Industrial tool manufacturer Enerpac posted a 6% increase in sales in its latest quarter and the strongest growth in its industrial product segment in a decade.
But the Milwaukee-based tool supplier also reported a drop in earnings and a decline in its gross margin.
Enerpac Tool Group Corp. reported net sales of $154.8 million in the quarter ended Feb. 28, up from $145.5 in its previous second quarter. Sales were up 2% over that span on an organic basis, including 1% growth in its Industrial Tool & Service division.
Product sales in the IT&S segment were up 6% on an organic basis, and company officials also highlighted “mid-single digit growth” in order rates.
Net earnings, meanwhile, fell from $20.9 million in its previous second quarter down to $16.3 million, and its gross profit margin declined to 46.6%, a drop of 410 basis points. Enerpac officials attributed the latter decline to continued pressure on its service business, and said that margin in the product business “remained strong.”
Despite that strength in products, company officials said that pressure on services in its Europe, Africa and the Middle East region could be “further exacerbated by the conflicts in the Middle East,” and that it had narrowed its forecast to account for those factors. The company expects full-year net sales of between $635 million and $650 million, and organic sales growth of 1% to 3%.
