WD-40 Co., maker of the namesake lubricant and of the Lava and Solvol soap brands, said Monday that its third-quarter profit fell 24% because of higher marketing expenses and unfavorable exchange rates.
Net income for the quarter ended May 31 fell to $3.71 million, or 24 cents a share, from $4.91 million, or 32 cents, a year ago. Sales rose to $42.7 million from $38.3 million a year ago.
San Diego-based WD-40 raised its spending on advertising and sales promotions to $6.91 million in the third quarter, 70% more than a year ago. The increase was for newly acquired brands and the overseas introduction of older brands, said Garry Ridge, president and chief executive.
"Most of the higher expenses were related to the launch of Lava in the U.K. and to the promotion of our new acquisitions, X-14, 2000 Flushes and Carpet Fresh," Ridge said. "These brands are sold through the grocery-trade channel and require a higher investment in terms of marketing."
The weak British pound and other currency fluctuations have reduced year-to-date earnings by about 3 cents a share, Ridge said.
WD-40's shares fell $1.54 to close at $20.90 on the New York Stock Exchange. The third-quarter results were released after the close of regular U.S. trading.