Applied Industrial Technologies reports Q1 EPS $2.39, consensus $2.09

Reports Q1 revenue $1.1B, consensus $1.1B. CEO Neil Schrimsher commented, “We delivered a positive start to FY24 with EBITDA and EPS growing a respective 12% and 21% over the prior year. Considering the expected moderating sales growth environment, these results reflect another solid quarter of operational execution from our Applied team, including favorable margin performance beyond LIFO expense normalization…Overall, we had a productive Q1 that positions us to deliver solid earnings and free cash growth in FY24. We are raising FY24 guidance to primarily reflect Q1 earnings performance, our recent Service Center acquisitions, and lower LIFO expense assumptions. We have yet to see any broad signs of a material demand reduction across our end markets, though we expect sales growth will remain muted near term as production activity and supply chains continue to normalize. In addition, Q2 is our most difficult comparison for the year, as reflected in October to date sales trending relatively unchanged on an organic basis compared to prior-year levels. Overall, sales growth is playing out largely as expected year to date, and we remain focused on driving industry leading operational execution as we make further progress on our strategic objectives. While macro uncertainty remains, we are uniquely positioned to navigate the current environment and deliver outsized earnings growth long term given our differentiated industry position, leading technical capabilities, self-help margin tailwinds, scaling automation platform, and balance sheet capacity.”