Portrait source: The Motley Fool.
WD-40 (NASDAQ: WDFC)
Q1 2025 earnings release
January 10, 2025, 5 p.m. ET
Contents:
- Prepared remarks
- Questions and solutions
- Call People
Prepared remarks:
Operator
Ladies and gentlemen, thank you for standing by. It’s just the right day and welcome to the WD-40 Firm’s first fiscal quarter 365 days 2025 earnings conference call. This daily call is being recorded. Today, all participants are in listen-only mode.
During the prepared remarks break, habits can be influenced by the question and answer session. [Operator instructions] I would now like to turn the presentation over to the host for the current call, Wendy Kelley, Vice President, Stakeholders and Investors. please continue
Wendy Kelley — Vice President, Stakeholder and Investor Relations
thank you Just in the afternoon and on behalf of everyone for joining us at this time. Currently on our call are WD-40 President and Chief Government Officer Steve Brass; and Vice President and Chief Financial Officer Sara Hyzer. In addition to the money files included in the current call, we encourage investors to review our earnings presentation, earnings press release and Form 10-Q for the period ending November 30, 2024.
This documentation will be available on our Investor Relations website at investors.wd40company.com. Almost immediately after this call, a replay and transcript of the call will also be available at that time. We may discuss obvious non-GAAP measures on the current call. Descriptions and reconciliations of these non-GAAP measures are accessible in our SEC filings, as smartly as our earnings documentation, which is posted on our investor net page.
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Please be reminded that the call at this time includes statements attempting to make predictions about our expectations regarding the company’s future performance. Firm results may fluctuate significantly. The Company’s expectations, beliefs and projections are expressed in good faith, but there can be no assurance that they will be achieved or achieved. For further discussion, please see the threat components detailed in our SEC filings.
For any person watching our webcast or reviewing the written transcript of this call, please be advised that any file furnished is current only as of the current date, January tenth, 2025. The Company disclaims any obligation or duty to update any files by attempting to pre-empt the latest files, future events, or otherwise. With that said, I’d like to turn the call over to Steve now.
Steven A. Brass — Chairman, Chief Government Officer and Director
Thank you, Wendy, and to all of you for joining us this afternoon. I’ll start the day by discussing our sales results for the first fiscal quarter of 2025. I’ll also give you an update on our resolution battles and one of our strategic drivers. Following that, Sara will break down the further footprint of our first quarter results, provide an update on the anticipated divestiture of our home care and cleaning products industry and our 55-30-25 industry model, and review our outlook for fiscal 365 days 2025.
Then we can rob your questions. I’m pleased to tell you that during this time we reported increased sales of 153.5 million for the first quarter, which was a 9% increase over the first quarter over the last 365 fiscal days. In addition, we reported increased sales of repair products, our key strategic focus, of 145.5 million for the first quarter, an increase of 10% compared to the first quarter of the final fiscal 365 days, the third consecutive quarter of a two-digit number. growth in this class. Improper margin continues to strengthen, moving closer to our target of 55%.
We reported an adverse margin of 54.8% in the first quarter, an improvement of 70 basis points sequentially from the fourth quarter and 100 basis points versus the first quarter of the final fiscal 365 days. The obscene margin, excluding the impacts of the resources we currently liked to sell, was 55.4%. This increase in our breakeven margin drives higher profitability on the back end. Accumulated profit for the first quarter was 18.9 million, up 8% from the previous 365 days.
We are pleased with the solid volume performance that the Industry is currently experiencing. In the first quarter, in addition to the impact of currency, almost 90% of our growth was driven by increased sales volume. Global sales volumes confirmed solid growth in two of our better trading blocks, resulting in sales growth of 10% over the previous 365 days in the Americas and 13% in EIMEA. Asia Pacific is in a good quarter 365 days ago, down 8% in the first quarter.
Now let’s discuss first quarter sales results in dollars by division, starting with the Americas. Gross sales in the Americas, which includes the United States, Latin America and Canada, rose 8% to 69.4 million in the first quarter, compared to the same period last 365 days. Gross sales of repair products increased 9% to 65.4 million in the first quarter compared to the same period last 365 days. Most of this growth was driven by better sales of the multi-purpose product WD-40, which increased 9% over the prior 365-day quarter.
A large share of this growth is due to solid sales in the US and Latin America, which increased by 2.4 million and a pair of .3 million, respectively. In the United States, the increase was due to better sales volumes associated with successful promotional activities. Gross sales of WD-40 multi-purpose product in Latin The US benefited from our transition to a market model without delay in Brazil.
This shift in the distribution model was beneficial in increasing sales in Brazil by approximately 3.1 million in the first quarter. This increase was partially offset by reduced sales volume in Mexico due to the timing of customer orders, as well as the chilling effects of foreign replacement opportunity costs. Increased sales in the U.S. and Latin America were partially offset by decreased sales of WD-40 multi-utter in Canada, which reduced shrimp by $200,000 versus the prior 365-day quarter due to timing. customer orders.
In the Americas, sales of WD-40 Specialist increased by 1.1 million, or 16%, versus the previous 365-day period, driven entirely by new distribution and successful promotional efforts in the United States. An increase in repair products was partially offset by a 7% decline in home care and cleaning products. This decline is due to reduced promotion and promotional efforts for these brands as we shift our core level to increasing sales of repair products, which is essentially based on our four-for-four strategic framework. In total, our Americas division accounted for 45% of our global industry in the first quarter.
Now let’s loot the search files at home in EIMEA, which includes Europe, India, the Middle East and Africa. Accumulated sales in EIMEA increased by 18% to 57.5 million in the first quarter compared to the same period of the previous 365 days. Gross sales of repair products increased by 19% in EIMEA in the first quarter. The solid growth in EIMEA was primarily driven by better sales of the multi-purpose product WD-40, which increased 21% due to better sales volume in almost all areas compared to the prior 365-day quarter.
Gross sales increased the most in India, France, Benelux and Iberia, which increased by 1.9 million, 1 million, 900,000 and 900,000 respectively. In addition to the solid performance of our multi-purpose product, EIMEA also highlights solid growth of $1.2 million, or 17%, for WD-40 Specialist in the full quarter, driven entirely by better sales volume due to increased distribution and better levels of Impact Matters, particularly in Italy. United Kingdom and Iberia. Growth in repair products was partially offset by a 19% fall in home care and cleaning brands purchased in the UK. Collectively, our EIMEA division accounted for 38% of our global industrial share in the first quarter.
Now to the Asia Pacific. Gross sales in the Asia-Pacific region, which includes Australia, China and various international locations within the Asia location, fell 4% to 26.6 million in the first quarter, compared to the same long last 365 days. Despite the decline in 365-day sales over 365 days, the first quarter of fiscal 365-day 2025 is the second most practical sales quarter in the division’s history. The 365 days vs. 365 days decline was driven by decreased sales of the multi-purpose WD-40 product in our Asian distributor markets, where sales were down $2.6 million compared to the prior 365 days quarter.
In the first quarter, our Asian distributor markets saw a decrease in sales volume due to the timing of customer orders. Remember, our distributor markets in Asia actually had a solid fourth quarter and sales of WD-40 multi-purpose products were up 51% in the fourth quarter. Advertising and marketing distributor customers, particularly in Indonesia, South Korea and the Philippines, which placed clear orders in the fourth quarter, did not repeat those orders in the first quarter. It has to do with timing here and we wonder if the project will come together in the second half of the 365 days.
In China, sales of our WD-40 multi-utter product increased by 13% or 1 million in the first quarter, driven entirely by successful promotional activities and marketing activities that resulted in increased sales volume. In Asia Pacific, sales of WD-40 Specialist rose 2% in the first quarter. In China, sales of WD-40 Specialist increased by 24% compared to the previous 365 days mainly due to new distribution. The decline in repair products was partially offset by a $400,000 increase in sales of home care products and cleaning products purchased in Australia.
In Australia, our portfolio of home care products boasts a solid performance presence, a solid aggressive edge and substantial opportunities for growth and [Inaudible] in total, our Asia Pacific segment accounted for 17% of our global industry in the first quarter. Now let’s talk about our rescue battles. Our resolution battles focus on what we build to increase sales and profitability. Beginning with rescue fight no. 1, leading geographic expansion.
In the first quarter of 2025, global sales of the all-purpose product WD-40 were approximately 119 million, representing a 10% increase over the same length of the last 365 days. We achieved 21% growth in our typical effect in EIMEA and 9% growth in the Americas. This growth was partially offset by a decrease in sales in Asia Pacific. I find it amazing that even after 71 years, the opportunity to expand the multipurpose WD-40 product remains so important.
Th Using our proprietary algorithm, we found that the global comparative sales adverb st for the multipurpose product WD-40 about 1.6 billion. Based on this truth, approximately US$1.2 billion of growth opportunities remain worldwide. This is where my management team and I essentially focus our effort. Our mission is to unlock opportunities that deliver significant shareholder value.
The company will build this by accelerating our global expansion. Today, I’d rather focus on a couple of our priority markets, starting with the markets that drive our growth in the Americas. In 2020, we took over the confirmation of the Mexican market. And since we’ve done that, we’ve now almost quadrupled our industrial production in Mexico from 6.8 million to almost 26 million in PL ’24, and we’re no longer successful because we see Mexico as a $30 million to $40 million market in the future.
Regardless of short-term fluctuations, our long-term success in Mexico has given us the confidence to transform Brazil into a March 2024 market without delay. At this level, we are extremely happy with the current growth that we like in Brazil. We grew Brazil by $7 million in FY ’24 and are looking for another $7 to $9 million of growth in FY ’25. We are inquiring that Brazil will become a $20 million+ market in three to five years, and that it will be as clear as Mexico in the next 10 years.
Intelligent in the Asia-Pacific region, we have now identified several high-reach markets in the Asia-Pacific region, in addition to China, Japan and Indonesia. Indonesia is a fast growing market for us with a compound annual growth rate of over 7% over the past five years. Indonesia is also now one of our largest distributor markets on the planet. It’s also weird because it’s one of our first hybrid markets.
This arrangement we now want to get every famous domestic marketing distributor, but also the WD-40 Firm staff group available on the market, a formula that has proven to be very effective for us. In addition, China has consistently delivered solid growth in the Asia-Pacific region for most of the past years. Now we have been established in China since 2006 and as a very capable group of about 60 workers there. In China, we offer a simple but effective system.
We are ramping up distribution, focusing on double-digit growth in distribution aspects while sampling over 20,000 factories every 365 days. This agreement continues to confirm good results for us. And within that, in EIMEA, we have now identified several highly attainable markets in the situation beyond India. India is now one of the most morally inviting growth markets on the planet, if not more.
Since entering into our strategic partnership with our domestic companion six or so years ago, we are now looking to more than double our sales in India, making it our second largest market in terms of unit sales, and we see huge scope for further growth. This increased focus in our key growth markets across the board continues to deliver success. And in fiscal 365 days of 2025, we can continue to invest in building our leadership impact with pause customers across the board. Next is the fight for resolution number two, the acceleration of premiumisation.
Our second struggle to solve is to get away from selling the premium codecs of the WD-40 multi-utter product. For us, premium increases are the main driver of our revenue growth, both smartly and damaging margin increases. Our premium products are loved by pause customers across the board. In the first quarter, sales of WD-40 Refined Straw and EZ-REACH were up a combined 17% over the previous 365-day stretch.
With premium codecs accounting for only about 40% of global sales of multi-origin WD-40 products, there is a significant upside for growth. Based on the work going forward, we will focus on a compound annual growth rate of greater than 10% increase in sales of premium products. Our third rescue fight is to drive the growth of the WD-40 specialist. In the first quarter, sales of WD-40 Specialist products were 19 million, or 14% versus the same period last 365 days.
We saw WD-40 Specialist product growth in all three alternative blocks, with particularly solid growth in the Americas and EIMEA, where sales were up 16% and 17% respectively. We weaken the same algorithm for WD-40 Specialist as we weakened for the WD-40 multi-origin product. We have now determined that the global comparative sales opportunity for WD-40 Specialist is approximately 605 million. Based on this truth, approximately $530 million in worldwide growth opportunity remains for WD-40 Specialist.
On a moving forward basis, we will focus on a compound annual growth rate to obtain WD-40 Specialist sales greater than 15% in reported currency. Our latest battle to save is the turbocharged digital store. We view digital commerce as an accelerator for all of our various resolution battles. In the first quarter, e-commerce sales were up 22%, driven entirely by solid growth in EIMEA.
We are acting in wonderful support of this rescue fight to increase impact awareness and engagement online, potentially leading to improved procurement and better sales across all channels, in every store and online. And now, turning to the second component of our four-by-four strategic framework, our strategic enablers, which focus on operational excellence and collectively support our resolution battles. I will not go over all of our strategic factors at this time because we honestly shared a reliable update with investors on our 365-day hiatus. That being said, we printed our ESG 2024 file fairly correctly during the November break, so I have to provide an update on strategic factor number two, which is the invention of long-term industrial for the future.
WD-40 has long been dedicated to cause-driven growth. We are committed to operating our industry in a system that provides stability between financial growth, environmental impact and social well-being, which might motivate the collection and ensure long-term stakeholder price protection. I am very proud that we have now publicly announced our sustainability targets after a truly in-depth project, putting together our fundamentally science-based plan to achieve carbon reduction. In our November ESG filing, we committed to achieving a 50% absolute reduction in Scope 1 and Scope 2 emissions by 2030, along with a 10-20% absolute reduction in Scope 3 emissions by 2030.
Now we also like to reveal shrimp print on the science-based timeline and environmental impact we are issuing to achieve these goals. Many of our workers are eager to steer our organization into an extremely sustainable future, and I strongly advocate that environmental external goals will drive the organization to drive significant future-proof growth for the organization. With that, I will now turn the call over to Sara.
Sarah Hyzer — Vice President, Chief Financial Officer
Thanks, Steve. Today, I’ll break down an update on the announced divestment of our home care and cleaning products business in the Americas and the UK, provide insight into our industry model, and review some highlights from our first quarter results. While our broad 365-day 2025 guidance remains unchanged, I will provide some additional color on our outlook. But first, I need to chat about the new mantra you’re hearing right now in the halls of the WD-40 company: Few things, many areas, stronger effect.
This mantra was born from a longstanding strength of the company: the core level. A few things, many areas to achieve greater impact have been central to our product system in the past. Through fiscal 365 days in 2024, nearly 90% of our revenue and growth came from sales of WD-40 and WD-40 Specialist multipurpose products. We see significant growth opportunities for these product lines.
With about 650 workers, we want everyone to wake up every morning angry about how to develop a blue-yellow effect with a tall red shrimp. This mid-level design is hard to find and incredibly invaluable, and was the driving force behind our decision to divest our US and UK home care and cleaning brands. This quarter we met all of your requests to classify the resources we intend to sell as held for sale on our stability sheet, indicating growth in this hosting. While I don’t want to give you any more intensive information on the current time regarding the intended divestment, I will share with you that we will continue to grow the transaction.
The investment bank we like now has gotten engaged and continues to like talk with available suitors on our behalf. While there is no certainty as to the identification of the buyer as we go to market, we expect to undoubtedly complete the divestment of these brands in the coming months. Further updates to the divestment project can be presented as acceptable. A few things, many areas of greater impact are now being used alongside our product system and driving operational efficiency across our industry.
We rely on this mantra to streamline our methods and processes and drive better global collaboration. Later in these 365 days we will be able to work towards introducing two additional areas into our new ERP machine. We are interested in standardization and processes that respect project and portfolio management, along with streamlined approaches to decision-making that drive resolution. Finally, we now want to lay the groundwork for a move with additional purpose toward productivity improvements by organizing global centers of excellence alongside core IT areas.
We are working towards one day when the various groups collectively leverage their shared capabilities and skills at a central level for our long-term growth needs. A few things, a lot of areas, a greater impact might additionally want a tangible impact on our industry model, and we continue to make significant strides in our adverse margin restoration. Our 55-30-25 industry model is a reassuring long-term beacon that we will eventually change direction and align with. In the short to medium term, we continue to diversify each basic lower part of the model.
To begin with, let’s find the files before the entire quarter of the harmful margin. We are targeting 50% to 55% for the breakeven margin, but now we want to make the substantial growth that comes from ending the pause on this change. In the first quarter, our loss margin was 54.8%, as opposed to 53.8% for the last 365 days. This represents an expansion of 100 fundamentals, essentially driven by the effect of a favorable sales mix and various different combination effects that positively impacted our loss margin by 140 fundamentals 365 days over 365 days.
Lower prices related to strong chemicals also had a positive impact on the loss margin for 60 basic aspects. These apparent margin impacts were partially offset by better pricing related to warehousing, distribution and freight rates, primarily in the Americas, which negatively impacted our margin by 100 basis points. I am also pleased to share with you that the loss margin has been steadily strengthening in each trading bloc, EIMEA and Asia-Pacific, this quarter. Internal EIMEA, the harmful border has improved 290 fundamental aspects against the same length of the last 365 days to 57.8%.
The Asia-Pacific region also improved aspects of the adverse margin 130 over the past 365 days of the same length to 57.6%. In America, the harmful rate reduced a piece of shrimp by 30 basic aspects to 50.4%. All in favor of our most recent direction, the popular price environment and macroeconomic components, we continue with a medium focus on achieving a 55% adverse margin to the fiscal 365-day break in 2026 in popular markets. Still, if we look at the value landscape, the timing of the implementation of the pricing initiatives in the supply chain, and if we are successful in divesting these home care and cleaning brands, we would probably make this draw even sooner, probably by the fiscal 365 break. 2025, after divestment.
Unique this fiscal 3 65 days, the restoration of adverse coverage is a central focal level for senior management, who will be incentivized to restore adverse coverage to 55% and above, regardless of the impact of assets committed to sales. Now let’s turn to our ind value of the Austrian business, which we define as total labor prices, less adjustments for obvious non-cash prices. Industrial workload is how we measure how efficient we are at our industrial work. It basically consists of three areas: investment in our workers, investment in building our impact, and transportation costs to get our products to our customers.
We are targeting 30% to 35% sets as a share of revenue for the cost of industrial operations. This quarter, our industrial business value was 37%, as opposed to 36% over the last 365 days of the same length. On an absolute dollar basis, our industry business value increased by 7.5 million, or 15%, due to better labor-related rates, higher legitimate provider rates, better credit losses from our client division and higher freight rates. In addition, investment originating from construction activities increased in length.
As a share of sales, our investment in A&P was 5.5% versus 5% in the first quarter prior 365 days, but basically based on our fiscal 365 days guidance. Over time, as sales evolve, we look for improvements in industrial production value, which is really a major component in managing our industrial value towards our long-term target of 30% to 35%. Now to Adjusted EBITDA. In the first quarter, our adjusted EBITDA margin was 18% versus 19% over the same length of the last 365 days.
Even so, EBITDA grew by nearly 4% over the past 365 days, even at steeply higher prices. As we like to mention before, if we successfully sell the home care and cleaning brands that we actively market, everyone knows that we will need some time to digest the impacts. Nevertheless, we continue to intervene so that we can motivate the adjusted EBITDA margin to our medium-term target, which varies from 20% to 22% in the medium term. Now let’s discuss operating profit and earnings per share as smart as the next tournament that will affect our reported results next quarter.
Operating profit improved to 25.1 million in the first quarter, an increase of 4% compared to the first quarter of 365 days. In addition to the effects of assets currently held for sale, operating income would have decreased by $1.5 million. Diluted EPS for the quarter was $1.39 compared to $1.28 for the last 365 days of the first quarter, which was an increase of 9% compared to the first quarter of 365 days. In addition to the effects of resources allocated to sales, diluted earnings per share would have decreased by $0.08 per fragment.
Our diluted earnings per share shows 13.6 million weighted life like shares outstanding. Now, I’d like to introduce you to a non-monetary subsequent tournament that will materially impact our every other quarter and monetary 365 days 2025 earnings and earnings per share. In fiscal 365 days of 2019, we took a dangerous tax space related to the Tax Cuts and Jobs Act, specifically to calculate the one-time toll for unremitted foreign earnings. This resulted in a decrease in earnings in 2019.
With the popular expiration of the federal laws in December, after our first quarter, the company launched an unrecognized tax support associated with this truly major one-time toll tax. The initiation of this tax incentive will result in a favorable income tax adjustment of 11.9 million, the benefit of the federal incentive, for fiscal 365 days 2025. We can motivate this as a non-GAAP adjustment in the second quarter. Now, a passing reminder of the adjustments we like now that will affect the effects of foreign substitutes during these 365 days.
The currency of convenience for our UK branch, which consolidates results for the EIMEA alternative bloc, has long been the pound sterling. We reassess this every year. While we are looking for files from this 365 days and past days, shifts in the working environment within our EIMEA location, along with the obvious strategic actions we are taking, have required a replacement in our convenient currency.
Our decision was influenced by approximately the key element, together with the increasing reliance on Euro-denominated inventory in our supply chain and the increase in Euro-linked selling and operating prices. As a result, with the introduction of these 365 days, we changed the convenient currency of our UK branch from Pound Sterling to Euro, with the alternative being used going forward. Because this alternative, we use a final-to-fixed technique over all fiscal 365 days in 2025 to estimate the impact of the foreign replacement alternative cost interpretation on the current length of the U.S.
dollar profit, especially for our EIMEA division. The Americas and Asia and Pac segments were not affected. With the introduction of fiscal 365 days 2026, we are requesting a return to our old methodology of estimating entirely fixed currency numbers. Now let’s find the files from our capital allocation system.
Our flexible, low-asset business model, along with the actions we’ve now taken to develop our top line while improving our loss margin, all contribute to asserting solid stability and liquidity headroom. Promulgating a disciplined and balanced capital allocation regime remains a priority for us. For the foreseeable future, we require repair capital costs of between 1% and a couple of % of sales per fiscal 365 days, which is entirely dependent on our asset-light system. We continue to provide capital to our shareholders through smart dividends and buybacks.
Annual dividends will continue to be our priority and are focused on more than 50% of profits. On December 11, our board of directors authorized a quarterly cash dividend of $0.94 per share, reflecting a 7% increase from the prior quarter’s dividend of $0.88 per share. At some point in the first quarter, we repurchased approximately 13,750 shares of our stock at a total cost of approximately $3.6 million under our most recent fragment repurchase determination. In the first quarter of fiscal 2025, we returned a total of approximately $16 million to our shareholders through partial repurchases and dividends.
Now, we turn to FY ’25 guidance. As a reminder, we issued this 365-day guidance on a pro forma basis, excluding the cash impact of the home care and cleaning brands, which are currently classified as assets for sale. While the exact timing of the transaction remains uncertain, we believe this deal will provide investors with clarity on the course of the core industry and encourage a reduction in noise surrounding the transaction. I encourage investors to review our earnings presentation for the first quarter of 365 fiscal days 2025, which includes a pro forma hour.
Based on this truth, our guidance for fiscal 365 days 2025 is unchanged and we estimate incremental sales growth for legitimate 2024 form results to be between 6% and 11%, with incremental sales between 600 million and 630 million after adjusting for translation effects foreign substitute. The improper margin is said to be between 54% and 55%. Investments in advertising and promotion are expected to represent a spherical 6% of profit from sales. Current profit is expected to be between 95 and 100 million, which represents a growth of between 6% and 12% compared to the legal results for 2024.
The provision for income tax is expected to be a spherical 24%. Diluted earnings per share are expected to be between 5.20 and 5.45, which is in step with an estimated 13.5 million weighted life shares. This difference represents a growth of between 9% and 14% compared to the legal results for 2024. These instructions do not foresee major adjustments to the popular financial environment.
Unexpected inflation headwinds and various contingencies would likely affect our fiscal 365-day 2025 clock.We are not successful in the tournament in divesting assets currently held for sale, and our guidance would be positively impacted by approximately $23 million in sales proceeds, 6 million in operating income and $0.33 in diluted earnings per share on a 365-day basis. This concludes the monetary review. Now, I’d rather turn the call as motivation to Steve.
Steven A. Brass — Chairman, Chief Government Officer and Director
Thank you, Sara. In conclusion, we are pleased with the current growth we have achieved this quarter, which is a strong start to our fiscal 365 days and is in line with our long-term goals. In summary, what did you hear from us on this call? You heard that sales of repair products were up 10% in the first quarter, marking the third consecutive quarter of double-digit growth in this category. You heard that sales of WD-40 multipurpose products were up 10% in the first quarter.
You heard that WD-40 Specialist sales were up 14% in the first quarter. You’ve heard that we’re pleased with the solid volume performance that the industry is experiencing and that in the first quarter, almost 90% of our growth came from increased volume. You’ve heard that the administration’s mission is to unlock opportunities to achieve significant shareholder value and that capabilities have increased at a core level in our key growth markets around the world. You’ve heard that we’ve now publicly announced our sustainability goals after a truly in-depth project, putting together our science-based plan to achieve carbon reduction.
You’ve heard about our company’s new mantra, “Fewer Things, Many Areas, Greater Impact,” which is expected to drive operational efficiencies as we evolve. You’ve heard that we’re extremely happy with the improvements that we like right now, down to the damaging margin, and that it’s continuing to get closer to our goal of 55%. You have heard that we are continuing to grow within the sale of our home care and cleaning products industry, which are currently on sale, and are inquiring about a full divestment in the coming months. You heard that we raised our dividend last month and returned approximately $16 million to our shareholders in the first quarter.
You’ve also heard us reiterate our broad fiscal guidance for 365 days to 2025. Thank you for joining our call at this time. We will be happy to answer your questions now.
Questions and solutions:
Operator
[Operator instructions] Our first impact comes from Daniel Rizzo’s Toll Road with Jefferies. Please proceed with your effect on the matter.
Daniel Rizzo — Jefferies — Analyst
What’s up, everyone. Thanks for addressing my effect. I was honestly right when I tried to design Q and things that appreciated it. I’ve been trying to get operating profit and I’ve seen that Americas is down 11% over 365 days and I insist that’s partly due to the reduction in EBITDA margin.
I was wondering what this is attributed to, if there’s something special there or, I’m putting together, I don’t know anymore, fair right, there’s some color likelihood you’ll present.
Sarah Hyzer — Vice President, Chief Financial Officer
What is it, Daniel. This is Sara. So, certainly there would probably be a couple of things that would affect that. The first is time.
You are looking for files on the A&P schedule for the first quarter of this 365 days as we contrast the last 365 days before our flight in America for the first quarter. Additionally, I mentioned during the call that there is a chapter with one of our clients. And 100% of what was about $800,000 hit the US trade bloc. So, these two are higher items.
We actually like the timing of our growth rewards program, which accrues at the next level in the first quarter as opposed to the previous 365 days.
Daniel Rizzo — Jefferies — Analyst
Okay, that’s valuable. And then what you just mentioned, I’m relaying, I forgot to write down, 55% harmful rate by 2026, but you’re inclined to be at 54.8 already. And I realize that where you mentioned there may be an arrangement before. However, I was wondering if your adverse case suggests that there will be some incentive, perhaps due to better logistics or storage prices.
Or how should we intervene on this? Because, I think, it indifferent views that the break of ’26 is indifferently distant.
Sarah Hyzer — Vice President, Chief Financial Officer
yeah Even honestly doing the right thing motivates 365 days, our margin can fluctuate, you know, dramatically dramatically quarter to quarter, looking at our sales mix and our product mix. So even if we were trying to motivate through Q1 the final 365 days, we actually had a solid quarter margin coming out of Q1, a little bit of a dip, and then our motivation arrangement was a tick. So, this is actually a good start.
Obviously, we’re seeing slightly better pricing on the freight and logistics side of the US, but we’re cautiously optimistic about maintaining margin through the release of these 365 days. So that’s why we’re — we’re definitely predicting that by the next 365 day break, we’re confident about that, but we’re relaying now that we have a good chance of getting there sooner than that 365 day break.
Daniel Rizzo — Jefferies — Analyst
All moral. Thank you very much.
Sarah Hyzer — Vice President, Chief Financial Officer
OK.
Operator
Your next effect comes from Linda Bolton-Weiser’s Toll Road of WD-40. Please proceed with your effect on the matter.
Linda Bolton-Weiser — DA Davidson — Analyst
Sure, hello. Happy unique year. So, I was asking, sorry if you provided a couple of details about your 365 day over 365 day increase in PSA costs. I’m no longer sure I caught your overall shrimp footprint, but it sure seemed like, you know, you appreciate a massive 14% 365 day 365 day increase.
So I’m curious, is this the escape rate to ask for all 365 days? Or was there something in the quarter that alternated and disappeared, or something in the last quarters of 365 days? thank you
Sarah Hyzer — Vice President, Chief Financial Officer
What’s up, Linda? This is how the chapter we had with one of our clients in America came about. So, this tends to be the one time that hits the most primary. We are also gathering in this 365 days in the next growth reward program as we have been in the last 365 days.
So prices are expected to be higher in this case. However, this is included in our guidelines for those 365 days.
Linda Bolton-Weiser — DA Davidson — Analyst
Can you quantify the one-time break in millions of dollars that this chapter had in the quarter?
Sarah Hyzer — Vice President, Chief Financial Officer
The chapter in the quarter was about 800,000.
Linda Bolton-Weiser — DA Davidson — Analyst
Okay, thanks. And then I’m interjecting that you mentioned that this pause had a somewhat obvious break on the high line within the quarter. Can you update your thoughts on this? I insist, how does it fare in the last part of 365 days? Does it develop into harmful? For example, how has it changed when it comes to your projection for that sales line item? thank you
Sarah Hyzer — Vice President, Chief Financial Officer
Yes, when we look for Q1 morale run files now, when contrasted with the last 365 days of Q1 run, globally, the trend is positive for us. Although you search for files from other blocks of a person, especially in America, precisely with Mexican pesos and Brazilians, it affects us negatively. So that was offset by the obvious impact on those currencies in various areas. On the off chance that you chased files on charges in the present time and robbed a dramatic search for files on the charges in the present time and announced that for the release of 365 days we will count on this globally will rob the plant that it will then be as an adverse effect if we announce it for relaxation of 365 days on the current cost when you compare it with the corpulent 365 day cost from the previous 365 days.
Linda Bolton-Weiser — DA Davidson — Analyst
Okay, thanks. And then I’m passing along that your 10-Q of the US advances in the quarter was mentioned. It appeared that this may have benefited sales of more products in the quarter.
Can you add an extra color to this? And you will understand that as a carryover of some sales from the second quarter to the first quarter? thank you
Steven A. Brass — Chairman, Chief Government Officer and Director
What is Linda, let Steve be. So, no, I don’t think I’m mediating anymore, maybe there’s something else to confirm when it comes to clear volume promotions that actually increased sales. I’m actually mediating in most cases, especially the residential mid-channel in the US has become very, very solid.
Our retail sales are collected in most cases. Our unit sales at the POS level were up 4%, 5% in the first quarter. And so, yes, we were very impressed with the design of the switch in the form of visitors to the retail site, and the DIY project looks set to improve. And so we see that evident after the first quarter.
Linda Bolton-Weiser — DA Davidson — Analyst
OK. And then, honestly, when it comes to the cadence, I know you don’t have to get into the quarterly form management anymore, but the cadence — I mean, you certainly like the easy build — the easier comparison, the preferred comparison within the second quarter. And I’m not going to keep in mind what this happened to – was it after you had the shrimp bubble associated with the SAP implementation? I’m not going to keep more moderate in mind, but it seems like there might be a simpler form of comparison, each on sales and a little shrimp on profit growth. You can honestly remind us —
Sarah Hyzer — Vice President, Chief Financial Officer
of course.
Linda Bolton-Weiser — DA Davidson — Analyst
What — what was that? yes
Sarah Hyzer — Vice President, Chief Financial Officer
Sure, Linda, very good memory. So, of course, that was the quarter that we stayed with our ERP, and we disclosed about $2.5 million in impact that quarter that we learned on our own — with disruptions on the break line. So, that’s the vast majority.
Linda Bolton-Weiser — DA Davidson — Analyst
So, theoretically, it’s likely that you might like the following form of esteem — so if your growth rate in the U.S. or — or, I don’t know anymore, your overall sales growth was — what was it in the quarter, 9%. So, in theory, it would even be better in the second quarter because you’ve got that simple comparison, all else being equal. Is this a technique for this?
Steven A. Brass — Chairman, Chief Government Officer and Director
I’m letting you know that you got some warnings. The first is that the revealed last quarter of the Asian distribution markets is off to a slow start. That was to be expected. And so we request to gather in the motivational half of 365 days.
Europe is, you know, outside the gate, very solid. We request to proceed even assuming we gather stand up in the last half of the 365 days in some moderately disturbing comparisons compared to the previous 365 days. And then, of course, Brazil influences. And so, now to be fair, we actually had a solid start in Brazil with over $3 million of growth in the first quarter.
We need to achieve this again and again compared to the previous 365 days, something equal or better in Q2. And then, obviously, that starts to taper off in the third and fourth quarter as we fly through our — or if we confirm Brazil in the third and fourth quarter.
Linda Bolton-Weiser — DA Davidson — Analyst
thank you This is very valuable. And then, just to clarify, once you’re no longer selling pure industry until the break in the second quarter, will it or won’t it be removed any more because you tend to like the discontinued operation? Or will it be inside once you put it together you won’t sell it anymore?
Sarah Hyzer — Vice President, Chief Financial Officer
No, it won’t matter if we put it together and don’t sell it anymore. So this is no longer a big enough strategic shift to qualify for suspended operations. So, if he’s no longer indifferent to the Q2 break, he’ll be indifferent to the results we report. We’d like the same reporting mechanism and we’re going to try to be very transparent, so it’s likely that you might build a watch with and without a watch.
Linda Bolton-Weiser — DA Davidson — Analyst
It’s possible, I have. And then, I interject, yes, you’ve really had a good effect in the UK, Italy. You named a couple of areas there. Is that — is there anything else that confirms that it’s driving that market in Europe in terms of the strength that you just see there?
Steven A. Brass — Chairman, Chief Government Officer and Director
So Europe, the fair right to everything was solid in operation across Europe. I will no longer actually have anything else that has not actually come into being. The UK has been a bit flat as opposed to two different markets, you know, a wonderful performance and all our bailout battles have been going very strongly.
So, within the first stretch of 365 days, there are quite a few shrimp where we had the form of distribution losses that are indifferent and motivated in the first half of the 365 days. Maybe one client that maybe had a positive impact in the first quarter with just under $1 million discovered maybe and has to continue like that form of shrimp impact when there is an increase in the first half of the 365 days. Regardless, you know, EIMEA is motivating in a growth mode, you know, fair enough because it was — you know, it’s motivating to where it was before as a form of loss of Russian industry and inflation. So we’re seeing very, very solid growth from Europe.
Linda Bolton-Weiser — DA Davidson — Analyst
Okay, then thanks. This is serious about me. thank you
Steven A. Brass — Chairman, Chief Government Officer and Director
thank you
Sarah Hyzer — Vice President, Chief Financial Officer
Thank you, Linda.
Operator
Ladies and gentlemen, this is our time for questions. [Operator signoff]
Duration: 0 minutes
Call the contributors:
Wendy Kelley — Vice President, Stakeholder and Investor Relations
Steven A. Brass — Chairman, Chief Government Officer and Director
Sarah Hyzer — Vice President, Chief Financial Officer
Steve Brass — Chairman, Chief Government Officer and Director
Daniel Rizzo — Jefferies — Analyst
Dan Rizzo — Jefferies — Analyst
Linda Bolton-Weiser — DA Davidson — Analyst
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