GXO Logistics came out with first-quarter revenue and earnings in line with Wall Street estimates, delivering a solid start to the year amid a “sluggish environment,” CEO Malcolm Wilson said.
“Companies are starting to restock; we can see that from the dialogue we have with our customers,” Wilson said during a call with analysts Wednesday before the market opened. “I think we’ve seen the bottom of the destocking environment. What we’re clearly evidencing is that customers, in order to meet their plans, they’re going to need to start restocking through the course of the year. That’s a good sign for us. But I do want to level set; overall it’s a sluggish environment in 2024.”
GXO (NYSE: GXO) reported a 6% year-over-year increase in revenue to $2.46 billion during the first quarter. Adjusted quarterly earnings per share (EPS) was 45 cents, compared with 49 cents for the first quarter in 2023.
Wall Street expectations had called for first-quarter earnings of 45 cents per share and revenue of $2.37 billion.
Related: Trimble records Q1 transportation revenue of $195M
Greenwich, Connecticut-based GXO is one of the largest pure-play contract logistics providers in the world. GXO has more than 970 facilities totaling approximately 200 million square feet, with a global workforce of more than 130,000 people.
GXO posted a net loss of $36 million, or negative 31 cents per diluted share, in the first quarter. This compares with $26 million in net income during the same period in 2023.
That loss “was primarily driven by a one-off litigation expense, as well as one-time transaction costs for Wincanton, which are in line with the costs associated with our early acquisitions,” CFO Baris Oran said during the call.
On April 29, GXO finalized its $965 million acquisition of Wincanton, a supply chain solutions company based in Chippenham, England.
“Wincanton exemplifies our mergers and acquisition strategy,” Wilson said. “It expands GXO’s presence in strategic growth verticals in the United Kingdom, including aerospace and industrials, providing GXO with a springboard to offer the services across Europe.”
Wilson also touted a new 20-year partnership agreement with Levi Strauss & Co. that was announced on Monday.
As part of the agreement with Levi, GXO will manage the company’s logistics operations at the 753,474-square-foot Dorsten Distribution Center starting in June. GXO will manage all logistics services for Levi, including value-added services, to distribute apparel and accessories across wholesale, retail, digital, e-commerce and marketplace channels.
Levi’s Dorsten Distribution Center is located in Dorsten, Germany.
“This will be a highly automated, newly outsourced operation with a lifetime value of nearly $1 billion,” Wilson said. “This is just one example of the trend we’re seeing where customers are looking for longer-term partnerships to address their fulfillment needs.”
Wilson said GXO signed about $250 million worth of new business during the first quarter, a 55% improvement from the same year-ago period.
“GXO’s sales pipeline continues to grow and ended the first quarter at $2.2 billion, a 12-month high,” Wilson said.
For full-year 2024, GXO’s guidance expects organic revenue growth of 2% to 5%; adjusted EPS of $2.70 to $2.90; and adjusted earnings before interest, taxes, depreciation and amortization of $760 million to $790 million.
| GXO Logistics | Q1/24 | Q1/23 | Y/Y % Change |
| Revenue | $2.46B | $2.32B | 6% |
| Net income | ($36M) | $26M | NM |
| Adjusted earnings per share | $0.45 | $0.49 | (8%) |