Gross margin was 30.4%, down 19 basis points from 30.6% in the prior-year quarter. CFO Dave Wells said LIFO expense totaled $6.9 million, above the company’s expectations and up from $0.7 million a year earlier, creating a 54-basis-point year-over-year drag on gross margin. Wells said the LIFO increase reflected broader product inflation and supplier price increases, as well as the company’s decision to increase inventory investment based on its outlook and “firming demand” developing across the business.In ...

Applied Industrial Technologies (NYSE:AIT) Q2 2026 Earnings call January 27, 2026 10:00 AM ET Company ParticipantsBrett Linzey - Managing DirectorChris Dankert - Managing DirectorDave Wells - VP, CFO, and TreasurerDavid Manthey - Managing DirectorNeil Schrimsher - President and CEORyan Cieslak - Director of Investor Relations and TreasurySabrina Abrams - VPConference Call ParticipantsChristopher Glynn - Equity AnalystKen Newman - VP and Equity Research AnalystOperatorWelcome to the fiscal 2026 second quarte ...

For the quarter ended December 2025, Applied Industrial Technologies (AIT) reported revenue of $1.16 billion, up 8.4% over the same period last year. EPS came in at $2.51, compared to $2.39 in the year-ago quarter.The reported revenue represents a surprise of -0.78% over the Zacks Consensus Estimate of $1.17 billion. With the consensus EPS estimate being $2.48, the EPS surprise was +1.41%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectation ...

Fiscal Q2 2026 Recap January 27, 2026 - The Premier Provider of Advanced Motion, Power, Control, & Automation Solutions to Critical Industrial Infrastructure - Safe Harbor Statement This presentation contains statements that are forward-looking, as that term is defined by the Securities and Exchange Commission in its rules, regulations and releases. Applied intends that such forward-looking statements be subject to the safe harbors created thereby. Forward-looking statements are often identified by qualifie ...

Core Viewpoint - Applied Industrial Technologies reported a strong second quarter for fiscal 2026, with net sales of $1.2 billion, reflecting an 8.4% increase year-over-year, driven by acquisitions and organic growth in key segments [2][3]. Financial Performance - Net sales for the quarter reached $1.2 billion, an increase of 8.4% compared to the previous year, with a 6.0% contribution from acquisitions and a 0.2% positive impact from foreign currency translation [2]. - Organic sales growth was 2.2%, with a 2.9% increase in the Service Center segment and a 0.5% increase in the Engineered Solutions segment [2]. - The company reported net income of $95.3 million, or $2.51 per share, and EBITDA of $140.4 million [2][3]. Management Commentary - The CEO highlighted effective management through a mixed end-market backdrop and expressed optimism for stronger growth in the second half of the fiscal year, with early signs of sales momentum [3]. - The company is focusing on internal initiatives and channel execution to drive gross and EBITDA margin performance, despite challenges from LIFO expenses and prior-year comparisons [3]. Fiscal 2026 Guidance - The company adjusted its fiscal 2026 EPS guidance to a range of $10.45 to $10.75, reflecting a more optimistic outlook for sales growth of 5.5% to 7.0% [4]. - Updated guidance includes an organic sales growth expectation of 2.5% to 4.0% and an EBITDA margin of 12.2% to 12.4% [4]. Acquisition Activity - Applied Industrial Technologies announced the acquisition of Thompson Industrial Supply Inc., expected to generate annual sales of approximately $20 million in the first year [5][6]. - This acquisition is aimed at enhancing the company's service center capabilities and expanding its footprint in the industrial market [6]. Dividend Announcement - The Board of Directors approved an 11% increase in the quarterly cash dividend to $0.51 per common share, marking the 17th dividend increase since 2010 [7].

Core Insights - Fastenal reported record sales of $8.2 billion for the full year 2025, reflecting a nearly 9% increase compared to 2024, with net income rising 9.4% to $1.26 billion [2] - The company emphasized a strategy focused on key accounts and deeper relationships with large customers, resulting in a 7% growth in total contract customer count [1][4] - Fastenal's fourth-quarter sales increased by 11% year over year to $2.03 billion, with net income up 12.2% to $294.1 million [3][7] Sales and Growth - Daily sales in the fourth quarter were up just over 11%, contributing to the overall strong performance [3][7] - The company expects double-digit net sales growth in 2026, driven by ongoing market share gains and the expanding role of Fastenal Managed Inventory (FMI) technology [4][20] Digital and Inventory Management - FMI and digital channels accounted for 62.1% of fourth-quarter sales, with nearly half of sales transacted through FMI technology [6][11] - The installed base of FMI devices grew by 7.6% year over year, reaching approximately 136,600 units [10] Margin and Cost Management - Gross margin declined by 50 basis points in the fourth quarter due to timing effects, but pricing was neutral for the year [5][13] - Selling, General and Administrative (SG&A) expenses decreased to 25.4% of sales, reflecting cost discipline [15] Cash Flow and Shareholder Returns - Operating cash flow was approximately $370 million, representing 125% of net income, with net capital spending in 2025 at $230 million [16][17] - The company returned just over $1 billion in dividends during 2025, which was about 80% of net income [18] Market Conditions - The macroeconomic backdrop was described as mixed, with industrial production and PMI data showing softness, but improvement was noted late in the quarter [19]

2025 Fourth Quarter Investor Teleconference January 20, 2026 1 Safe Harbor Statement All statements made herein that are not historical facts (e.g., future operating results, net sales growth, long-term share gains, and business activity, as well as expectations regarding operations, including gross and operating income margin, eBusiness DSR sales growth, weighted FMI technology signings, operating costs (including SG&A), capital expenditures, sales through our digital footprint, cash flow generation, our a ...

Economic Policy and Market Impact - President Trump's upcoming speech is expected to outline economic priorities and policy initiatives, with a focus on tax policy changes, infrastructure spending, regulatory approaches, and trade policy, particularly regarding China [1][2] - The speech's timing amid earnings season and critical economic data releases creates a complex backdrop for market reactions, as political rhetoric and corporate results will compete for investor attention [1][2] Economic Data Releases - Thursday will see a significant convergence of economic data, including the Q3 GDP revision and the November Core PCE Price Index, both released at 8:30am, which could lead to market volatility as investors assess growth and inflation data simultaneously [4] - The GDP revision will provide insights into consumer spending, business investment, and net exports, while the Core PCE Price Index will be crucial for understanding inflation trends [4] Company Earnings Insights - Netflix's earnings report will be critical for understanding the streaming industry's economics, including subscriber growth sustainability and content investment returns, especially in light of competition from platforms like Disney+ and Amazon Prime Video [5] - Intel's earnings will be a key indicator of its manufacturing transformation and competitive positioning in the semiconductor market, while GE Aerospace's results will provide insights into commercial aviation demand and defense spending trends [7] - Johnson & Johnson's earnings will offer perspectives on pharmaceutical demand and healthcare spending trends, while Procter & Gamble's results will assess consumer resilience in personal care and household products [8]

Core Viewpoint - Applied Industrial Technologies will release its fiscal 2026 second quarter results on January 27, 2026, before market opens [1] Group 1: Financial Results Announcement - The fiscal 2026 second quarter ended on December 31, 2025 [1] - A conference call will be held at 10 a.m. ET on the same day to discuss the results and outlook [2] - The call will be accessible via a live audio webcast and supplemental presentation on the Investor Relations site [2] Group 2: Company Overview - Applied Industrial Technologies is a leading value-added distributor and technical solutions provider [3] - The company specializes in industrial motion, fluid power, flow control, automation technologies, and related maintenance supplies [3] - It serves MRO, OEM, and new system install applications across various industrial markets [3]

Financial Data and Key Metrics Changes - Average daily sales increased by 4% year over year, reaching approximately $966 million for Q1 2026, primarily driven by a price increase of 4.2% [11][20] - Gross margin for the quarter was 40.7%, consistent with expectations and flat compared to the prior year [15][22] - Reported operating margin was 7.9%, while adjusted operating margin was 8.4%, slightly above the midpoint of expectations [16][23] - GAAP EPS was $0.93, up from $0.83 in the prior year, and adjusted EPS was $0.99, compared to $0.86, reflecting a 15% improvement [23] Business Line Data and Key Metrics Changes - Core customer sales grew approximately 6% year over year, while national accounts improved by 3%, and public sector sales declined by 5% due to the federal government shutdown [12][21] - Daily sales in vending increased by 9% year over year, representing 19% of total company sales, while sales to customers with an implant program grew by 13% [21] Market Data and Key Metrics Changes - Demand across primary markets was described as stable, with aerospace remaining strong, while automotive and heavy truck showed some softness [17] - Average daily sales for fiscal December improved approximately 2.5% year over year, despite a month-over-month decline of roughly 20% due to holiday timing and customer shutdowns [18][19] Company Strategy and Development Direction - The company is focused on reconnecting with core customers and optimizing its sales organization to enhance customer experience and cost structure [4][5] - A growth forum is planned to engage approximately 1,400 associates with suppliers, aimed at accelerating growth through collaboration [7][8] - The company aims to maintain a strong culture and improve financial visibility through technology enhancements [9][10] Management's Comments on Operating Environment and Future Outlook - Management described the operating environment as stable, with expectations for continued traction on growth initiatives and price stability [17][30] - Despite challenges in December, management remains confident in achieving mid-single-digit growth for the fiscal year, supported by ongoing productivity initiatives [30] Other Important Information - The company reaffirmed its commitment to reducing greenhouse gas emissions by 15% by 2030 and has been recognized as a best company to work for [10] - Free cash flow for the quarter was approximately $7.4 million, representing about 14% of net income, with expectations of 90% free cash flow conversion for the fiscal year [24] Q&A Session Summary Question: What drove the 4% price increase and expectations for 2Q? - Management indicated that the price increase was in line with expectations, driven by prior price actions and ongoing inflation, particularly in metalworking [32][34] Question: What is the impact of IEEPA tariffs if ruled invalid? - Management noted that there would be an initial hit from lower inventories, followed by benefits as lower-cost inventory is received [36] Question: Clarification on the mid-single-digit growth comment? - Management expressed confidence in outperforming historical seasonal trends due to price and growth initiatives, despite typical seasonality suggesting lower growth [38][40] Question: Insights on public sector sales normalization? - Management expects public sector sales to return to normal levels, with a 50 basis point benefit anticipated in 2Q if no further government shutdown occurs [42] Question: Details on cost measures and service model adjustments? - Management explained that recent cost measures were aimed at optimizing the service organization to align with sales optimization efforts [43][46] Question: Expectations for gross margin and operating expenses in 2Q? - Management anticipates gross margins to be around 40.8% with potential upside, while operating expenses are expected to be variable based on sales growth [48][49]