Wesco International Q1 sales dip 3%
Wesco International reported a 3% decrease in net sales for its first quarter of 2024.
Net sales were $5.4 billion for the first quarter of 2024 compared to $5.5 billion for the first quarter of 2023, a decrease of 3.1%. Organic sales for the first quarter of 2024 declined by 3.2%, as fluctuations in foreign exchange rates positively impacted reported net sales by 0.1%. The decrease in organic sales reflects volume declines in all three segments, partially offset by price inflation.
Backlog at the end of the first quarter of 2024 declined by 10% compared to the end of the first quarter of 2023. Sequentially, backlog increased by approximately 1% in the quarter.
"Our first quarter sales met our expectations and were consistent with the outlook we provided during the quarter," said John Engel, chairman, president and CEO. "Our performance, compared against the strong first quarter a year ago, was in line with our typical seasonal pattern and our full year outlook. Quoting, bid activity levels, and our backlog remain healthy and support our view for sequential growth as the year progresses. Our free cash flow generation, something we are acutely focused on, was a record $731 million in the first quarter and more than $1.4 billion over the trailing twelve months. As a result, our financial leverage now stands at 2.6x EBITDA and near our target range of 1.5 to 2.5x. In addition to our strong cash flow performance, the after-tax proceeds of approximately $300 million from the sale of our Wesco Integrated Supply business will allow us to pursue our capital allocation strategies more aggressively while we continue to pursue accretive acquisitions.
"We are maintaining our previous full-year outlook for organic sales growth and adjusted EBITDA margin, and our outlook for the year has been updated to reflect the divestiture of our Wesco Integrated Supply business on April 1, he added. "We are also maintaining our full-year outlook for adjusted earnings per share as we expect to upsize our share repurchase activity using the proceeds received from the divestiture. Given the record cash performance in the first quarter, we are increasing our full-year free cash flow outlook to $800 million to $1 billion. We are focused on continual improvement and making the internal investments to improve our performance and capabilities in the future. And I remain confident that the long-term, secular growth trends are opportunities that will sustain Wesco's long-term sales growth rate and also allow us to increase our share because of our unique global capabilities and scale."
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