The severity of the coronavirus crisis has exceeded that of the Great Recession more than 10 years ago, and while distributors haven’t been spared the impact of COVID-19, the industry is faring better than most.
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Grainger’s sales dipped 2% last quarter as pandemic-related sales (e.g., PPE) again offset softness in its traditional product line, but non-pandemic sales are showing signs of life.
But year-to-date sales grow 2.6% from same period in 2019 as company posts “record, double-digit sales and profit growth rates in June,” according to Watsco's CEO.
Industrial distributor estimates that MRO market declined 14% to 15% during the quarter even as company gained share in the U.S.
June sales increased 20.4% over the same month a year ago as the company's safety and PPE sales continued to bolster company during pandemic.
Industrial distributor’s sales decline 3% in the first nine months compared to year-ago period while profit dips 2.4 percent YTD.
U.S. sales decrease 22 percent as company continues to deal with uncertainty surrounding the COVID-19 pandemic.
Distributor expects negative impact from COVID-19 to be reflected in second quarter results.
The industrial distributor said preliminary fiscal third-quarter sales were $835 million, which would mark a 3.6% decrease from year-ago period.
The safety category again stole the show for Fastenal Co. during its May sales report with a 136.3% increase, while the companys fastener business has likely hit the bottom during the COVID-19 disruption and could be on the upswing.
The company reported daily sales up 14.8% versus a year ago based on strength in safety.
Profit increased 40.2% to $59.7 million.
Profit for the year was $126 million, compared to $105 million in 2019.
The company withdrew its full-year 2020 outlook on April 28, 2020, due to the uncertain impact of the COVID-19 pandemic and committed to provide monthly updates until it is better able to forecast future performance.
Combined net sales for the fiscal months of March and April (the first two months of the Company's fiscal third quarter) were $565.4 million, a decrease of 7.8% compared to the same period in the prior fiscal year.
The increase was mostly due to the acquisition of Ingersoll-Rand plcs Industrial segment by Gardner Denver Holdings, Inc. in February of 2020.
Average daily net sales increased 0.2%.
The company reported a loss for the quarter of $248.2 million, compared to a loss of $19.5 million during the first quarter of 2019.
A follow-up phone call to the industrial distributors mid-April 1Q report provides detail behind dramatic shifts in growth rate, with EVP and CFO Holden Lewis highlighting how the company is pivoting to meet changing customer demands.
