As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the maintenance and repair distributors industry, including Distribution Solutions (NASDAQ: DSGR) and its peers.

Supply chain and inventory management are themes that grew in focus after COVID wreaked havoc on the global movement of raw materials and components. Maintenance and repair distributors that boast reliable selection and quickly deliver products to customers can benefit from this theme. While e-commerce hasn’t disrupted industrial distribution as much as consumer retail, it is still a real threat, forcing investment in omnichannel capabilities to serve customers everywhere. Additionally, maintenance and repair distributors are at the whim of economic cycles that impact the capital spending and construction projects that can juice demand.

The 9 maintenance and repair distributors stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 2%.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.8% since the latest earnings results.

Distribution Solutions (NASDAQ: DSGR)

Founded in 1952, Distribution Solutions (NASDAQ: DSGR) provides supply chain solutions and distributes industrial, safety, and maintenance products to various industries.

Distribution Solutions reported revenues of $518 million, up 10.7% year on year. This print exceeded analysts’ expectations by 3.3%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ revenue estimates but a miss of analysts’ EBITDA estimates.

Bryan King, CEO and Chairman, said, "Our third-quarter results demonstrate the strength and resilience of our business model, even as inflation, tariffs, and higher interest rates continue to challenge parts of the U.S. economy. We delivered double-digit revenue growth of 10.7% in the quarter, supported by strong momentum in organic average daily sales which grew 6.0%, as well as revenue contributions from our recent acquisitions. Sales growth was realized across each of our segments, particularly strong at Gexpro Services and the Canada Branch Division. Supported by four quarters of organic top-line revenue growth quarter-over-quarter, we’re entering the final stretch of the year with solid momentum and confidence in our growth strategy.

Unsurprisingly, the stock is down 12.3% since reporting and currently trades at $26.15.

Is now the time to buy Distribution Solutions? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: VSE Corporation (NASDAQ: VSEC)

With roots dating back to 1959 and a strategic focus on extending the life of transportation assets, VSE Corporation (NASDAQ: VSEC) provides aftermarket parts distribution and maintenance, repair, and overhaul services for aircraft and vehicle fleets in commercial and government markets.

VSE Corporation reported revenues of $282.9 million, up 3.4% year on year, outperforming analysts’ expectations by 2.3%. The business had a stunning quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.4% since reporting. It currently trades at $176.73.

Is now the time to buy VSE Corporation? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Global Industrial (NYSE: GIC)

Formerly known as Systemax, Global Industrial (NYSE: GIC) distributes industrial and commercial products to businesses and institutions.

Global Industrial reported revenues of $353.6 million, up 3.3% year on year, falling short of analysts’ expectations by 1%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.

Global Industrial delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 21.4% since the results and currently trades at $27.62.

Read our full analysis of Global Industrial’s results here.

Fastenal (NASDAQ: FAST)

Founded in 1967, Fastenal (NASDAQ: FAST) provides industrial and construction supplies, including fasteners, tools, safety products, and many other product categories to businesses globally.

Fastenal reported revenues of $2.13 billion, up 11.7% year on year. This number was in line with analysts’ expectations. However, it was a slower quarter as it recorded EPS in line with analysts’ estimates and a miss of analysts’ EBITDA estimates.

The stock is down 10.5% since reporting and currently trades at $41.

Read our full, actionable report on Fastenal here, it’s free for active Edge members.

WESCO (NYSE: WCC)

Based in Pittsburgh, WESCO (NYSE: WCC) provides electrical, industrial, and communications products and augments them with services such as supply chain management.

WESCO reported revenues of $6.20 billion, up 12.9% year on year. This result surpassed analysts’ expectations by 4.9%. It was a very strong quarter as it also logged an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ revenue estimates.

WESCO scored the biggest analyst estimates beat among its peers. The stock is up 11.9% since reporting and currently trades at $255.43.

Read our full, actionable report on WESCO here, it’s free for active Edge members.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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