WESCO International (WCC) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales declined 4.6% year-over-year to $5.48B, with organic sales down 0.8% but up 4.7% sequentially; reported sales were impacted by the WIS divestiture.

• Adjusted EBITDA margin was 7.3%, up 90–100 bps sequentially but down 40 bps year-over-year; gross margin improved to 21.9%, up 30 bps year-over-year and 60 bps sequentially.

• Record first half free cash flow of $500M; $300M in share repurchases completed in Q2 using WIS divestiture proceeds.

• Net income attributable to common stockholders rose to $217.7M ($4.28 per diluted share), driven by a $102.9M gain on the WIS divestiture.

• Announced and closed acquisitions of entroCIM and Storeroom Logix to expand software capabilities.

Financial highlights

• Q2 2024 net sales: $5.48B, down 4.6% year-over-year; organic sales declined 0.8% year-over-year but rose 5% sequentially.

• Adjusted EBITDA: $400M (7.3% margin), down from $442M (7.7%) in Q2 2023.

• Adjusted EPS: $3.21, down from $3.71 in Q2 2023.

• Operating cash flow for H1 2024 was $523M; free cash flow reached $497M–$500M.

• Financial leverage ratio stood at 2.9x as of June 30, 2024.

Outlook and guidance

• Full-year 2024 organic sales growth expected at (1.5)% to 0.5%, with reported sales to decline 3.5% to 1.5%.

• Adjusted EBITDA margin guidance narrowed to 7.0%–7.3%, with midpoint ~$1.55B; adjusted EPS $12.00–$13.00.

• Free cash flow guidance reaffirmed at $800M–$1B.

• Management expects continued mixed economic environment and customer delays in utility and broadband through H2 2024.

• Sufficient liquidity of $1.5B as of June 30, 2024, supports share repurchases, dividends, debt reduction, and digital initiatives.