Global Industrial (NYSE:GIC) Delivers Impressive Q1, Stock Soars
April 29, 2025
Industrial and commercial distributor Global Industrial (NYSE:GIC) reported Q1 CY2025 results beating Wall Street’s revenue expectations , but sales were flat year on year at $321 million. Its GAAP profit of $0.35 per share was 75% above analysts’ consensus estimates.
Formerly known as Systemax, Global Industrial (NYSE:GIC) distributes industrial and commercial products to businesses and institutions.
Sales Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Global Industrial’s 5.7% annualized revenue growth over the last four years was tepid. This was below our standard for the industrials sector and is a poor baseline for our analysis.
Long-term growth is the most important, but within industrials, a stretched historical view may miss new industry trends or demand cycles. Global Industrial’s annualized revenue growth of 6.8% over the last two years is above its four-year trend, but we were still disappointed by the results.
This quarter, Global Industrial’s $321 million of revenue was flat year on year but beat Wall Street’s estimates by 4.6%.
We also like to judge companies based on their projected revenue growth, but not enough Wall Street analysts cover the company for it to have reliable consensus estimates.
Today’s young investors likely haven’t read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on
a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next
.
Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
Global Industrial was profitable over the last five years but held back by its large cost base. Its average operating margin of 7.8% was weak for an industrials business. This result is surprising given its high gross margin as a starting point.
Analyzing the trend in its profitability, Global Industrial’s operating margin decreased by 1.3 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Global Industrial’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.
This quarter, Global Industrial generated an operating profit margin of 5.7%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Global Industrial’s full-year EPS grew at an unimpressive 5.3% compounded annual growth rate over the last five years, worse than the broader industrials sector.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
Sadly for Global Industrial, its EPS declined by 7.3% annually over the last two years while its revenue grew by 6.8%. This tells us the company became less profitable on a per-share basis as it expanded.
In Q1, Global Industrial reported EPS at $0.35, in line with the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Global Industrial’s full-year EPS of $1.58 to grow 2.5%.
Key Takeaways from Global Industrial’s Q1 Results
We were impressed by how significantly Global Industrial blew past analysts’ revenue, EPS, and EBITDA expectations this quarter. Zooming out, we think this was a good quarter with some key areas of upside. The stock traded up 8.4% to $24.01 immediately after reporting.
Global Industrial put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter.
We cover that in our actionable full research report which you can read here, it’s free
.
