’ll follow-up from the previous question. Moving or going forward, do you think more pricing is needed to help to restore those gross margin going forward?

Steve Brass: Hi, Christina. Thank you for the question. So, in terms of EMEA and Americas, which is 88%, 87% of our business, we think we’ve taken the necessary tactical price action to restore our gross margin. So, we have no further tactical pricing measures. And we revert back to our strategic gross margin enhancement strategies, such as our premiumization, our WD-40 Specialist Strategy, etcetera. We do have price increases planned in Q2 and Q3 within Asia Pacific. So, Asia Pacific hasn’t seen the same level of inflation that the Americas and EMEA have seen, but there are price increases planned within the Asian region, within our Q2 and Q3.

Christina Xue: Okay. So, maybe one more follow-up question. Are you starting to regain the placement at the big-box retailers?

Steve Brass: So yes, absolutely. Yes. So that was one of the things we spoke about last quarter was just this loss of momentum and that’s the real driver of, kind of the volume loss. And so, if you look €“ if you start with the U.S. we’ve seen a significant recovery in volume loss. And we expect that to dissipate to virtually zero over a period of time going forward. I just can’t tell you exactly when that’s going to be, but we have seen a significant improvement as we’ve re-established our promotional programs with customers. We’ve already seen a significant enhancement in our volumes over the past couple of months in the U.S. particularly, that has now got to play out in Europe as a follow-on.

Christina Xue: Okay. That’s helpful. Thank you.

Steve Brass: Thank you.

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 now disconnect.