Q2 Supplier Sales Rise 5.1%
Marks 18th Consecutive Quarterly Jump In Revenues
Industry suppliers increased their revenues by an average of 5.1% in the second quarter, according to a report released today by ASI. The rise in Q2 sales marks the 18th consecutive quarterly jump in supplier revenues. “The economy was stable enough to drive a bit of consumer confidence and the technology category really took off,” said Bill Korowitz, CEO of Top 40 supplier The Magnet Group (asi/68507). “Suppliers also seemed to have built more inventory in advance of Q2 sales this year than in previous years.”
Data shows more than half of suppliers (59%) improved their first-quarter sales, with 23% reporting their revenues were unchanged and just 18% sustaining a decline. “We are seeing a resurgence in larger, corporate orders,” said Norm Hullinger, CEO of Top 40 supplier alphabroder (asi/34063). “Our customers tell us that their corporate clients are seeing growth in their businesses and ramping up spending accordingly.”
Six in 10 suppliers expect their 2014 full-year sales to be greater than their 2013 total revenues. More than three-quarters (78%) of supplier firms with $5 million or more in annual sales believe their revenues will improve in 2014. About 58% of smaller suppliers (less than $5 million in annual sales) anticipate their sales will increase this year.
“We are bullish for sales growth, but very focused on offering more and more services like our expanded digital proofing programs, as well as same-day rush production,” said Jeff Lederer, president of Top 40 supplier Prime Line (asi/79530). “Certainly the health of the industry helps to fuel Prime’s overall growth, too, especially technology items.”
Dan Taylor, president of BamBams (asi/38228), also expects sales gains this year, with the caveat that negative world events always can make an impact. “We expect to be up 4%-5% this year and unless the world melts down because of the turmoils caused by ISIS, we would expect the industry to continue solid gains,” he said.
The 5.1% quarterly growth among suppliers was a stronger showing than in Q1, when average sales increased by 4.8%. Last month, Counselor reported Q2 distributor sales rose by 6.1%.