Let’s dig into the relative performance of MSC Industrial (NYSE:MSM) and its peers as we unravel the now-completed Q2 maintenance and repair distributors earnings season.
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%.
Thankfully, share prices of the companies have been resilient as they are up 8.5% on average since the latest earnings results.
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 was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with a solid beat of analysts’ EBITDA estimates.
Erik Gershwind, Chief Executive Officer, said, "We delivered fiscal third quarter results that were in line with our expectations for both average daily sales and operating margins. While we certainly have plenty of room for improvement, we saw early signs of progress in each of our three critical strategic areas of focus — reenergizing the core customer, maintaining momentum in high-touch solutions, and optimizing our cost to serve."
MSC Industrial delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 8.1% since reporting and currently trades at $91.82.
Is now the time to buy MSC Industrial? 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 and EBITDA estimates.
Transcat delivered the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 8.2% since reporting. It currently trades at $72.05.
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 4.4% since the results and currently trades at $993.76.
Read our full analysis of W.W. Grainger’s results here.
Fastenal (NASDAQ:FAST)
Founded in 1967, Fastenal (NASDAQ:FAST) provides industrial and construction supplies, including fasteners, tools, safety products, and many other product categories to businesses globally.
Fastenal reported revenues of $2.08 billion, up 8.6% year on year. This number beat analysts’ expectations by 0.5%. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ sales volume estimates and a decent beat of analysts’ adjusted operating income estimates.
The stock is up 9.1% since reporting and currently trades at $47.25.
Read our full, actionable report on Fastenal here, it’s free.
Distribution Solutions (NASDAQ:DSGR)
Founded in 1952, Distribution Solutions (NASDAQ:DSGR) provides supply chain solutions and distributes industrial, safety, and maintenance products to various industries.
Distribution Solutions reported revenues of $502.4 million, up 14.3% year on year. This result surpassed analysts’ expectations by 3.7%. It was an exceptional quarter as it also logged a solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
The stock is up 7.4% since reporting and currently trades at $30.99.
Read our full, actionable report on Distribution Solutions 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.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.