06:24 AM EDT, 04/10/2024 (MT Newswires) -- WD-40 ( WDFC ) shares dipped early Wednesday after the maker of lubricants and cleaners flagged near-term revenue headwinds as it pursues a potential sale of its US and UK homecare and cleaning products portfolio.

The company plans to use the net proceeds from the potential sale to reinvest in its core business for long-term growth, Chief Executive Steve Brass said during a conference call to discuss fiscal second-quarter results, according to a Capital IQ transcript. "While this will have an unfavorable impact on our sales in the short term once we divest the portfolio, it allows us to place even more focus on creating revenue growth," Brass said.

Last month, the company agreed to acquire its Brazilian marketing distributor and long-time business partner Theron Marketing. The "immediate accretion" of the deal and additional investments the firm will make is expected to offset lost revenue over time, Brass said.

For the three-month period ended Feb. 29, WD-40 ( WDFC ) reported per-share earnings of $1.14, down from $1.21 the year before. Sales increased 7% to $139.1 million. The stock was down 1.1% in Wednesday's premarket activity.

By product group, sales of the WD-40 ( WDFC ) multi-use product gained 7% to $107.2 million, while WD-40 ( WDFC ) specialist jumped 10% to $16.8 million. Other maintenance products rose 7% to $7.2 million. Sales of the homecare and cleaning products declined 3% to $7.9 million. The company saw revenue gains in all of the regions it operates in.

Gross margin improved by 160 basis points on a yearly basis to 52.4% in the quarter, aided by favorable sales mix and other miscellaneous mix, Chief Financial Officer Sara Hyzer said during the call. Selling, general, and administrative expenses widened to $45 million from $37.7 million in the prior-year quarter.

For fiscal 2024, WD-40 ( WDFC ) now forecasts EPS to be in a range of $5 to $5.30, compared with its prior projections of $4.78 to $5.15. The company continues to expect revenue to come in between $570 million and $600 million.

"For the first half of fiscal year 2024, we are pleased with our solid performance and progress against our four-by-four strategic framework," Hyzer said. "We continue to monitor the market and our guidance assumes no major changes to the current macroeconomic environment in the second half of fiscal year 2024."