Financial Performance - Gates Industrial reported quarterly earnings of $0.39 per share, matching the Zacks Consensus Estimate, and an increase from $0.36 per share a year ago [1] - The company posted revenues of $883.7 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.01%, although this represents a slight decline from year-ago revenues of $885.5 million [2] - Over the last four quarters, Gates Industrial has exceeded consensus EPS estimates three times and topped revenue estimates four times [2] Stock Performance - Gates Industrial shares have increased approximately 20.4% since the beginning of the year, outperforming the S&P 500's gain of 8.3% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations for it to outperform the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.35 on revenues of $836.93 million, and for the current fiscal year, it is $1.43 on revenues of $3.4 billion [7] - The trend of estimate revisions for Gates Industrial has been favorable leading up to the earnings release, which may influence future stock movements [5][6] Industry Context - Gates Industrial operates within the Manufacturing - General Industrial industry, which is currently ranked in the top 10% of over 250 Zacks industries, suggesting a positive outlook for the sector [8] - The performance of Gates Industrial's stock may also be influenced by the overall industry outlook, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Gates Industrial Corporation plc (NYSE:GTES), a leading global provider of application-specific fluid power and power transmission solutions, today reported results for the second quarter ended June 28, 2025. Second-Quarter 2025 Financial Summary Ivo Jurek, Gates Industrial's Chief Executive Officer, commented, "In the second quarter, our team delivered solid results. The Replacement channels generated positive core sales growth and our Mobility business increased double-digits. Also, we realized growth in ...

DENVER, July 30, 2025 /PRNewswire/ -- Gates Industrial Corporation plc (NYSE: GTES), a leading global provider of application-specific fluid power and power transmission solutions, today reported results for the second quarter ended June 28, 2025. Second-Quarter 2025 Financial Summary Jurek continued, "We have raised our guidance for full year 2025 Adjusted EBITDA and Adjusted EPS. Our team is focused on driving operating improvements and higher cash flow generation while our investments in key growth initi ...

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Gates Industrial (GTES) - Gates Industrial currently holds a Momentum Style Score of B, indicating a positive momentum outlook [2] - The company has a Zacks Rank of 2 (Buy), suggesting strong potential for outperformance in the market [3] Performance Metrics - GTES shares have increased by 1.79% over the past week, while the Zacks Manufacturing - General Industrial industry has seen a slight decline of 0.01% [5] - Over the past month, GTES has shown a price change of 11.34%, outperforming the industry's 5.09% [5] - In the last quarter, GTES shares have risen by 40.62%, and over the past year, they have gained 39.82%, significantly outperforming the S&P 500's increases of 19.12% and 11.85% respectively [6] Trading Volume - The average 20-day trading volume for GTES is 1,566,129 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, one earnings estimate for GTES has increased, while none have decreased, raising the consensus estimate from $1.42 to $1.43 [9] - For the next fiscal year, one estimate has also moved upwards with no downward revisions noted [9] Conclusion - Given the positive performance metrics and earnings outlook, GTES is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a strong candidate for near-term investment [11]

Company Overview - Gates Industrial Corporation plc is a global manufacturer specializing in innovative, highly engineered power transmission and fluid power solutions [2] - The company offers a broad portfolio of products catering to diverse replacement channel customers and OEMs, participating in various sectors of industrial and consumer markets [2] - Gates' products are essential in a wide range of applications across different end markets, including harsh industries and everyday consumer applications, and are sold in over 130 countries [2] Upcoming Earnings Release - Gates Industrial will issue its second-quarter earnings release before the market opens on July 30, 2025 [1] - Management will host a webcast and conference call on the same day at 11:30 a.m. Eastern time to discuss the financial results [1] - An audio replay of the conference call will be available from approximately 2:30 p.m. Eastern time on July 30, 2025, until 11:59 p.m. Eastern time on August 6, 2025 [1][3]

Company Overview & Strategy - The company aims for a core revenue growth of 3-5% through the cycle, targeting twice the rate of industrial production in the mid-term[11] - The company expects to achieve an Adjusted EBITDA margin of 24.5% by 2026 through various enterprise initiatives[11] - In 2024, the company's revenue was $3.4 billion, with an Adjusted EBITDA of $761 million and Free Cash Flow of $273 million[16] Segment Breakdown - Power Transmission accounted for $2.1 billion (62%) of sales in 2024, while Fluid Power accounted for $1.3 billion (38%) of sales[21, 30] - In Power Transmission, 34% of sales are First Fit and 66% are Replacement[23] - In Fluid Power, 30% of sales are First Fit and 70% are Replacement[32] Financial Targets & Capital Allocation - The company is targeting approximately 100% Free Cash Flow conversion during the 2024-2026 period[89] - Since mid-2020, the company has executed approximately $1.2 billion in share repurchases and debt paydown[91] - The company's Net Leverage Ratio was 2.2x as of the end of 2024[91, 96] - The company targets Net Leverage between 10x to 20x by 2026[94] - The company projects Adjusted EPS to be between $1.90 and $2.30 by 2026[110]

Gates Industrial (GTES) FY Conference Summary Company Overview - **Company**: Gates Industrial Corporation (GTES) - **Conference Date**: May 21, 2025 Key Industry Insights - **Automotive Replacement**: Strong performance noted, particularly in North America and China, driven by new customer acquisitions and high used car sales prices [2][9] - **Mobility Sector**: Experienced double-digit growth, especially in e-bikes, with a positive outlook for continued strength [3][4] - **Industrial Recovery**: Gradual recovery observed, particularly in Asia, but tempered expectations for growth due to global trade uncertainties [6][12] - **Geographical Performance**: - **North America**: Positive trends in automotive replacement; industrial side expected to be challenging [11] - **EMEA**: Slight decline of 1% in Q1, but mobility business expected to provide tailwinds [3][11] - **Asia**: Positive core growth in China and India, with signs of industrial recovery [12][14] Financial Performance and Guidance - **Q1 Performance**: Exceeded expectations with a 1.5% organic growth; Q2 guidance remains flattish [1][5] - **Full Year Guidance**: Targeting approximately 1.5% organic growth for the year, with expectations for acceleration in the second half [17][21] - **Pricing Strategy**: Implemented $40 million in price increases to offset tariffs, anticipating some demand headwinds [20][27] Operational Challenges and Strategies - **Inventory Levels**: Destocking in agriculture and construction sectors is nearing completion, with confidence in distribution inventory levels [22][23] - **Tariff Impact**: Ongoing adjustments to pricing strategies in response to tariffs, with a focus on maintaining margin neutrality [29][34] - **Debt Management**: Aiming to reduce gross debt below $2 billion while balancing stock buybacks and potential M&A opportunities [46][48] M&A and Growth Opportunities - **M&A Strategy**: Open to strategic acquisitions that align with growth objectives, particularly in underrepresented segments or geographies [49][52] - **Data Center Market**: Targeting $100 to $200 million in incremental revenue by 2027, focusing on organic growth through existing product lines [41][42] Conclusion - **Outlook**: Gates Industrial remains optimistic about its growth trajectory, particularly in automotive replacement and mobility sectors, while navigating challenges in industrial recovery and global trade dynamics. The company is committed to strategic pricing, operational efficiencies, and exploring M&A opportunities to enhance its market position [35][54]

Core Insights - Gates Industrial (GTES) reported revenue of $847.6 million for Q1 2025, a year-over-year decline of 1.7%, with an EPS of $0.36 compared to $0.31 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $826.29 million, resulting in a surprise of +2.58%, while the EPS also surpassed the consensus estimate of $0.33 by +9.09% [1] Financial Performance - Net Sales in Fluid Power amounted to $320.40 million, slightly below the two-analyst average estimate of $321.85 million, reflecting a year-over-year change of -2.9% [4] - Net Sales in Power Transmission reached $527.20 million, exceeding the two-analyst average estimate of $504.44 million, with a year-over-year change of -1.1% [4] - Adjusted EBITDA for Fluid Power was reported at $70.60 million, below the average estimate of $72.10 million [4] - Adjusted EBITDA for Power Transmission was $116.70 million, surpassing the average estimate of $109.91 million [4] Stock Performance - Gates Industrial shares have returned -3.2% over the past month, compared to a -0.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - First quarter sales reached $848 million, with core growth of 1.4%, slightly better than initial guidance [11][5] - Adjusted EBITDA was $187 million, representing a margin of 22.1%, a decrease of 60 basis points year-over-year [13] - Gross margin expanded to 40.7%, exceeding the 40% threshold for the fourth consecutive quarter [13] - Adjusted earnings per share increased by approximately 6% to $0.36 [14] - Free cash flow for the first quarter was an outflow of $19 million, consistent with normal seasonal performance [23] Business Line Data and Key Metrics Changes - In the Power Transmission segment, revenues were $527 million, translating to a core increase of approximately 2% [14] - Automotive replacement channel sales grew mid single digits, while industrial OEM sales experienced a slight decline [15] - Fluid Power segment sales were $320 million, with core sales approximately flat [15][16] - Personal mobility saw over 30% growth, contributing positively to overall performance [12] Market Data and Key Metrics Changes - North America returned to growth with low single-digit core sales growth, driven by mid-teens growth in automotive replacement [18] - EMEA and South America both experienced year-over-year declines [18] - China core sales expanded by 3.5%, with broad-based growth in industrial end markets [20] - Personal mobility growth was robust, particularly in Europe and Asia, with no observed pre-buy activity [62] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts through price increases and operational initiatives [8][26] - Management emphasized the importance of maintaining a strong balance sheet and capital deployment capacity [30] - The company is committed to advancing enterprise initiatives aimed at improving cost structures and mitigating tariff headwinds [29] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing uncertainty in the market due to tariffs but expressed confidence in the team's ability to manage through economic cycles [10][29] - Customer demand in the second quarter has been consistent with initial guidance, though potential risks remain [28] - The company is prepared to implement action plans should demand soften relative to expectations [29] Other Important Information - The company repurchased $13 million of shares during the quarter, with over $100 million remaining under the existing authorization [23] - The net leverage ratio improved to 2.3 times, a slight decrease year-over-year [23] Q&A Session Summary Question: Can you discuss the tariff impact and competitive positioning? - Management expects to offset approximately 75% to 80% of the $50 million tariff impact with price increases, with the remainder offset through operational initiatives [36][38] - The company believes it has a competitive advantage due to its in-region, for-region manufacturing strategy [40] Question: What is the status of internal initiatives and their relation to current trends? - Management reported solid execution on internal initiatives, with progress ahead of schedule contributing to gross margin performance [44] Question: How is demand evolving in different end markets? - Management noted that while automotive builds are expected to decline, the automotive replacement market remains robust [56][58] - Personal mobility has shown strong growth, with no pre-buy activity observed [62] Question: What is the company's approach to pricing and tariff mitigation? - Price increases are expected to be implemented in Q2, with realization impacting Q3 [116] - The company plans to manage compressible costs to protect underlying operating margins [46] Question: Can you provide an update on channel partners and inventory? - Management indicated that channel partners have not shown significant changes in buying behavior, maintaining a balance between sales in and sales out [100]

Company Performance - Gates Industrial (GTES) reported quarterly earnings of $0.36 per share, exceeding the Zacks Consensus Estimate of $0.33 per share, and up from $0.31 per share a year ago, indicating a positive earnings surprise of 9.09% [1][2] - The company achieved revenues of $847.6 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.58%, although this represents a decline from year-ago revenues of $862.6 million [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.40, with expected revenues of $892.53 million, and for the current fiscal year, the consensus EPS estimate is $1.44 on revenues of $3.41 billion [8] - The estimate revisions trend for Gates Industrial is mixed, resulting in a Zacks Rank 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [7] Industry Context - Gates Industrial operates within the Zacks Manufacturing - General Industrial industry, which is currently ranked in the bottom 40% of over 250 Zacks industries, indicating potential challenges for stock performance [9] - The performance of Gates Industrial's stock may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [9]