WD-40 heads into its fiscal fourth-quarter report with an unusual split personality. Demand has rarely looked better, with third-quarter sales jumping 24% to a record $195.1 million and full-year guidance raised. Yet the stock has fallen about 31% since that report, trailing the S&P 500 by roughly 34 percentage points. The market's message is clear. Revenue is no longer the question. The question is how much of that growth survives a spike in oil-linked input costs.

Wall Street expects earnings of $1.11 a share on revenue of about $170 million. That would mean sales growth of roughly 4% but a decline of nearly 29% in earnings from the $1.56 earned a year ago. Modest top-line growth paired with a sharp profit decline tells you analysts have priced in the margin squeeze management flagged. Some of the sales slowdown is self-inflicted timing. The company said roughly $3 million of fourth-quarter demand was pulled into the third quarter as customers bought ahead of price increases and sought supply security. A step down from the record third quarter should not surprise anyone. Anything near $170 million still implies healthy underlying demand.

The heart of this report is gross margin. Management cut its fiscal 2026 gross margin range to 54.5% to 55.5% from 55.5% to 56.5%. About 40 basis points of that cut came from reclassifying the Americas homecare and cleaning brands back into the business after a planned sale was abandoned. The other 60 basis points came from input costs. Base oils and specialty chemicals rose anywhere from 50% to double, far above the roughly 40% increase the company had modeled, after Middle East disruption. Because gross margin ran at 56.2%, 55.6% and 56.6% in the first three quarters, even the top of the revised range requires a fourth-quarter figure below 55.5%. The midpoint requires something noticeably lower. A number that holds up better than that math suggests would challenge the bearish read on the stock. A figure at or below the low end, especially paired with talk of costs still rising, would raise doubts about management's promise of a recovery in fiscal 2027.

The full-year guidance gives a useful check. The company now expects earnings of $6.05 to $6.35 a share on reported revenue of $675 million to $690 million. When that guidance was issued, the Street's $5.99 estimate sat below the low end of the new range. Analysts were plainly skeptical that the raise would hold. Delivering on the quarterly consensus would keep the company inside its range, but a miss would confirm that caution.

The growth catalysts deserve attention too, even if they matter more for the year ahead. The Disney and Home Depot King of the Hill promotion was running about 75% incremental after its first month and targeted roughly 80 million consumers in July. That timing makes this report the first full read on its payoff. Investors should also look for updates on the new discount customer with roughly 7,000 outlets and the global rollout of the bio-based lubricant that became a top specialist seller in France. Management has also unveiled a new framework for fiscal 2027. It calls for mid-to-high single-digit maintenance sales growth, gross margin above 55%, and EBITDA growing faster than sales. Any early outlook will be judged against those targets.

Sentiment has cooled slightly, with bullish readings slipping to about 51% from 55% a quarter ago. The stock trades near $203, below its 200-day moving average of about $219 and close to the $188 low of its post-earnings range. Expectations are clearly subdued, which lowers the bar somewhat. Still, the narrative hinges on one issue. WD-40 must show that the margin hit is a temporary cost spike it can price through, not a lasting reset to the business's profitability.