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Posted May 2, 2025

Wesco reports 6% organic growth in first quarter

Wesco International reported first quarter net sales were down 0.1% YOY but realized 6% organize growth. The company noted data center sales were up 70%.


"After returning to growth in the fourth quarter of 2024, we are pleased to build on our positive sales momentum to start the year with 6% organic growth in the first quarter," said Chairman, President, and CEO John Engel. "This performance was sparked by 70% growth in total data center sales and high single digit growth in both our Broadband and OEM businesses.

"Consistent with the fourth quarter, our first quarter sales growth was partially offset by continued weakness in our utility business, as expected. With that said, our positive momentum is building to start the second quarter with preliminary April sales per workday up 7% versus prior year. Our opportunity pipeline continues at a record level, bid activity levels remain very strong, and backlog is growing. Gross margin was relatively stable on a sequential basis versus the fourth quarter, and we've begun to see an initial improvement in Communication and Security Solutions as expected." 

Engel added, "With our continued focus on effective working capital management, free cash flow generation was better than expected in the first quarter. Our increased inventory will help manage the potential supply chain impact of global tariffs on our customers. We also issued $800 million of notes to redeem our preferred stock in June. This will strengthen our balance sheet and improve both our cash flow and earnings per share run-rates. Following this redemption, we have no significant debt maturities until 2028 and have strong liquidity to execute our capital allocation priorities. As we outlined in our last Investor Day, over 75% of our free cash flow generation provides optionality and is focused on our capital allocation priorities of stock buybacks, debt reduction and acquisitions."

Mr. Engel concluded, "We are maintaining our full year outlook based upon our current positive momentum to start 2025. Against a backdrop of increased uncertainty and volatility, we remain sharply focused on what we can control – our cross-selling activities, our enterprise-wide margin improvement program, and operational improvements resulting from our tech-enabled business transformation. We recognize that current economic uncertainty is impacting our customers and are committed to providing the products, services, and solutions that they need for their operations and supply chains. I remain confident that Wesco will outperform our markets this year as the secular growth trends of AI-driven data centers, increased power generation, electrification, automation, and reshoring endure."

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