What happened

WD-40 (WDFC -2.16%) shareholders lost ground to a rising market this week, with the stock dropping 9% through late trading on Thursday afternoon. The consumer products specialist announced earnings that weren't well received by Wall Street.

So what

WD-40, which produces home and automotive cleaning products, announced that sales fell 3% in the quarter that ended in late August after accounting for currency exchange shifts. Earnings declined 57% compared a year earlier.

A mechanic fixing a motorcycle.

Image source: Getty Images.

In a conference call with investors, CEO Garry Ridge said that the slump was mainly due to normal volatility associated with the business, which has been amplified by the pandemic. Still, Wall Street was hoping for better news on both the revenue and earnings fronts.

Now what

Management projects a strong year ahead, with sales likely to land between $522 million and $542 million, equating to gains of between 7% and 11%. That result would represent a slowdown from the 19% surge that WD-40 enjoyed in fiscal 2021.

Gross profitability will continue declining as well, dropping to between 53% and 54% of sales compared to 54% last year and 54.6% in fiscal 2020.

Those forecasts describe a business that's still growing, but one that is slowing while feeling pressures from cost and supply chain challenges. The challenges help explain why WD-40 stock fell this week, and why it has trailed the market so far in 2021.