Applied Industrial Q2 sales, profit just short of estimates

Overview

• Industrial distributor's fiscal Q2 net sales rose 8.4% yr/yr, slightly missing analyst expectations

• Net income for fiscal Q2 slightly missed analyst expectations

• Company announced acquisition of Thompson Industrial Supply Inc.

Outlook

• Applied Industrial Technologies sees fiscal 2026 EPS at $10.45 to $10.75 (prior $10.10 to $10.85)

• Company expects fiscal 2026 sales growth of 5.5% to 7.0% (prior range up 4.0% to 7.0%)

• Applied Industrial Technologies anticipates ongoing macro uncertainty impacting customer spending

Result Drivers

• ACQUISITIONS - Sales growth driven by acquisitions, contributing 6.0% to the increase

• LIFO EXPENSE - Higher than expected LIFO expense impacted earnings

• SEGMENT PERFORMANCE - Service Center segment saw 2.9% growth, while Engineered Solutions segment increased by 0.5%

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the industrial machinery & equipment peer group is "buy"

• Wall Street's median 12-month price target for Applied Industrial Technologies Inc is $300.00, about 6.6% above its January 26 closing price of $281.54

• The stock recently traded at 25 times the next 12-month earnings vs. a P/E of 24 three months ago

Press Release: ID:nBw2W4qdGa

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact RefinitivNewsSupport@thomsonreuters.com.