How is a legend forged? WD-40—the 'universal lubricant'—epitomizes both the glory and the challenges of a blockbuster consumer product.

One trick, and you rule the world. In the fields of repair and DIY, WD-40 is regarded as a universal little blue bottle. Just as Cantonese people view herbal tea—as a cure-all for any physical discomfort, inflammation, headache, or itch—WD-40’s applications seem boundless: from fixing common joystick drift issues in Nintendo Switch game consoles, to unsticking jammed windows in Ford Focus automobiles, to dusting and cleaning components of DJI drones. Seventy years after its launch, WD-40 Company (WDFC.O) remains deliberately vague about WD-40’s actual efficacy—and even actively encourages outlandish anecdotes. For instance, its official website claims a user once successfully scared off a python hiding under their car using WD-40. This aura of mystery surrounding WD-40’s formula and function has fostered niche user communities dedicated to exploring its myriad uses—and even inspired near-fanatical devotion among some users. From rocket maintenance to everyday lubrication: steady operations Product-wise, WD-40 Company keeps industrial gears running smoothly worldwide with its flagship WD-40 Multi-Use Product. Financially, over the past 40 years, the company’s revenue and net income have grown steadily overall. While quarterly figures fluctuate, annual performance shows smooth, consistent growth without major volatility. In fiscal year 2023, the company reported $537 million in revenue, up 3.55% year-on-year; gross margin rose to 51.04%, up from 49.1% in the prior fiscal year. However, net income encountered some friction: it declined by 1.98% year-on-year to $66 million. (Note: The company’s most recent full fiscal year ran from August 31, 2022, to August 31, 2023. To align with the company’s reporting convention, this period is referred to herein as FY2023 (equivalent to the fiscal year); other fiscal years follow accordingly. Unless otherwise specified, all monetary values in this article are in U.S. dollars.) (Source: FLYING VALUE App) The FY2023 revenue growth was primarily driven by a significant increase in Q3 revenue (+14.6% year-on-year). During that quarter, revenue rose across all regions. First, revenue in the Americas grew 16% year-on-year—mainly due to a 21% rise in maintenance-product sales in the U.S., driven largely by price increases. However, unit sales declined, partially offsetting the revenue gains from higher prices. In Latin America, maintenance-product revenue rose 18% year-on-year, mainly because wholesale customers anticipated future price hikes and increased bulk purchases in advance. Additionally, the company’s direct operations in Mexico posted revenue growth, attributable to two factors: rising product prices and favorable exchange-rate effects stemming from the strengthening U.S. dollar. Although oil-sector activity in Western Canada rebounded compared to last year—boosting industrial demand for the company’s products—overall weakening demand in Canada led to a 23% decline in maintenance-product revenue there.

(26) 'Value Investing Field Notes': Case Study of a Business with an Economic Moat—WD-40, Part I

(Highlights the product’s high market penetration—or large market scale.) • Current financial condition of the enterprise: • Accounting data reveal WD-40’s exceptionally strong profitability—sustained at a high level for many years: • Consistently high operating margin (25%–30%) • Net margin (15%–18%) • Return on equity (ROE) (35%–42%) • Strategic implications for the future (if applicable): • To counteract the recent downward trend in receivables (evident over the past few years), the company has adopted the following strategies: • Broadening its product portfolio: • Acquisition of ‘Tri-Flow’ • In-house R&D of a more advanced lubricant, T.A.L.5 • Acquisition of hand-soap brand Lava • Reflection: Can these strategies generate meaningful value growth? • How the company operates and markets this business or product: • WD-40’s lubricant manufacturing, packaging, and logistics are fully outsourced. • With only 167 employees, the company supports $144 million in revenue. • At its core, it functions as a marketing-and-sales company: annual advertising and promotional expenses account for roughly 10% of revenue. • It holds no proprietary secret formula. • WD-40’s economic moat (the above analysis leads to the conclusion that WD-40 is a company possessing an economic moat): • The data above reveal all hallmark traits of an economic moat—its profitability significantly exceeds its growth value. • Therefore, the following question must be addressed (analysis of WD-40’s economic moat)—with emphasis on: • Why haven’t competitors entered the market to steal customers and force WD-40 to lower prices? What deters competitors from entering? • (1) Patents and technological barriers: • WD-40 holds no obvious patents; any company could replicate the product. • (2) WD-40’s moat lies in pronounced customer lock-in: • Customer loyalty has been built over decades through sustained advertising and high user satisfaction—making it extremely difficult for competitors to persuade customers to try alternatives. • The absence of disruptive new technologies actually benefits WD-40: competitors cannot lure users away with superior innovations or next-generation products. • Relative to product price, the cost of searching for a new alternative is high: • A can of WD-40 costs under $5 and lasts for years. • Trying a substitute that saves just $1 offers negligible appeal—given the product’s long lifespan and infrequent repurchase cycle, switching to a better alternative is inherently constrained. • Moreover, if the substitute fails, consumers lose the full $4 purchase price. Even assuming a 75% success probability, the expected gain is only $0.75 (75% × $1), while the expected loss is $1 (25% × $4)—making experimentation a losing proposition. • Beyond these marginal calculations, one must also factor in the time and hassle involved in seeking and evaluating alternatives.

WD-40 (WDFC) Reports Strong Q4 Earnings, Raises Fiscal 2027 Outlook

Oct 22, 2026

WD-40 Company reported fiscal 2026 net sales of $688 million, up 11%, driven by global maintenance product growth. Despite margin pressure from higher chemical costs, the company forecasts net sales between $715 million to $735 million for fiscal 2027.

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