As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the maintenance and repair distributors industry, including VSE Corporation (NASDAQ: VSEC) 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 9 maintenance and repair distributors stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 2%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.9% since the latest earnings results.
Best Q3: 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 $282.9 million, up 3.4% year on year. This print exceeded analysts’ expectations by 2.3%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ EBITDA estimates.
“VSE delivered another quarter of record performance, reflecting the strength of our aviation aftermarket platform and disciplined execution of our 2025 operating plan,” said John Cuomo, President and Chief Executive Officer of VSE Corporation.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $178.35.
Is now the time to buy VSE Corporation? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 $978.2 million, up 2.7% year on year, outperforming analysts’ expectations by 1.5%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates.
The market seems content with the results as the stock is up 2.6% since reporting. It currently trades at $89.27.
Is now the time to buy MSC Industrial? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Global Industrial (NYSE: GIC)
Formerly known as Systemax, Global Industrial (NYSE: GIC) distributes industrial and commercial products to businesses and institutions.
Global Industrial reported revenues of $353.6 million, up 3.3% year on year, falling short of analysts’ expectations by 1%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
Global Industrial delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 24.1% since the results and currently trades at $26.65.
Read our full analysis of Global Industrial’s results here.
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 $82.27 million, up 21.3% year on year. This number surpassed analysts’ expectations by 3.5%. Aside from that, it was a satisfactory quarter as it also logged a solid beat of analysts’ revenue estimates but a significant miss of analysts’ EPS estimates.
Transcat pulled off the fastest revenue growth among its peers. The stock is down 19.6% since reporting and currently trades at $56.59.
Read our full, actionable report on Transcat here, it’s free for active Edge members.
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 $4.66 billion, up 6.1% year on year. This result met analysts’ expectations. Zooming out, it was a satisfactory quarter as it also recorded a solid beat of analysts’ adjusted operating income estimates but full-year revenue guidance slightly missing analysts’ expectations.
The stock is down 1.1% since reporting and currently trades at $945.61.
Read our full, actionable report on W.W. Grainger here, it’s free for active Edge members.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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