WD-40 Company (NASDAQ:WDFC) Q2 2020 Earnings Conference Call - Final Transcript
Apr 09, 2020 • 05:00 pm ET
[Operator Instructions] Your first question comes from Linda Bolton Weiser with D.A. Davidson. Your line is open.
Linda Bolton Weiser
Yes, hi. Thank you for your commentary, Garry and Jay and Steve. So, I guess, I was most struck by Steve's comment that March was similar to previous March results. So I guess, you're kind of saying that sales were flattish, not significantly down. I find that hard to believe, given that we've had a suspension of almost all non-essential manufacturing in the United States and other countries. So can you just kind of give us a little more color? And also, we've had a lot of investors ask us about a breakdown of your demand by end market. So, like how much is automotive, how much would be high-tech, manufacturing, different end market demand. Do you think you could give a little color on all of that? Thanks.
Thanks Linda. We were pleased with being able to hold up in March. And I guess, it does really reflect on our multiple trade channel, multiple country business strategy. As far as trade channels of concerned, I'll ask Steve just to give a high level view of the key channels that we operate in.
Sure. Thanks Garry. So, as Garry said, one of the big advantages of WD-40 Company is that we are diversified, both by trade channel and by geographies. No one trade channel, customer or geography is -- we're not overly reliant. The biggest markets we operate in are automotive, DIY, hardware. E-commerce, as we mentioned on the call, is a fast growing channel, both in terms of percentage growth and also dollar volume, so -- and then industry as well, being the big four. But the beauty is the diversification. And so, no one of those trade channels has an overbearing weight on the overall revenues.
Linda Bolton Weiser
So, do you expect -- I mean, are you seeing anything in your end markets that indicate that -- because the decline in China was quite significant. So, is it just the rest of the world is slower in seeing the impact in your results? Or is it just something different that's going on in the rest of the world versus what went on regarding COVID-19 in China?
I can give you some color on that, Linda. The down -- what happened in China was due to planned shipments that we had that were to go out to our customers straight after Chinese New Year. We had a substantial order book in place. And as is customary, China kind of waits till after Chinese New Year to renew themselves and to take on that inventory. And so, if the COVID hadn't happened, we would have shipped those orders. So it wasn't an end user demand issue. It was our inability to ship that caused the sudden downturn in China. China started to shut down around January 17 and was out right through to -- well into February. And we didn't -- we weren't able to ship