Wesco Q2 sales grow 7.2%
Wesco International, a provider of business-to-business distribution, logistics services and supply chain solutions, reported second quarter sales grew by 7.2% YoY on an organic basis.
Other highlights included:
- Organic sales up 7.2% YOY and up 6.2% sequentially
- Data center sales eclipsed $1 billion, up ~65% YOY
- Second quarter EBITDA margin of 6.7%, up 90 basis points sequentially
- Second quarter diluted EPS of $3.83; adjusted diluted EPS of $3.39, up 6% YOY
- Backlog up YOY and sequentially across all three business units
- Preferred stock redeemed in June, creating substantial net income, EPS and cash flow benefits
- Full year 2025 organic sales growth outlook raised; reflects positive sales momentum from the first seven months of the year
"We continued to build on our positive sales momentum in the first half of 2025 and outperformed the market with our leading portfolio of products, services, and solutions," said President and CEO John Engel. "Sales growth is accelerating, with organic sales up 6% in the first quarter, 7% in the second quarter, and preliminary July sales per workday up approximately 10% year-over-year. The second quarter performance was led by 17% organic growth in CSS and 6% organic growth in EES. Total data center sales eclipsed $1B in the quarter, setting a new mark, and were up 65% versus the prior year. And, on an encouraging note, our Utility business has begun to show signs of improvement as sales to investor-owned utilities returned to growth in the second quarter.
"Our Wesco opportunity pipeline continues to grow, bid activity levels remain very strong, and backlog is at record levels, increasing both year-over-year and sequentially across all three business segments. Adjusted EBITDA margin was up 90 basis points sequentially as we generated strong operating leverage on higher topline sales and stable gross margin. All in all, we're off to a good start in the first half of 2025 and we are building on that momentum for the remainder of the year," Mr. Engel added, "As planned, we completed the redemption of our preferred stock in June improving 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 is targeted to debt reduction, stock buybacks and acquisitions."
"We are raising our full-year organic sales growth outlook based on our positive momentum through the first seven months of 2025 while maintaining our EPS mid-point. We remain firmly focused on executing our cross-selling initiatives and enterprise-wide margin improvement program while delivering operational improvements enabled by our technology-driven business transformation. As the market leader, the enduring secular trends of AI-driven data centers, increased power generation, electrification, automation, and reshoring underpin my confidence that Wesco will continue to outperform our markets this year."
On an organic basis, which removes the impact of the Ascent, LLC ("Ascent") acquisition, sales for the second quarter of 2025 grew by 7.2%. The increase in organic sales reflects volume and price growth in the CSS and EES segments, partially offset by a volume decline in the UBS segment. Sequentially, net sales increased 10.4% and organic sales grew by 6.2%.
Backlog at the end of the second quarter of 2025 increased by 11% compared to the end of the second quarter of 2024. Sequentially, backlog increased by approximately 5%.
On an organic basis, which removes the impact of the Wesco Integrated Supply ("WIS") divestiture and Ascent acquisition, differences in foreign exchange rates, and the impact from the number of workdays, sales for the first six months of 2025 grew by 6.4%. The increase in organic sales reflects volume and price growth in the CSS and EES segments, partially offset by a volume decline in the UBS segment.
INDUSTRIAL SUPPLY MAGAZINE
The July/August issue of Industrial Supply magazine features an in-depth cover story about 3BG Supply. 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.
