As WESCO closes the books on a bruising 2015 that saw the company close 13 locations and lay off more than 400 employees as sales declined in the 4% to 5% range and its stock price fell from $76.10 to start the year to below $40 at press-time, WESCO International’s executive team told analysts this week that it expects to outperform its core end-user markets in 2016 and grow market share, even though many of its markets are expected to continue their struggles for growth in the new year.
The company’s expectations of improvement in 2016 key on a 1% increase in market share amid a mixed bag of prospects in specific end markets. Ken Park, WESCO senior vice president and CFO, said the company is expecting the industrial market, which accounts for about 40% of the company’s revenues, to be down by mid to high single-digits and non-residential construction to be roughly flat with continued weakness in industrial construction, which is about a third of WESCO’s business. Commercial construction and residential construction, meanwhile, should continue to grow in 2016 and remain well below their pre-recession peaks.
After bagging two large full-line distributors in 2015, WESCO will continue seeking opportunities to add by acquisition. The acquisitions of Hill Country Electrical Supply in Austin, Texas, and Needham Electric Supply, Canton, Mass., boosted the company’s results for 2015 by two percentage points and strengthened its position in non-residential construction and lighting national accounts.
“Though not built into our current outlook, additional acquisitions remain an important element of our growth strategy going forward,” Park said.