Global Industrial Co.—an industrial products distributor that does more than half of its sales transactions via ecommerce and was formerly known as Systemax—is not anticipating a big shift in buyer behavior, or scurrying to find big new supplies of inventory for personal protective equipment (PPE) products because of the Delta variant, the highly contagious version of COVID-19 now racing across the US.
Nonetheless, Global Industrial has the flexibility and supplier sources to scale up quickly, if need be, CEO Barry Litwin told analysts on the distributor’s second-quarter earnings call.
“I think certainly across the country, as you see some of the indoor requirements at the state level, certainly with schools and other areas starting to require some of the masks back, we would expect to see some light elevation in that area,” Litwin told analysts. “I don’t think necessarily near where the country saw last year at this time, but certainly, we’ve seen a little bit recently, but … not to last year’s levels by any means.”
For now, Global Industrial, which operates seven distribution centers across the U.S. and Canada, says it has ample inventory—and knows where to procure more, Litwin said. “I think we have enough given the lower level of demand at this point, but we’re perfectly positioned to be able to go into the market and procure more if needed,” he said. “So, we track all of our inventory levels based on the run rates of all the different commodities we’d sell—we’re definitely prepared to go in and make buys if we see volume coming up to those levels beyond our safety stocks.”
For the second quarter, Global Industrial reported:
- Ecommerce sales transactions increased 100 basis points year over year to 57% of total transactions;
- A 12.6% increase in total sales to $272.6 million from $242.1 million in the second quarter of 2020.
- Net income from continuing operations was $21.1 million vs. $15.3 million in the second quarter of 2020.
Business is good thus far this year, but Global Industrial will continue to be flexible as it confronts ongoing issues, including supply chain challenges, Litwin told analysts. “Supply chain, labor availability and freight disruptions continue to be widely reported across all segments of the economy,” he said. “Similar to how we responded to the need for PPE products last year, we are utilizing our operational flexibility and entrepreneurial spirit to proactively manage these challenges.”
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