Let’s dig into the relative performance of MSC Industrial (NYSE: MSM) and its peers as we unravel the now-completed Q1 maintenance and repair distributors earnings season.

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 Q1. As a group, revenues were in line with analysts’ consensus estimates.

Thankfully, share prices of the companies have been resilient as they are up 8.3% on average since the latest earnings results.

MSC Industrial (NYSE: MSM)

Founded in NYC’s Little Italy, MSC Industrial Direct (NYSE: MSM) provides industrial supplies and equipment, offering vast and reliable selection for customers such as contractors

MSC Industrial reported revenues of $891.7 million, down 4.7% year on year. This print fell short of analysts’ expectations by 0.8%. Overall, it was a mixed quarter for the company with a solid beat of analysts’ EBITDA estimates but a slight miss of analysts’ organic revenue estimates.

Erik Gershwind, Chief Executive Officer, said, "During our fiscal second quarter, we continued expanding our solutions footprint, maintained momentum in the Public Sector, and completed important milestones in reenergizing our core customer growth rate. This included launching our website upgrades and an enhanced marketing campaign. Amid a challenging operating environment with industrial demand at low levels, we generated solid results that landed within our guidance range."

MSC Industrial delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 5.7% since reporting and currently trades at $83.81.

Read our full report on MSC Industrial here, it’s free.

Best Q1: 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 $321 million, flat year on year, outperforming analysts’ expectations by 4.6%. The business had an incredible quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Global Industrial pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 20.6% since reporting. It currently trades at $26.70.

Is now the time to buy Global Industrial? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: 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 $478 million, up 14.9% year on year, falling short of analysts’ expectations by 3.8%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.

Interestingly, the stock is up 8.6% since the results and currently trades at $28.29.

Read our full analysis of Distribution Solutions’s results here.

W.W. Grainger (NYSE: GWW)

Founded as a supplier of motors, W.W. Grainger (NYSE: GWW) provides maintenance, repair, and operating (MRO) supplies and services to businesses and institutions.

W.W. Grainger reported revenues of $4.31 billion, up 1.7% year on year. This number was in line with analysts’ expectations. Aside from that, it was a satisfactory quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates but full-year revenue guidance slightly missing analysts’ expectations.

The stock is up 6.5% since reporting and currently trades at $1,090.

Read our full, actionable report on W.W. Grainger here, it’s free.

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 $256 million, up 57.7% year on year. This result lagged analysts' expectations by 6.7%. Aside from that, it was a very strong quarter as it put up a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

VSE Corporation delivered the fastest revenue growth but had the weakest performance against analyst estimates among its peers. The stock is up 10.1% since reporting and currently trades at $129.80.

Read our full, actionable report on VSE Corporation here, it’s free.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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