Wesco announces record fourth quarter
Wesco International, a provider of business-to-business distribution, logistics services and supply chain solutions, announced a record fourth quarter with net sales of $6.1 billion, up 10% YoY. The company released full year 2025 results, as well.
"We closed out 2025 with positive momentum and again outperformed the market with our leading portfolio of products, services and solutions. Record sales of $23.5 billion were up 8% and increased by double-digits in the second half. Backlog was up 19% to a record level at year end, highlighting the strength of our business, and providing another proof point that Wesco is benefiting from the secular growth trends of AI-driven data centers, increased power generation, and supply chain re-shoring," said John Engel, chairman, president and CEO.
Engel continued, "In the fourth quarter, CSS and EES delivered excellent results. CSS delivered 16% sales growth while expanding adjusted EBITDA margin 90 basis points and EES delivered 9% sales growth with adjusted EBITDA margin up 50 basis points. UBS continued to face ongoing sales and margin challenges with public power customers, while sales to investor owned utilities accelerated in the fourth quarter. Utility backlog increased over 20% at year end, providing a strong set-up for 2026. Adjusted EPS in the quarter was below our expectations, as the continued operating strength in our CSS and EES businesses was more than offset by lower sales and margin in UBS. Additionally, adjusted EPS was impacted to a larger degree by non-operating items, including updated tax positions.
"Due to our strong fourth quarter sales, particularly when considering normal seasonality, we increased our investment in working capital, which impacted our normal expectation of cash generation in the quarter. We expect to collect cash from our higher receivables balance during the first quarter. We expect much stronger cash generation in 2026 as we continue to make progress on our working capital management initiatives. In the near term, our capital allocation priorities remain focused on debt reduction and stock repurchases to offset annual equity award dilution. We also continue to invest in our tech enabled business transformation and manage an active M&A pipeline."
Mr. Engel added, "We made excellent progress on our enterprise-wide digitalization efforts in 2025. We advanced our technology and capabilities build and have deployed our new technology stack in pilot locations in each of our three business units. The centerpiece of our new tech stack is a world-class data lake where we're working to apply AI to improve the efficiency and effectiveness of our business. We were pleased to be recognized by Fortune in their inaugural AI ranking of Fortune 500 companies with a number 10 ranking. Once our digital transformation is completed, we will accelerate our earnings growth through even greater cross-sell, expand our margins through improved pricing and operating cost leverage, and increase our working capital turns by leveraging our single global IT instance."
Mr. Engel concluded, "Looking ahead in 2026, we expect to continue to outperform the market and deliver mid- to high-single-digit organic sales growth, strong operating leverage and margin expansion, double-digit EPS growth, and improved free cash flow generation. I am pleased to announce that we plan to increase our common stock dividend 10% again this year to $2.00 per share. As the market leader, and with positive momentum building, I'm confident that Wesco will continue to outperform our markets and deliver exceptional value to our customers and shareholders in 2026 and beyond. Finally, I continue to be very proud of our talented and dedicated Wesco team, whose relentless focus on serving customers, advancing our digital transformation agenda, and driving superior execution across our businesses is producing notable results, as we realize our vision of becoming the best tech-enabled supply chain solutions provider in the world."
INDUSTRIAL SUPPLY MAGAZINE
The November/December issue of Industrial Supply magazine features an in-depth cover story about Applied Industrial Technologies. Plus, we're featuring articles by contributing writers Dr. Bharani Nagarathnam and Frank Hurtte, as well as interviews with numerous product and distribution industry experts.
