Global Industrial Co. reported stronger sales and earnings in the third quarter of the year, but its gross margin and operating margin each slipped compared to the same window last year.
The Long Island-based distributor — no. 19 on ID’s 2023 Big 50 — posted nearly $355 million in net sales between July and September, up 18.8% from the $299 million reported in the same quarter of 2022. Although most of that increase was attributed to the company’s acquisition of Indoff earlier this year, sales from continuing operations were still up by 3.2% — the first time the company’s organic year-over-year sales increased since the third quarter of 2022.
Net income from continuing operations increased from $20.3 million to $20.7 million over that span, translating to net income per diluted share that edged up from $0.53 to $0.54. And although gross profit rose from nearly $107 million to more than $116 million, gross margin declined from 35.7% last year to 32.8% in the latest quarter; operating margin dropped from 9.2% to 8%.
Global Industrial CEO Barry Litwin attributed the organic growth to volume improvement, which helped overcome “continued price headwinds.” Indoff’s comparatively lower margin profile contributed to the decline in gross margin, he added.
“Top-line performance was once again led by our e-commerce channel as recent investments and actions to drive digital transformation and enhance the online shopping experience are delivering returns,” Litwin said in a statement.
Through the first nine months of the year, consolidated sales were up by more than 5%, but they remained slower when excluding the impact of the Indoff acquisition. Net income per diluted share from continuing operations was off by nearly 15% over that span.
