Looking back on industrial distributors stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Beacon Roofing Supply (NASDAQ:BECN) and its peers.
Supply chain and inventory management are themes that grew in focus after COVID wreaked havoc on the global movement of raw materials and components. Distributors that boast a reliable selection of products–everything from hardhats and fasteners for jet engines to ceiling systems–and quickly deliver goods to customers can benefit from this theme. While e-commerce hasn’t disrupted industrial distribution as much as consumer retail, it is still a real threat, forcing investment in omnichannel capabilities to better interact with customers. Additionally, distributors are at the whim of economic cycles that impact the capital spending and construction projects that can juice demand.
The 29 industrial distributors stocks we track reported a slower Q2. As a group, revenues were in line with analysts’ consensus estimates.
Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. This year has been a different story as mixed inflation signals have led to market volatility, and industrial distributors stocks have had a rough stretch. On average, share prices are down 8.1% since the latest earnings results.
Weakest Q2: Beacon Roofing Supply (NASDAQ:BECN)
Established in 1928, Beacon Roofing Supply (NASDAQ:BECN) distributes residential and commercial roofing materials and complementary building products.
Beacon Roofing Supply reported revenues of $2.67 billion, up 6.8% year on year. This print was in line with analysts’ expectations, but overall, it was a disappointing quarter for the company with a miss of analysts’ earnings estimates.
“Our Ambition 2025 initiatives drove record quarterly net sales, solid net income margin, and double-digit Adjusted EBITDA margin,” said Julian Francis, Beacon’s President & CEO.
Unsurprisingly, the stock is down 18.7% since reporting and currently trades at $80.25.
Read our full report on Beacon Roofing Supply here, it’s free.
Best Q2: DXP (NASDAQ:DXPE)
Founded during the emergence of Big Oil in Texas, DXP (NASDAQ:DXPE) provides pumps, valves, and other industrial components.
DXP reported revenues of $445.6 million, up 4.1% year on year, outperforming analysts’ expectations by 2.7%. The business had a stunning quarter with an impressive beat of analysts’ earnings estimates.
The market seems content with the results as the stock is up 1.1% since reporting. It currently trades at $48.28.
Is now the time to buy DXP? Access our full analysis of the earnings results here, it’s free.
Titan Machinery (NASDAQ:TITN)
Founded in 1980, Titan Machinery (NASDAQ:TITN) is a distributor of agricultural and construction equipment across the United States and Europe.
Titan Machinery reported revenues of $633.7 million, down 1.4% year on year, in line with analysts’ expectations. It was a mixed quarter due to its lackluster performance in other areas of the business. These include its decline gross margin and cash burn.
As expected, the stock is down 8.4% since the results and currently trades at $12.98.
Read our full analysis of Titan Machinery’s results here.
NOW (NYSE:DNOW)
Spun off from National Oilwell Varco, NOW Inc. (NYSE:DNOW) provides distribution and supply chain solutions for the energy and industrial end markets.
NOW reported revenues of $633 million, up 6.6% year on year. This result was in line with analysts’ expectations. It was a strong quarter as it also produced an impressive beat of analysts’ operating margin estimates and a decent beat of analysts’ earnings estimates.
The stock is down 15.6% since reporting and currently trades at $11.86.
Read our full, actionable report on NOW here, it’s free.
Rush Enterprises (NASDAQ:RUSHA)
Headquartered in Texas, Rush Enterprises (NASDAQ:RUSH.A) provides truck-related services and solutions, including sales, leasing, parts, and maintenance for commercial vehicles.
Rush Enterprises reported revenues of $2.03 billion, up 1.2% year on year. This result surpassed analysts’ expectations by 8.8%. It was an exceptional quarter as it also put up an impressive beat of analysts’ earnings estimates.
The stock is down 5.3% since reporting and currently trades at $48.30.
Read our full, actionable report on Rush Enterprises here, it’s free.
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