Distribution Solutions Group (DSG) on Thursday reported stronger sales and profit totals in its most recent quarter, but the company's earnings dipped sharply compared to the same period last year.
The Fort Worth-based parent of Lawson Products, TestEquity and Gexpro Services posted nearly $518 million in Q3 revenue, an increase of 10.7% compared to July through September of 2024.
The company said organic sales rose by 6%, while three acquisitions completed late last year contributed $23.3 million to the overall revenue increase of nearly $50 million. DSG officials added that sales rose in each of its reporting segments, particularly within Gexpro and in its Canadian division. Lawson's sales rose from nearly $118 million to $121.5 million.
Gross profit also climbed from $158.8 million to $170.3 million year-over-year, while operating income rose from $18.9 million up to $23.6 million.
Net income, however, plummeted from $21.9 million in the third quarter of last year down to $6.5 million, which translated to diluted earnings that fell from $0.46 per share down to $0.14 per share.
DSG Chairman and CEO Bryan King said in the company's earnings statement that investments in the business and "industry-wide U.S. manufacturing softness" combined to push margins below 10%. He also pointed to "product and customer mix dynamics" and higher employee-related costs, including for healthcare.
King said that the company — no. 16 on ID’s 2025 Big 50 — had a "cautious outlook" amid "tougher year-over-year comparisons and ongoing economic uncertainty," but he added that DSG is "entering the final stretch of the year with solid momentum and confidence in our growth strategy."
