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Q1 Maintenance and Repair Distributors Earnings Review: First Prize Goes to Transcat (NASDAQ:TRNS)


Adam Hejl /
2024/07/04 8:58 am EDT

Earnings results often indicate what direction a company will take in the months ahead. With Q1 now behind us, let’s have a look at Transcat (NASDAQ:TRNS) 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. Maintenance and repair distributors that boast reliable selection and quickly deliver products 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 serve customers everywhere. Additionally, maintenance and repair distributors are at the whim of economic cycles that impact the capital spending and construction projects that can juice demand.

The 7 maintenance and repair distributors stocks we track reported an ok Q1; on average, revenues were in line with analyst 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. The start of 2024 has been a different story as mixed signals have led to market volatility, and maintenance and repair distributors stocks have had a rough stretch, with share prices down 8.1% on average since the previous earnings results.

Best Q1: Transcat (NASDAQ:TRNS)

Serving the pharmaceutical, industrial manufacturing, energy, and chemical process industries, Transcat (NASDAQ:TRNS) provides measurement instruments and supplies.

Transcat reported revenues of $70.91 million, up 14.3% year on year, topping analysts' expectations by 3.4%. It was an incredible quarter for the company, with revenue and EPS exceeding analysts' expectations.

“We are extremely pleased with our fourth quarter and full year fiscal 2024 results as double-digit organic Service revenue growth and increased productivity drove Service gross margin expansion while Distribution gross margins soared due to growth in Rentals,” commented Lee D. Rudow, President and CEO.

Transcat Total Revenue

Transcat scored the biggest analyst estimates beat of the whole group. The stock is down 0.8% since the results and currently trades at $122.82.

Is now the time to buy Transcat? Access our full analysis of the earnings results here, it's free.

W.W. Grainger (NYSE:GWW)

Founded as a supplier of motors, W.W. Grainger (NYSE:GWW) provides maintenance, repair, and operating (MRO) supplies and services to businesses and institutions.

W.W. Grainger reported revenues of $4.24 billion, up 3.5% year on year, falling short of analysts' expectations by 0.5%. It was a mixed quarter for the company, with a decent beat of analysts' organic revenue estimates but a miss of analysts' earnings estimates.

W.W. Grainger Total Revenue

The stock is down 4.5% since the results and currently trades at $915.51.

Is now the time to buy W.W. Grainger? Access our full analysis of the earnings results here, it's free.

Weakest Q1: MSC Industrial (NYSE:MSM)

Founded in NYC’s Little Italy, MSC Industrial Direct (NYSE:MSM) provides industrial supplies and equipment, offering vast and reliable selection for customers such as contractors

MSC Industrial reported revenues of $979.4 million, down 7.1% year on year, in line with analysts' expectations. It was an ok quarter for the company, with a narrow beat of analysts' earnings estimates.

MSC Industrial had the slowest revenue growth in the group. The stock is up 0.4% since the results and currently trades at $78.51.

Read our full analysis of MSC Industrial's results here.

WESCO (NYSE:WCC)

Based in Pittsburgh, WESCO (NYSE:WCC) provides electrical, industrial, and communications products and augments them with services such as supply chain management.

WESCO reported revenues of $5.35 billion, down 3.1% year on year, in line with analysts' expectations. It was a slower quarter for the company, with a miss of analysts' earnings estimates.

The stock is up 3.1% since the results and currently trades at $159.24.

Read our full, actionable report on WESCO here, it's free.

DXP (NASDAQ:DXPE)

Founded as Southern Engine and Pump Company, DXP Enterprises (NASDAQ:DXPE) is an industrial distributor that sells pumps, motors, metal milling and threading tools, and safety equipment like goggles, among other products and services.

DXP reported revenues of $412.6 million, down 2.7% year on year, in line with analysts' expectations. It was a decent quarter for the company, with a narrow beat of analysts' sales estimates.

The stock is down 19.4% since the results and currently trades at $44.91.

Read our full, actionable report on DXP here, it's free.

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