Survey: Pricing, Gross Margins Hold Steady in Second Quarter

The second quarter Baird Industrial Distribution Survey indicates that average second quarter year over year revenues were slightly worse than the first quarter, with the third quarter forecast slightly better than current quarter trends. Encouragingly, pricing and gross margins appear to be holding relatively steady while inventory levels continue to decline with no re-stock expected in the near-term.

The bottoming process appears to be underway in most industries," said David Manthey, CFA, Baird's senior research analyst who leads the firm's Industrial Distribution sector research. "With conditions stabilizing and inventories at very low levels throughout most supply chains, industrial distributors should continue to see improvement into 2009."

Survey Details
Baird's ...

The second quarter Baird Industrial Distribution Survey indicates that average second quarter year over year revenues were slightly worse than the first quarter, with the third quarter forecast slightly better than current quarter trends. Encouragingly, pricing and gross margins appear to be holding relatively steady while inventory levels continue to decline with no re-stock expected in the near-term.

"The bottoming process appears to be underway in most industries," said David Manthey, CFA, Baird’s senior research analyst who leads the firm’s Industrial Distribution sector research. "With conditions stabilizing and inventories at very low levels throughout most supply chains, industrial distributors should continue to see improvement into 2009."

Survey Details
Baird’s Industrial Distribution Research Team collected feedback on second quarter results from nearly 300 independent and captive distributors with combined annual revenue of nearly $50 billion. Key survey findings include:
 

  • Average revenues declines were slightly worse in the second quarter at -16.0% year over year compared to 13.4% year over year last quarter.
     
  • Pricing appears to be holding relatively steady, as average pricing was -1.7% year over year in the second quarter compared to -1.4% year over year last quarter. 
     
  • Respondents’ third quarter outlook is slightly better than current quarter trends at 11.6% year over year.
     
  • Inventories continued to decline with no re-stock in sight near-term.
     
  • Gross margins remain relatively stable, with most reporting no material change and overall gross margin percentages declining approximately 33bps year over year on average.
     

 

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.