As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at maintenance and repair distributors stocks, starting with VSE Corporation (NASDAQ:VSEC).
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 9 maintenance and repair distributors stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 2%.
Luckily, maintenance and repair distributors stocks have performed well with share prices up 12.2% on average since the latest earnings results.
VSE Corporation (NASDAQ:VSEC)
With roots dating back to 1959 and a strategic focus on extending the life of transportation assets, VSE Corporation (NASDAQ:VSEC) provides aftermarket parts distribution and maintenance, repair, and overhaul services for aircraft and vehicle fleets in commercial and government markets.
VSE Corporation reported revenues of $272.1 million, up 41.1% year on year. This print exceeded analysts’ expectations by 3.4%. Overall, it was an incredible quarter for the company with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
VSE Corporation achieved the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 18.1% since reporting and currently trades at $167.
Is now the time to buy VSE Corporation? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $76.42 million, up 14.6% year on year, outperforming analysts’ expectations by 5.7%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Transcat achieved the biggest analyst estimates beat among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $79.20.
Is now the time to buy Transcat? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $4.55 billion, up 5.6% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a slower quarter as it posted full-year EPS guidance slightly missing analysts’ expectations and a miss of analysts’ EPS estimates.
As expected, the stock is down 1.1% since the results and currently trades at $1,028.
Read our full analysis of W.W. Grainger’s results here.
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 $971.1 million, flat year on year. This print met analysts’ expectations. It was a satisfactory quarter as it also logged an impressive beat of analysts’ EBITDA estimates.
MSC Industrial had the slowest revenue growth among its peers. The stock is up 9.1% since reporting and currently trades at $92.66.
Read our full, actionable report on MSC Industrial here, it’s free.
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 $498.7 million, up 11.9% year on year. This result was in line with analysts’ expectations. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
DXP had the weakest performance against analyst estimates among its peers. The stock is up 12.5% since reporting and currently trades at $126.40.
Read our full, actionable report on DXP here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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