Global Industrial has recently released its 10-Q report, revealing a 6.8% increase in net sales to $347.8 million for the second quarter of 2024, including organic revenue growth of 1.8% and the impact of the Indoff acquisition. The company's gross margin improved to 35.2%, primarily due to proactive price management and the contribution mix of private label products. However, operating income from continuing operations decreased by 9.3% to $26.4 million compared to the same period last year. For the six months ended June 30, 2024, net sales increased by 11.9% to $671.2 million, while gross margin declined to 34.8%. The company reported a net income per diluted share from continuing operations of $0.52 for the quarter, marking a 7.1% decrease from the previous year.
The company's net sales were primarily driven by the inclusion of Indoff sales, with organic U.S. sales increasing by 2.1% and Canada sales decreasing by 1.1% for the quarter. For the six months ended June 30, 2024, organic U.S. sales increased by 3.2% and Canada sales increased by 0.3%. The gross margin improvement in the second quarter was attributed to proactive price management and a higher mix of private label sales. However, selling, distribution, and administrative expenses (SD&A) as a percentage of sales increased by approximately 190 basis points compared to the prior year, primarily due to planned investment in key sales and marketing growth initiatives. The company expects SD&A levels to moderate in the second half of the year but remain elevated compared to the previous year's quarterly periods.
Global Industrial's financial results for the second quarter and the first six months of 2024 reflect a cautious demand environment within its core small and medium business customer base. The company anticipates continued performance challenges due to the current economic environment, inflationary pressures, and historical seasonality. Despite the decrease in operating income and net income per diluted share, the company remains focused on managing its margin profile, proactive promotion, and freight actions as part of its competitive pricing initiatives.
The 10-Q report provides insights into the company's financial performance, including its net sales, gross margin, operating income, and net income from continuing operations. It also highlights the factors contributing to the fluctuations in these key financial indicators, such as the impact of the Indoff acquisition, organic sales growth, and the management of selling, distribution, and administrative expenses. Today the company's shares have moved 1.7% to a price of $35.8. Check out the company's full 10-Q submission here.
