Electrical supplies distributor Wesco reported its 2024 fourth quarter and full-year financial results on Feb. 11, which showed a slight increase in sales during 4Q, but a modest annual decline.

4Q Results

The Pittsburgh-based company posted total 4Q sales of $5.4 million, up 0.5% year-over-year, with organic sales also up 2.4%. Wesco said the organic sales increase reflects volume growth in the Communications and Security Solutions (CSS) segment, partially offset by volume decline in the UBS segment. Compared to 3Q24, total sales increased 0.2%.

In the Store: MDM’s U.S. MRO Market Trends Report 

Wesco’s 4Q gross margin of 21.2% was down 20 basis points year-over-year and up 10 bps sequentially. Meanwhile, 4Q operating profit of $301.1 million fell 4.7% year-over-year as operating margin of 5.5% was down 30 bps year-over-year and 70 bps sequentially. Adjusted EBITDA margin of 6.7% was down 30 bps year-over-year and down 60 bps sequentially.

“We are pleased with our return to sales growth in the fourth quarter sparked by more than 70% growth year-over-year in our global Data Center business, 20% growth in Broadband Solutions and renewed positive sales momentum in Electrical and Electronic Solutions,” Wesco Chairman, President and CEO John Engel said in the company’s financial release.  “This was partially offset by a slowdown with industrial customers and the expected continued weakness in our utility business in the fourth quarter. With that said, our positive momentum has carried into January with preliminary sales per workday, adjusted for M&A, up 5% versus prior year.”

MDM Case Study: Wesco (Premium access here) 

By Wesco business unit in 4Q:

• Electrical & Electronic Solution (EES) sales of $2.1 billion fell 1.3% year-over-year, with organic sales up by 1.0%. Adjusted EBITDA rose by 8.0% year-over-year.
• Communications & Security Solutions (CSS) sales of $2.04 billion increased 1.6% year-over-year, with organic sales up 5.2%. Adjusted EBIDTA rose by 8.2% year-over-year.
• Utility & Broadband Solutions (UBS) sales of $1.3 billion, decreased 3.8% year-over-year, while organic sales decreased 2.0%. Adjusted EBITDA rose by 10.8% year-over-year.

2024 Results

For the full year, Wesco’s 2024 total sales were $21.8 billion, down 2.5% year-over-year from 2023’s $22.4 billion. The company said its 0.6% organic sales decline reflected a volume decrease in the UBS and EES segments, partially offset by a volume increase in the CSS Segment and price inflation in the EES and UBS segments.

Wesco’s full-year gross margin of 21.6% was flat compared to the same period a year prior. Full-year operating profit of $1.2 billion, decreased 13% year-over-year as operating margin of 5.6% was down 70 bps year-over-year.

MDM’s 4Q24 MarketPulse Report (store link) 

“In 2025, we expect organic sales to grow 2.5% to 6.5% and operating margin to expand, as all three business units are expected to deliver profitable growth,” Engel added. “We expect to generate $600 to $800 million of free cash flow and I am pleased to announce that we plan to increase our common stock dividend by 10% again this year to $1.82 per share while continuing our share buyback program. As we outlined in our recent Investor Day, we are committed to substantial value creation from operational improvements, digital transformation, and our capital allocation strategy including additional M&A.

Wesco was No. 1 on MDM’s Top Distributors List for Electrical/Data/Security Supplies.