The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Daniel Rizzo - Jefferies - Analyst
: Everyone, thanks for taking my question. I was just going through the deck. And one thing I noticed is that I think in the second half of '24 there
was some, I think pricing was a bit of a headwind, I think [2% to 1%]. I can't find it right now. I was just wondering what that was. That's just
promotional activity or if it's something else.
Sara Hyzer - WD-40 Co - Chief Financial Officer, Vice President - Finance, Treasurer
Hi, Dan. It's Sara. So, yes, there was a little bit of a swing in the back half of the year. Most of that is going to be mixed. It's hard right now for us to
break out mix from that metric. And so there's nothing significant on a pricing that went backwards, it's going to all be mix related.
Question: Daniel Rizzo - Jefferies - Analyst
: Okay. And then one final question, then you had good success with moving to a direct business model in Brazil, Mexico and elsewhere. I was
wondering where the other opportunities to do that are? And if we expect more announcements like that within, I don't know the next year or so,
how should we think about it?
Question: Daniel Rizzo - Jefferies - Analyst
: Thank you very much.
Question: Linda Bolton-Weiser - D.A. Davidson - Analyst
: Yes, hello. Thank you. Congratulations on a really strong quarter and year. So just to make sure I understand this, your guidance for the next fiscal,
the dollar figure amount like operating profit of $95 million to $100 million. Does that assume that the household cleaning business is not in for
any of the year? Is that correct?
Sara Hyzer - WD-40 Co - Chief Financial Officer, Vice President - Finance, Treasurer
You have that. Yeah, Linda, that's correct. We've excluded it for the full year just given the uncertainty of the timing and then provided you with
some information of what it would, what the difference would be if it was included for the full year. So you have it kind of both with and without.
Question: Linda Bolton-Weiser - D.A. Davidson - Analyst
: Okay, great. And then I guess then with that, I mean, your gross margin in 2024 was 53.4%. So I guess I'm wondering about the guidance of 54%
to 55%. If you're getting a list of 60 basis points from the divestiture, why wouldn't that guidance be like higher? I guess I'm trying to understand
that.
Sara Hyzer - WD-40 Co - Chief Financial Officer, Vice President - Finance, Treasurer
Well, most of the move that we've had in the last couple of years has come from price with premiumization and supply chain initiatives being lesser
of an impact. We are starting to now see the efforts of some of those supply chain initiatives that we've implemented both this year and then also
plan to implement next year. Those just have a smaller immediate impact to the margin. So we do intend to make improvement to the margin. It's
just going to be at a lesser scale than it was for this year.
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Question: Linda Bolton-Weiser - D.A. Davidson - Analyst
: Okay. And then, so usually you have a like an oil price assumption that's baked in. Can you give what you're including in the guidance for oil price
assumption?
Sara Hyzer - WD-40 Co - Chief Financial Officer, Vice President - Finance, Treasurer
Sure. The range right now we have is between $70 and $90.
Question: Linda Bolton-Weiser - D.A. Davidson - Analyst
: You mean, in terms of the incremental growth versus prior year?
Question: Linda Bolton-Weiser - D.A. Davidson - Analyst
: Okay. And just let me ask you a little bit about China. I mean, I can't quite remember what you said it was in the quarter. It seemed like it was pretty
strong and I think you said 17% for the year. So are you know, the economy there is just so weak and all that's all we hear about every day. But it
doesn't seem to be affecting your business. Is it just that you have so much growth opportunity that you're immune from the macro or maybe
could you give a little more color?
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Question: Linda Bolton-Weiser - D.A. Davidson - Analyst
: Okay. Well, I guess that's all I have then for now. Thank you very much.
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