The maker of the signature solvent spray posted net income of $8.6 million in the quarter, a 60% drop year over year.
Investors didn’t respond well, dropping WD-40’s share price 4% to $175.32.
The reason for such a significant dropoff, the company said, was an $8.7 million tax reserve.
"In the fourth quarter, net income and diluted earnings per share were negatively impacted by an $8.7 million reserve for an uncertain tax position that we recorded, and previously disclosed, during the fourth quarter," CFO Jay Rembolt said in a statement.
"Because of this adjustment, our net income is significantly lower on a year-over-year basis in both the quarter and the full fiscal year. The good news is that this a one-time charge and the high tax rate we recorded is not expected to carry into fiscal year 2020.”
That said, the company still beat expectations. Overall, WD-40 saw revenue grow 4% to $106.7 million and per share earnings came in at $0.63. Analysts polled by FactSet had projected revenue of $106.3 million and earnings of $0.60 per share.
Guidance, though, was the company’s squeaky wheel. For fiscal 2020, WD-40 projected earnings between $4.74 and $4.83 per share, a range below analysts’ expectations of $4.96 per share. Revenue is expected to fall between $436 million and $453 million, while analysts project $445 million.
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