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GLOBAL INDUSTRIAL Co (GIC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was solid: revenue $321.0M, diluted EPS from continuing operations $0.35, gross margin 34.9%, and operating margin 5.7%; operating income rose 4.6% YoY to $18.2M as cost control offset a modest sales decline .
  • Results beat S&P Global consensus: revenue $321.0M vs $307.0M*, EPS $0.35 vs $0.20*; strength came from Indoff and largest strategic accounts, with sales turning positive in March, and sequential margin recovery vs Q4 .
  • Management flagged April tariffs as a key swing factor; initial pricing actions began in April, and margin volatility is possible given inventory timing, tariff pass-through, and supply chain shifts .
  • Balance sheet remains a catalyst: $39.0M cash, no debt, ~$120.5M revolver availability; dividend maintained at $0.26 per share .

Values retrieved from S&P Global*

What Went Well and What Went Wrong

What Went Well

  • Beat Street: Q1 revenue $321.0M vs $307.0M*, EPS $0.35 vs $0.20*, a significant surprise on both lines, aided by Indoff and strategic accounts strength, and pricing capture/freight management supporting margins .
  • Gross margin expanded +60 bps YoY to 34.9% and +110 bps sequential; operating income rose 4.6% YoY to $18.2M on tight SD&A control (SD&A up only 0.4%) .
  • Demand trajectory improved through the quarter with growth in March; early Q2 weeks showed modest top-line growth continuation .

Values retrieved from S&P Global*

What Went Wrong

  • Sales down 0.7% YoY to $321.0M; January softness from mid-week New Year’s timing; Canada declined ~9% in USD (down 2.5% in local currency) .
  • SD&A rate up 40 bps to 29.3% (limited operating leverage despite cost control), reflecting mix and marketing spend dynamics .
  • Tariffs enacted in April disrupted supply chains and customers; management expects potential margin rate volatility given inventory timing and tariff-related cost inflation as pricing and sourcing actions roll through .

Financial Results

Core P&L and Margins Trend

MetricQ3 2024Q4 2024Q1 2025Q1 2025 Consensus*
Net Sales ($USD Millions)$342.4 $302.3 $321.0 $307.0*
Gross Profit ($USD Millions)$116.3 $102.3 $112.1 —
Gross Margin (%)34.0% 33.8% 34.9% —
Operating Income ($USD Millions)$22.2 $14.5 $18.2 —
Operating Margin (%)6.5% 4.8% 5.7% —
Diluted EPS – Continuing Ops ($)$0.44 $0.27 $0.35 $0.20*

Values retrieved from S&P Global*

Regional/Channel KPIs

KPIQ1 2025
U.S. revenue growth YoY+0.3%
Canada revenue growth YoY (local currency)-2.5%
Canada revenue YoY (USD)~-9%
Indoff performanceContinued growth into Q1; project flow healthy
Pricing actions in Q1No tariff-specific actions in Q1; price slightly positive (ocean transit cost reaction in 2H 2024)

Operating and Balance Sheet KPIs

KPIQ3 2024Q4 2024Q1 2025
SD&A ($USD Millions)$94.1 $87.8 $93.9
SD&A (% of Sales)27.5% 29.0% 29.3%
Operating Cash Flow – Continuing Ops ($USD Millions)$9.6 $15.8 $3.3
Cash and Cash Equivalents ($USD Millions)$38.9 $44.6 $39.0
Inventories ($USD Millions)$165.3 $167.1 $178.6
Working Capital ($USD Millions)$180.9 $184.2 $192.5
Capex ($USD Millions)$0.9 $0.7 $0.2

Actual vs S&P Global Consensus (Q1 2025)

MetricActualConsensus*Surprise
Revenue ($USD Millions)$321.0 $307.0*+$14.0M*
Diluted EPS – Continuing Ops ($)$0.35 $0.20*+$0.15*
# of Estimates (EPS / Revenue)—2 / 2*—

Values retrieved from S&P Global*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Capital ExpenditureFY 2025$2–$3M (Q4 guide) $2–$3M (reaffirmed) Maintained
Quarterly DividendQ1 2025$0.26 declared (Feb) $0.26 declared (Apr) Maintained
Pricing/Tariffs ActionsNear-term 2025Cost/price neutrality goal historically Initial pricing actions taken in April; expect additional adjustments; margin volatility possible Adjusting playbook
Debt/LiquidityQ1 2025No debt; ~$120.5M availability (Q4) No debt; ~$120.5M availability (Q1) Maintained

Earnings Call Themes & Trends

TopicQ-2 (Q3 2024)Q-1 (Q4 2024)Current (Q1 2025)Trend
Tariffs/MacroFreight cost headwinds; cautious SMB demand CPC inflation; proactive tariff planning; prepared to pass-through pricing April tariffs disrupted supply chain; initial pricing actions; margin volatility expected Escalating external pressures; active mitigation
Supply chain diversificationEmphasized private brands; freight actions More diversified country-of-origin; proactive planning Mix from China “under 35%” and shifting selected lines to less impacted countries Diversification ongoing
CRM/customer engagementSalesforce phased rollout; go-live near term CRM rollout across sales; marketing/service coming in summer 2025 New CRM on track for completion this summer Execution progressing
Strategic accounts vs SMBStrategic accounts strong; SMB soft Large managed accounts resilient; SMB softness persists Strategic accounts and GPO momentum; SMB improved into March/April Strategic accounts leading; SMB stabilizing
Pricing & freight managementPrice neutral in Q3; freight elevated Elevated ocean and parcel costs; pricing analytics Price capture; freight management supported GM; April pricing moves begun Improving execution, volatile inputs
M&A optionalityNot emphasizedStrong balance sheet; strategic opportunities M&A is an active growth lever if fit is right Optionality highlighted

Management Commentary

  • “Excluding the holiday impact, revenue would have been up low single digits… Gross margin increased 60 basis points… with strong cost controls, operating income improved 4.6%.” – CEO Anesa Chaibi .
  • “The tariffs enacted in April have created a disruption… our focus is on what we can control… ensuring product availability, and providing customers with as much visibility as we can.” – CEO Anesa Chaibi .
  • “Price was slightly positive… we did not take any tariff-specific pricing actions in the first quarter… initial pricing actions in April and expect additional adjustments.” – CFO Thomas Clark .
  • “Gross margin was 34.9%, up 60 bps YoY and up 110 bps sequentially… benefited from price capture and freight management.” – CFO Thomas Clark .
  • “We have $39M in cash, no debt, and approximately $120.5M of excess availability… Board declared a quarterly dividend of $0.26.” – CFO Thomas Clark .

Q&A Highlights

  • Indoff and SMB: Indoff continued strong order generation into Q1; SMB improved through the quarter with no material pre-tariff pull-forward observed .
  • SD&A discipline: Discretionary actions taken; aim to sustain SD&A control while reallocating marketing to ROI-positive areas for fixed-cost leverage as growth improves .
  • Tariffs and pricing/margins: Early April price lifts were “small and surgical”; near-term margins supported by strong inventory positioning, but broader tariff levels could necessitate portfolio-wide pricing; margin erosion possible on certain SKUs .
  • Sourcing mix: China share of COGS now “quite a bit lower” than ~35% historical; ongoing shift to less impacted countries takes time due to quality and delivery standards .
  • M&A: With strong balance sheet, M&A remains an active lever if strategically aligned .

Estimates Context

  • Q1 2025 beat: Revenue $321.0M vs $307.0M consensus*, EPS $0.35 vs $0.20 consensus*; only two estimates contributed, magnifying surprise potential. Where estimates are unavailable for margins, comparisons are not applicable .
  • Forward context: Management signals near-term pricing adjustments and potential gross margin volatility tied to tariffs; consensus tracking should adjust for pricing pass-through, sourcing diversification timeline, and demand stabilization trends noted in March/early Q2 .

Values retrieved from S&P Global*

Actual vs S&P Global Consensus (Q1 2025)

MetricActualConsensus*Surprise
Revenue ($USD Millions)$321.0 $307.0*+$14.0M*
Diluted EPS – Continuing Ops ($)$0.35 $0.20*+$0.15*
# of Estimates (EPS / Revenue)—2 / 2*—

Values retrieved from S&P Global*

Key Takeaways for Investors

  • Clear top- and bottom-line beat against a low estimate base; margin recovery and cost control drove operating income growth despite slightly down sales .
  • Macro/tariffs are the dominant swing factors; pricing actions started in April with potential for margin rate volatility as inventory timing and pass-through evolve .
  • Strategic accounts and GPOs are the growth engine; SMB demand improved through March with modest Q2 continuation, supporting a stabilizing trajectory .
  • Execution levers in place: CRM go-live this summer, account-based marketing, and freight/pricing analytics underpin mix-driven margin initiatives .
  • Liquidity supports optionality: $39.0M cash, no debt, ~$120.5M revolver availability, and a $0.26 dividend provide capacity for M&A and investment in growth .
  • Watch Canada FX and tariff pass-through; Canada was down ~9% in USD, and tariff magnitude could affect assortment and pricing cadence by SKU/portfolio .
  • Near-term trading lens: Beat plus margin expansion is positive; tariff headlines and pricing updates are likely to be catalysts, while CRM milestones and strategic account penetration are medium-term thesis drivers .

Values retrieved from S&P Global*