Global Industrial Company Q3 FY2025 earnings call

• Delivered second consecutive quarter of revenue growth and strong profitability.
• Revenue grew each month in the period and continued into early Q4.
• Canadian operations had second consecutive quarter of strong top line expansion with operating leverage improvements.
• Reframing go-to-market strategy to focus on key accounts, expand solutions/products, and enhance CRM and processes.
• Global Industrial Trade Show reinforced progress towards being a better channel partner for vendors and serving customers better.

Revenue for the third quarter was $353.6 million, an increase of 3.3% from Q3 2024. U.S. revenue rose 2.9% and Canada revenue improved 12.3% in local currency. Gross margin was 35.6%, a 160 basis point increase from Q3 2024. Operating income was $26.3 million, up over 18%. The largest strategic accounts drove growth, while smaller transactional customers decreased. Canadian operations had strong top line expansion, with operating leverage improving due to investments in distribution, supply chain, and people.

• Expect continued year-over-year margin expansion in Q4, though sequential quarter may have margin pullback.
• Pricing was mid-single digits in Q3, expected to be consistent or slightly higher in Q4 due to timing of August price increase.
• Goal to manage to price/cost neutral, monitoring tariff fluidity.

• Tariff uncertainty with potential additional tariffs impacting margins.
• Historically Q4 has softer margins due to product mix and peak season freight surcharges.

Q: How much price impacted the quarter and outlook for Q4?

A: Pricing was mid-single digits in Q3, including an August price increase. Expected to be consistent or slightly higher in Q4, monitoring tariff fluidity.

Q: Growth of large strategic accounts and outlook?

A: Strategic accounts had momentum, repositioning org for 2026 with early stages of industry/sector alignment.

Q: Health of core SMB customers and TAM?

A: Core customer retention healthy, TAM in industrial distribution is double-digit, specific number to be shared later.

Q: SG&A expense growth?

A: Year-over-year change in SG&A due to variable comp timing, linked to profit growth vs prior year decline.