Post-Waterworks Sale, HD Supply Reports Solid Gains In Q2

With the $2.5 billion sale of its Waterworks segment now behind it, HD Supply posted solid year-over-year sales and profit gains in Q2, along with strong daily sales growth in May through July and into August.

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HD Supply — No. 4 on Industrial Distribution's 2017 Big 50 List — on Wednesday reported its fiscal results for its 2017 second quarter, which ended June 30.

Like in Q1, the figures were led by a solid increase in year-over-year sales. The Q2 results did not include the performance of the company's recently-divestment Waterworks segment. Its $2.5 billion sale to private investment firm Clayton, Dubilier & Rice was completed Aug. 1.

In Q2, HD Supply total sales of $1.35 billion increased 5.4 percent year-over-year. Q1 total sales — which included $657 million from Waterworks — were $1.87 billion.

Total Q2 profit of $442 million dwarfed the $98 million from a year ago, primarily due to a $323 million tax benefit within discontinued operations from Waterworks. Q2 operating profit of $180 million increased 5.3 percent year-over-year, while gross profit of $539 million increased 5.1 percent. Adjusted EBITDA increased 2.5 percent year-over-year to $208 million.

By business segment in Q2:

  • Facilities Maintenance sales of $769 million increased 3.8 percent year-over-year, with adjusted EBITDA up 3.3 percent. Q2 sales were up 12.8 percent from Q1.
  • Construction & Industrial sales of $584 million increased 7.4 percent year-over-year, with adjusted EBITDA up 1.5 percent. Q2 sales were up 9.0 percent from Q1.

By month in Q2:

  • May sales were $412 million, with average daily sales up 6.9 percent year-over-year.
  • June sales were $408 million, with average daily sales up 3.4 percent year-over-year.
  • July sales were $532 million, with average daily sales up 5.6 percent.

Preliminary August sales were $435 million, with average daily sales up 6.7 percent year-over-year. Average daily sales growth at Facilities & Maintenance was approximately 4.3 percent year-over-year, and 9.8 percent at Construction & Industrial.

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