After an extremely strong 1Q earnings report that included record first quarter sales, the Wesco has decided to increase its full-year outlook.
“Based on this quarter’s results, strong demand trends, the continued expansion of our backlog, and the significant growth of our cross-sell synergies, we are increasing our full-year sales outlook from the previous range of 5% to 8% to a range of 12% to 15%,” David Schulz, Senior Vice-President and Chief Financial Officer told reporters during Wesco’s earnings conference call. “Our assumption for market growth is 9% to 11% including the benefit of price. We expect the demand environment for our products, services, and solutions to continue to be strong.”
Chairman, President, and CEO John Engel described the quarter as “by far the strongest quarter since the new Wesco was formed by the transformational combination of Wesco and Anixter in June of 2020.”
Engel added the second quarter of this year is off to a very strong start, despite the supply chain challenges distributors are facing right now.
“There are clearly supply chain challenges, but it’s our view that it’s our job, that being Wesco as a leading B2B distributor, to manage them on behalf of and to the benefit of our customers,” Engel said in the conference call. “In many cases were going to work kitting, staging, storing different components, modules, and products, and subsystem for full solutions as suppliers ship various pieces to us. And then we put them together as a full solution for our customers.”
Along with that growth comes an investment in the future. And that investment will be in digitization and data.
“We expect to spend approximately a $120 million in combined capital expenditures in IT and digital investments,” Schulz added.
Engel believes it’s an investment that will bring a great return.
“We are continuing to invest in our digital transformation effort, which will raise Wesco to an even higher level of performance, operating efficiency, and customer loyalty,” Engel told reporters.
“It is our digital applications that are going to unlock the power of our big data. Our big data really is, if you think about it, we have significantly more data on our customers, their operations, their demand profiles, what products go with what in what sequence.”
Engel goes so far as to call his big data “one of our top assets” even though it will not show up on a balance sheet.
“When we put the two companies together, one of our top priorities is getting both respective companies’ big data and putting it into one world-class data lake. And we’ve done that,” Engel explained. “We’re at the point now where we’re increasingly starting to unlock the power of that big data through a series of digital applications.”