Home Depot is moving deeper into specialty distribution, using SRS Distribution, GMS, and its expanding Pro sales operation to pursue more business from contractors, homebuilders, and commercial customers.

The company said during its Aug. 18 second-quarter earnings call that about 90% of its stores completed at least one SRS sale through Home Depot’s QuoteCenter platform during the past 12 months. The disclosure provides one of the clearest indications, yet that Home Depot is beginning to connect its traditional store network with the specialty distributors it has acquired.

The strategy is taking shape as Home Depot continues to grow. Second-quarter sales increased 5.7% to $47.861 billion from $45.277 billion a year earlier. Net earnings rose 4.7% to $4.766 billion from $4.551 billion.

For the first six months of fiscal 2026, sales increased 5.3% to $89.626 billion from $85.133 billion a year earlier. Net earnings increased 0.9% to $8.055 billion from $7.984 billion.

Comparable sales increased 1.7% in the second quarter, including a 1.3% increase in the U.S.

Behind those numbers, Home Depot is building a business that increasingly reaches beyond its traditional big-box stores. The company is combining SRS, GMS, outside sales, digital tools, and faster delivery to pursue larger professional customers and capture more of their spending.

SRS Moves Into Home Depot’s Sales Network

QuoteCenter is emerging as an important link between Home Depot stores and SRS.

The platform allows Home Depot’s Pro sales teams to source larger orders and products beyond what is stocked in an individual store. With SRS and GMS now part of Home Depot, the company can increasingly fulfill that demand through its own specialty distribution operations.

“Now that we own SRS and GMS, our Pro and sales team have access to this SRS full catalog,” senior executive vice president Ann-Marie Campbell told analysts.

Sales fulfilled by SRS through QuoteCenter are growing rapidly, she said.

“Within the past 12 months, 90% of our stores have closed a sale through SRS,” Campbell said.

For distributors, the significance is that Home Depot no longer needs to stock a product in a store to compete for the sale.

A contractor working with a Home Depot Pro salesperson can access products through SRS and the company’s broader distribution network. That expands the assortment Home Depot can offer while giving its existing sales organization another way to direct contractor spending into businesses the company owns.

SRS Gains Business With Larger Customers

SRS also gained ground during the quarter.

The distributor’s comparable sales grew faster than Home Depot’s overall comparable sales, with positive comparable sales across all of SRS’ business verticals.

Home Depot chief financial officer Richard McPhail said the company believes SRS is gaining market share and continues to expect the business to generate mid-single-digit organic sales growth in fiscal 2026.

SRS also is expanding with larger customers.

“We’re capturing significant incremental sales to homebuilders, commercial customers and remodelers across the verticals,” McPhail said.

That expansion is central to Home Depot’s business development strategy.

Home Depot acquired SRS in 2024, gaining a specialty distribution platform with operations in roofing, landscaping, pools, and other building products. The subsequent acquisition of GMS expanded that network into wallboard, ceilings, steel framing, and related construction products.

SRS also completed its acquisition of HVAC distributor Mingledorff’s in May, adding another specialty trade to Home Depot’s growing distribution network.

Home Depot plans to open 40 to 50 additional SRS locations during fiscal 2026.

The expansion gives Home Depot multiple routes to the same professional customer: stores, outside sales representatives, QuoteCenter, SRS branches, GMS locations, specialty distribution businesses, and digital channels.

Pro Sales Outperform DIY

Professional customers continued to outperform do-it-yourself customers during the quarter.

Home Depot said comparable sales to Pros were positive, with growth across its Pro customer groups.

Several categories with significant professional demand also posted gains, including portable power tools, decking, dimensional lumber, pipe and fittings, fasteners, hand tools, and concrete.

The Pro gains came despite continued weakness in large discretionary home improvement projects. High borrowing costs and limited housing turnover continue to weigh on larger remodeling projects, while customers remain more active on smaller repair and maintenance work.

That makes professional contractors increasingly important to Home Depot’s growth strategy while the company waits for a broader recovery in housing and remodeling.

“There is more to do, but it is evident that we are serving our Pros better than ever,” Campbell said.

Faster Delivery Targets the Job Site

Home Depot also is expanding delivery capabilities aimed directly at professional contractors.

The company has expanded Express Delivery nationwide, offering delivery of tens of thousands of products in three hours or less for a flat fee.

Jordan Broggi, executive vice president of customer experience and president of online, said most Express Delivery orders are already arriving in less than an hour.

Professional contractors are a specific target for the service. Home Depot cited the example of a plumber discovering that a product is missing while already working at a job site and ordering it for delivery rather than leaving the project to make a store run.

That puts Home Depot into more direct competition with one of the traditional strengths of local and regional distributors: getting products to contractors quickly enough to keep crews working.

Home Depot said more than 65% of deliveries of stocked parcel products now reach customers the same day or next day.

For stocked big and bulky products, about 55% are delivered within two days. The company said it has reduced lead times for those products by about 45% during the past 18 months.

Home Depot Adds More Pro Products

Home Depot also is expanding supplier relationships in categories important to professional contractors.

The company said it is expanding its relationship with USG and will be the exclusive big-box retail launch partner for the manufacturer’s new UltraLight Tough gypsum panels.

Home Depot also is expanding its Ruco joint treatment assortment across its stores.

The move takes on greater significance following the addition of GMS, a major specialty distributor of wallboard, ceilings, steel framing, and related products.

Home Depot can increasingly pursue those categories through its stores, Pro sales organization, and specialty distribution network instead of relying primarily on products stocked in retail locations.

That gives the company more ways to compete for larger residential and commercial projects that traditionally have been served by specialty building products distributors.

Digital Sales Rise 11%

Home Depot’s digital business also continued to grow.

Sales through its digital platforms increased 11% from a year earlier, marking the fifth consecutive quarter of double-digit growth. The company said both traffic and conversion increased, while its mobile app remained its fastest-growing digital channel.

Home Depot also is expanding Magic Apron, its artificial intelligence-powered shopping assistant, into stores. The technology can recognize the store a customer is visiting and use local inventory when responding to product and project questions.

The company said Magic Apron is managing millions of customer questions each month.

For professional customers, Home Depot also is developing AI-enabled tools such as Material List Builder, which can turn project information from spreadsheets, emails, texts, and other sources into lists of products that can be priced and ordered.

For distributors, those tools are significant because they are being connected to a much larger Pro sales and fulfillment operation.

A contractor can increasingly build a materials list digitally, work with a salesperson, access products beyond an individual store’s inventory and have the order fulfilled through Home Depot’s stores or specialty distribution businesses and delivered to a job site.

Home Depot Moves From Acquisition to Integration

Home Depot’s second-quarter results show its Pro strategy entering a new phase.

Buying SRS gave the company a large specialty distribution platform. Adding GMS and other businesses expanded that platform into additional product categories, geographies, and customer segments.

Home Depot is now working to connect those businesses with the customer relationships, stores, salespeople, technology, and delivery capabilities it already has.

The 90% store participation rate for SRS sales through QuoteCenter is an early indication that the integration is moving into day-to-day selling.

For traditional distributors, that creates a more direct competitive challenge than Home Depot’s conventional retail model.

Home Depot is not simply trying to persuade contractors to make more purchases inside its stores. It is combining a national store network with specialty distribution branches, outside sales, broader product assortments, digital tools, and job-site delivery.

That allows Home Depot to compete for purchases that previously might have gone directly to an independent or specialty distributor.

The company also continues to expand its physical distribution footprint, with 40 to 50 additional SRS locations planned this year.

Home Depot’s financial scale gives it substantial resources to support that strategy. The company generated $47.861 billion in second-quarter sales, up 5.7%, and $4.766 billion in net earnings, up 4.7%. Through the first six months of the year, sales reached $89.626 billion, up 5.3%, while net earnings totaled $8.055 billion, up 0.9%.

For distributors, however, the more consequential numbers may be the operational ones: 90% of Home Depot stores have already completed an SRS sale through QuoteCenter, SRS is expanding with homebuilders and commercial customers, digital sales are growing at a double-digit rate and another 40 to 50 SRS locations are planned this year.

Together, those moves show Home Depot shifting from acquiring distribution businesses to integrating them into a broader Pro growth strategy — one designed to compete with traditional distributors on product breadth, sales relationships, digital capabilities, availability, and delivery to the job site.

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Applied Industrial Technologies is setting a higher growth target as the industrial distributor looks to acquisitions, automation, cross-selling, and expansion of its engineered solutions businesses to drive its next phase of growth.

Applied increased its intermediate sales target to $7 billion from $5.5 billion, putting the company on a path to grow beyond the $4.97 billion in sales it generated in fiscal 2026. The company said it believes the target can be reached within five years, depending in part on acquisition activity and broader economic conditions.

The strategy marks a continued shift by Applied beyond its traditional service center distribution business and toward higher-growth technical capabilities in automation, fluid power, and flow control.

“We enter fiscal 2027 with the strongest market position in Applied’s history,” President and CEO Neil Schrimsher told analysts on the company’s fiscal fourth-quarter earnings call. He said acquisitions could make a larger contribution to growth as the company moves deeper into those technical markets.

The company enters that push with stronger sales and earnings.

Sales increased 10.4% to $1.353 billion in the fiscal fourth quarter from $1.225 billion a year earlier, while net income rose 10% to $118.6 million from $107.8 million. The quarter ended June 30.

For the full fiscal year, sales increased 8.8% to $4.967 billion from $4.563 billion. Net income increased 5.5% to $414.5 million from $393 million.

Underlying fourth-quarter sales growth was driven by higher volume as customers increased spending on maintenance, repair and operations products and capital projects. Applied said sales increased across 20 of its 30 largest end markets, up from 17 in the previous quarter.

Acquisitions are expected to play a larger role in reaching the $7 billion target.

Applied has completed more than 18 acquisitions since 2018, and Schrimsher said the company sees an increasingly productive environment for additional deals.

“Our pipeline remains active, and we believe M&A contribution could be more meaningful to our sales growth through fiscal 2027 and beyond as we further execute our strategy,” Schrimsher said. “The M&A backdrop is increasingly productive as targets face heightened competition, required operational investments and extended ownership life cycles.”

Applied expects to have $2 billion in balance sheet capacity available for capital deployment and has made M&A a top priority. The company is evaluating targets across both of its business segments.

Importantly, Applied’s fiscal 2027 forecast does not include sales from acquisitions that have not yet been completed, leaving M&A as a potential source of additional growth beyond the company’s existing business.

Asked about the acquisition pipeline, Schrimsher said Applied is considering deals of varying sizes.

“We continue to be active,” he said. “There can be some smaller bolt-ons and then there are perhaps a few larger properties that I think we will either evaluate or look at coming to market over a period.”

Applied is looking for companies that can add capabilities in fluid power, flow control and automation while also expanding its Service Center presence.

“We know what priorities matter. We know good prospects, good targets,” Schrimsher said. “And so those dialogues and exchanges continue.”

Hydradyne, the fluid power distributor Applied acquired about 18 months ago, provides a model for that strategy. Schrimsher said Hydradyne’s sales increased at a double-digit rate in the second half of fiscal 2026 from a year earlier, while its margins improved by more than 2 percentage points as Applied worked through acquisition integration and cost savings.

Automation is emerging as one of Applied’s most important business-development opportunities.

Automation sales increased more than 20% in the fourth quarter from a year earlier, the strongest growth in more than four years, as customers increased spending on robotics, machine vision, and digital technologies.

Applied is targeting applications ranging from semiconductor manufacturing and data centers to food and beverage production, consumer packaging, and autonomous mobile robots.

“We’re doing more with productized solutions that can help in robotics and autonomous mobile robots through facilities as well as vision systems in and around consumer packaging and goods,” Schrimsher said.

Applied also sees artificial intelligence helping drive demand for physical automation systems inside customer facilities.

“We’re helping customers as they think about AI, putting things in place in their facilities that help that with robotics and vision and get returns for them,” he said.

Schrimsher said Applied expects robotics and collaborative robots to remain a multi-year growth market and will continue evaluating capabilities that could expand its automation offering.

Technology markets are becoming a larger part of that strategy. Technology now represents more than 15% of Engineered Solutions sales, with Applied participating through automation, fluid power, and flow control. The company cited continued business development in semiconductor manufacturing and data centers.

Applied also plans to generate more growth by selling multiple technical capabilities to customers that historically may have bought from only one part of the company.

Schrimsher said Applied’s knowledge of customer facilities gives the distributor an opening to move from traditional maintenance products into larger technical projects.

“We’re seeing increased number of customers looking to us as we know their operating facilities so well that we can help them with advancements in fluid power systems, robotics and vision,” he said.

Applied also is finding opportunities to sell repair services, pumps, and valves from its flow control businesses into existing accounts, Schrimsher said.

That cross-selling strategy is particularly important because it allows Applied to use relationships built through its large Service Center network to introduce customers to higher-value automation and engineered solutions.

National strategic accounts were among the strongest parts of Applied’s Service Center business in the fourth quarter. Sales to small and midsized local customers increased at a high-single-digit rate from a year earlier, another potential base for expanding sales across multiple Applied businesses.

The shift is already showing up in Applied’s sales mix.

Engineered Solutions sales increased 12.9% organically in the fourth quarter from a year earlier, led by double-digit growth in automation and fluid power. Organic sales in the Service Center segment increased 7.9%.

Momentum continued after the quarter ended.

Schrimsher said July orders in Engineered Solutions were up in the mid-20% range, with strong activity in automation, fluid power, and process flow control. Backlog increased from a year earlier and improved sequentially during a period when it would normally be flat.

Applied expects fiscal 2027 sales to increase 4% to 6.5%, although management is taking a more cautious view of growth later in the fiscal year because of tougher comparisons and uncertainty surrounding trade policy and geopolitical conditions.

But the longer-term strategy goes well beyond waiting for an industrial recovery.

Applied is positioning itself around plant modernization, robotics, artificial intelligence, infrastructure investment, and rising demand for technical support, while using acquisitions to add capabilities and cross-selling to push those capabilities deeper into its existing customer base.

“Our ongoing evolution has positioned Applied at the intersection of exciting and powerful growth trends tied to rising technical support at customer plants, industrial system upgrades, automation adoption, including physical AI integration and the build-out of critical infrastructure across both legacy and emerging customer verticals,” Schrimsher said.

The $7 billion target puts a number on that strategy. Applied is betting that its next phase of growth will come not simply from selling more traditional industrial supplies, but from becoming a larger provider of the automation, engineering, and technical capabilities its customers need to modernize their operations.

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BlueLinx Holdings reported higher second-quarter sales and profits as investments in specialty products, supplier partnerships and digital transformation helped the building products distributor outperform a sluggish housing market.

The Atlanta-based company posted second-quarter sales of $814.1 million, up 4.4% from $780.1 million a year earlier. Net income increased 48.6% to $6.4 million from $4.3 million, while gross profit rose 16.7% to $139.7 million from $119.7 million. Gross margin improved to 17.2% from 15.3%, although results included a $7.2 million import duty-related benefit. Excluding that item, gross margin was 16.3%, up from 15.3% a year earlier.

For the first six months of 2026, sales increased 3.8% to $1.55 billion from $1.49 billion in the same period last year. Gross profit rose 11.0% to $256.1 million from $230.8 million, while gross margin improved to 16.6% from 15.5%. Net income declined to $4.9 million from $7.1 million, primarily because of higher interest expense.

“Our second quarter results once again demonstrate our ability to deliver profitable sales growth in a challenging market environment, validating the strength of our channel and product strategies,” President and CEO Shyam Reddy told analysts. “We believe our results reflect market share gains since we’re operating in another year of single-family and multifamily housing start declines and tepid repair-and-remodel activity.”

BlueLinx’s strategy centers on expanding its higher-margin specialty products business while reducing its dependence on more volatile commodity building materials.

Specialty product sales increased 3.8% to $564.1 million during the quarter, supported by the acquisition of Disdero Lumber, higher pricing and stronger demand for engineered wood and industrial products. Gross margin for the segment improved to 20.0% from 18.5%.

Structural product sales rose 5.6% to $249.9 million, driven by stronger lumber pricing and higher shipment volumes. Gross margin improved to 10.9% from 8.2%.

Reddy said specialty products now account for approximately 70% of BlueLinx’s sales and 80% of its gross profit, underscoring the company’s long-term shift toward higher-value product categories.

“Our channel strategy continues to fuel our branded specialty product expansion, both geographically and SKU-wise with strategic suppliers,” he said.

BlueLinx said strategic partnerships with manufacturers are becoming a key competitive advantage.

The company expanded relationships during the quarter with suppliers including Huber, Louisiana-Pacific, Georgia-Pacific, Westlake Royal Building Products and RDI. It also announced a new distribution agreement with Trex that gives BlueLinx rights to distribute the decking manufacturer’s products across 11 markets in the central, northern, and southern United States.

“The virtuous cycle is leading to stickier relationships with both customers and suppliers,” Reddy said. “Suppliers want partners who can help them grow across multiple channels and markets. That’s what we’re doing.”

Reddy said the Trex agreement reflects BlueLinx’s growing ability to help manufacturers expand into new markets.

“We are a brand-new distribution partner for Trex,” he said. “I believe in our team’s ability to execute to the point where we’re able to convince not only our long-term partners, but our new partners, that we are the best commercialization partner out there.”

He said Trex is expected to become a more meaningful contributor beginning in 2027 as BlueLinx ramps up inventory and expands customer adoption.

Executives said BlueLinx continues to outperform the broader building products market by focusing on multifamily housing, national accounts, and builder pull-through programs.

Multifamily volumes increased 11% during the quarter, while national account volumes rose 2% despite continued weakness in residential construction. The company also expanded distribution of key product lines into additional markets.

“Whether the market is great or terrible, I’m confident that our teams can continue getting more and more of the pie because of the strategic approach we’re taking,” Reddy said. “We are focused on winning at the local market and regional levels and continuing to gain share.”

BlueLinx also credited investments in artificial intelligence and digital technologies with improving pricing, inventory management, transportation, and e-commerce.

“We are making meaningful progress on our AI and digital transformation initiatives,” Reddy said. “Several are designed to enhance commercial activities, fine-tune our inventory management capabilities and generate e-commerce sales.”

Chief Financial Officer Kelly Wall said new pricing tools and transportation management systems are helping offset higher operating costs while improving execution.

“Our pricing initiatives, through the use of data and better tools, are helping our regions and branches price more effectively and more quickly,” Wall said. “Our transportation management system is helping us manage freight costs in a significantly higher fuel and third-party freight cost environment.”

BlueLinx also improved cash generation by tightening inventory management and controlling working capital.

Operating cash flow improved to $11.2 million, compared with a use of $26.8 million in the second quarter of 2025. Free cash flow improved by $45 million to $8.8 million, while the company ended the quarter with $318 million in cash and $655 million in available liquidity.

“Our ability to quickly align inventory levels with changing market conditions reflects the strength of our operating discipline and commercial capabilities,” Reddy said. “As market conditions improve, we expect these capabilities to support even stronger cash flow generation.”

BlueLinx expects average daily sales volumes in the third quarter to exceed both the prior-year period and the second quarter, supported by continued market-share gains, expanding supplier relationships and growth in specialty products. The company forecast specialty product gross margins of 18% to 19% and structural product gross margins of 8.5% to 9.5%.

“Overall, our second quarter results reflect continued momentum and solid financial performance despite low consumer confidence, persistent inflation, economic uncertainty and geopolitical volatility,” Reddy said. “We remain focused on executing through the cycle and positioning BlueLinx for accelerated growth when the industry recovers.”

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Graybar posted the strongest quarterly performance in its history, reporting record second-quarter sales and profit as the employee-owned distributor continued to expand through acquisitions and invest in its leadership team.

The St. Louis-based distributor said second-quarter net sales increased 11.8% to $3.8 billion from $3.4 billion a year earlier. Net income rose 14.8% to $158.6 million from $138.2 million, marking the highest quarterly sales and earnings in the company’s history.

For the first six months of 2026, net sales increased 12.1% to $7.1 billion from $6.3 billion in the same period last year, while net income climbed 25.7% to $300.5 million from $239.1 million.

“These results also demonstrate the strength of our long-term strategy and the disciplined execution of key priorities across our business,” CEO Kathleen Mazzarella said.

The results underscore continued strength in electrical, industrial, automation, and communications markets, where investment in power infrastructure, manufacturing modernization, data centers, and electrification projects has supported distributor demand.

Graybar continued to build its market position during the quarter through acquisitions. The company acquired American Electric Supply, expanding its presence in Southern California. The transaction was Graybar’s second acquisition of 2026 and reflects the company’s strategy of strengthening regional coverage through targeted deals.

The distributor also completed several executive leadership changes that took effect July 1, appointing David Bender as senior vice president of North American subsidiaries, Brian Delaney as senior vice president and general manager, and Richard Harvey as regional vice president. Additional district leadership appointments included Regis Ganley as district vice president for the Southwest District and Scott Kennedy as district vice president for New York.

One of North America’s largest employee-owned companies, Graybar operates 355 distribution facilities across the United States and Canada, supplying electrical, industrial, automation and communications products while providing supply chain management and logistics services.

Graybar’s results add to a growing list of distributors reporting solid second-quarter performance despite continued economic uncertainty. Along with recent results from peers serving electrical, industrial and construction markets, the quarter suggests distributors continue to benefit from sustained investment in infrastructure, grid modernization, manufacturing, and data center development.

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AlarMax is expanding its logistics and customer support capabilities with the opening of a national fulfillment center and an innovation lab, investments aimed at strengthening inventory availability, technical training and supplier collaboration as demand grows for integrated security and low-voltage systems.

The wholesale distributor announced Monday that it has opened a 40,000-square-foot National Fulfillment Center in Cranberry Township, Pennsylvania, and the AlarMax Product Experience (APEX) Innovation Lab at its Pittsburgh headquarters.

The fulfillment center expands the company’s inventory capacity and serves as a centralized distribution hub for its nationwide branch network. AlarMax said the facility is designed to improve order fulfillment, increase product availability and strengthen supply chain efficiency as the company expands.

The APEX Innovation Lab provides a hands-on environment where customers, suppliers and employees can evaluate integrated security technologies, participate in technical training and certification programs, and test products in real-world applications. The facility features solutions from 15 supplier partners and includes dedicated classroom space for customer education and product demonstrations.

“Today’s customers expect more than product availability : they expect expertise, education and trusted partners who can help them design complete solutions,” CEO Scott Shelander said.

The investments reflect a broader shift in specialty distribution as security, access control, networking and audiovisual systems become more integrated and technically complex. Distributors increasingly are differentiating themselves by offering engineering support, technical training and solution design alongside traditional inventory management and fulfillment services.

“Distribution continues to evolve beyond simply moving products,” Chairman Bill Teitelbaum said in a statement. “Customers rely on trusted partners for inventory availability, technical expertise, education and operational support.”

The expansion follows a series of investments by AlarMax in technology, supply chain operations and executive leadership as the company pursues a long-term growth strategy. Earlier this year, the distributor appointed Steve Teitelbaum as chief technology officer to lead artificial intelligence initiatives and promoted Matt Ehrman to senior vice president of supply chain.

AlarMax plans to officially open both facilities during an Aug. 25 customer event featuring supplier exhibits, product demonstrations and facility tours.

The announcement underscores a growing trend among specialty distributors to invest in infrastructure that extends beyond warehousing. As products become more sophisticated and customers seek greater technical support, distributors are increasingly using training centers, demonstration labs and centralized fulfillment operations to differentiate themselves and strengthen long-term customer relationships.

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Artificial intelligence is becoming much more than a data center growth story for Wesco International.

The Pittsburgh-based distributor says the rapid expansion of AI infrastructure is creating opportunities well beyond supplying electrical products, allowing the company to expand into power systems, engineering, cooling, installation, and lifecycle services that support customers from project design through ongoing operations. That broader strategy helped drive record second-quarter sales and backlog and prompted Wesco to raise its full-year 2026 outlook.

“We’re not a one-trick pony,” Chairman, President and Chief Executive Officer John Engel told analysts during the company’s earnings call. While data centers remain the company’s fastest-growing market, he said Wesco continues to benefit from infrastructure investment, utility modernization, manufacturing reshoring, and industrial expansion. Excluding data center projects, the company still generated mid-single-digit sales growth during the second quarter.

Wesco reported second-quarter sales of $6.67 billion, up 13.0% from $5.90 billion a year earlier. Net income increased 10.5% to $209.0 million from $189.2 million.

For the first six months of 2026, sales increased 13.4% to $12.75 billion from $11.24 billion in the same period last year. Net income rose 23.7% to $362.8 million from $293.2 million.

Data center sales reached $1.5 billion during the quarter, an increase of about 45% from a year earlier. But management repeatedly emphasized that the company’s strategy is evolving from supplying products into data centers to supporting the entire AI infrastructure ecosystem.

Engel described the opportunity as a “One Wesco” strategy spanning all three of the company’s operating businesses. Instead of focusing solely on electrical distribution, Wesco now provides communications infrastructure, power systems, engineered cooling, installation, maintenance, and technical services throughout the life cycle of AI facilities.

That strategy expanded further with the July acquisition of Singapore-based Newark Engineering. The company designs and supports mission-critical cooling systems for data centers, adding thermal management expertise that Engel said allows Wesco to engage customers earlier in project planning while expanding opportunities to provide services after facilities become operational.

Another milestone came during the quarter when Wesco secured a multiyear grid services contract with a hyperscale data center operator.

Engel described the award as a significant step in expanding the company’s role in end-to-end power infrastructure. Wesco developed its grid services business internally over the past five to six years, initially serving electric utilities before expanding into data centers, renewable energy projects, and other large industrial customers with complex power requirements.

Chief Financial Officer Indraneel Dev said customers increasingly are bringing Wesco into projects earlier to help address power infrastructure challenges created by AI computing. That earlier involvement enables the company to provide a broader range of products and technical services while increasing opportunities to cross-sell across its communications, electrical and utility businesses.

The company’s growth remained broad-based during the quarter.

Communications and Security Solutions reported 18% sales growth, driven primarily by continued investment in data centers. Electrical and Electronic Solutions increased 11%, supported by construction projects, industrial demand and original equipment manufacturers serving semiconductor, electrification, and AI markets. Utility and Broadband Solutions grew 7% as utility investment strengthened and broadband project activity accelerated.

Wesco also reported record backlog for the third consecutive quarter, with companywide backlog increasing by about 60% from a year earlier. Communications and Security Solutions backlog increased approximately 95%, Electrical and Electronic Solutions backlog rose about 30%, and Utility and Broadband Solutions backlog climbed about 80%, reflecting multiyear customer commitments across all three businesses.

Engel said those commitments reinforce management’s view that AI infrastructure is only one of several long-term demand drivers. He pointed to electric grid expansion, power modernization, manufacturing reshoring and what he described as the initial stages of an industrial “supercycle” as additional sources of future growth.

Reflecting that confidence, Wesco raised its full-year outlook. The company now expects organic sales growth of 9% to 11%, up from its previous forecast of 5% to 8%, citing accelerating customer demand, record backlog, and continued momentum across all three operating businesses.

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Watsco Inc. is betting that technology, acquisitions and digital customer engagement will drive its next phase of growth as the heating, ventilation and air conditioning market returns to more stable operating conditions.

During its second-quarter earnings call, the nation’s largest HVAC distributor outlined a long-term strategy centered on expanding digital platforms, using artificial intelligence to improve operations and customer service, and acquiring distributors that can accelerate regional growth.

“Our technology investments have made us a stronger company with higher growth prospects and a widening competitive moat,” President AJ Nahmad told analysts.

Nahmad said the company’s strategy focuses on four priorities: building the industry’s largest repository of customer, product and pricing data; improving the customer experience through digital tools; making supply chain and branch operations more efficient; and developing technology that helps contractors grow their own businesses.

One of Watsco’s newest initiatives is SupplySync.com, a platform launched during the second quarter to serve large institutional customers. The company said the platform opens a new sales channel while leveraging its existing distribution network and infrastructure.

“We see an incremental growth opportunity beyond our day-to-day business while leveraging our existing scale and infrastructure,” Nahmad said.

The company is also expanding its Vendor Consolidation and Rationalization program, which broadens product availability while simplifying supplier relationships, and continues to develop Hydros, a shared logistics network that replenishes inventory across business units. Executives said the initiatives will strengthen product availability while creating new opportunities to grow sales of non-equipment products.

Digital sales continue to outpace the broader business.

E-commerce revenue increased 13% during the first half of 2026 and now represents 37% of total sales over the past 12 months. In some markets, digital channels account for 60% to 70% of sales. More than 70,000 customers actively use Watsco’s mobile applications each month.

The company’s OnCall Air platform, which helps contractors prepare sales proposals for homeowners, generated more than 340,000 proposals over the past year, representing $1.9 billion in gross merchandise value, a 15% increase from the previous year. Nahmad said contractors using Watsco’s digital platforms are growing faster, remain customers longer and cost less to serve than those using traditional channels.

Artificial intelligence is becoming a larger part of the company’s strategy.

Nahmad said AI is being deployed across the business, while new pricing optimization tools are helping Watsco manage pricing across thousands of products and multiple markets. Executives also said digital ordering platforms encourage customers to purchase complementary products, increasing average order size while improving customer service.

Acquisitions remain another key element of Watsco’s growth strategy.

The company completed its acquisition of Jackson Supply on June 1, adding a distributor with about $230 million in annual revenue and 25 locations across the Sun Belt. Executives said Jackson will continue operating under its existing leadership while gaining access to Watsco’s technology, capital and supplier relationships.

“They have a very aggressive plan to do more of what they’ve been doing with our capital, our relationships, our technology,” Executive Vice President Barry Logan said.

Executives said they believe the HVAC market has stabilized after several years of supply chain disruption and the industry’s transition to A2L refrigerants. With those challenges easing, Watsco said it expects technology investments, digital platforms and acquisitions to become increasingly important drivers of future growth.

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BlueLinx Corp. chief information officer Praveen Gautam will headline Distribution Strategy Group’s Atlanta AI Forum on Aug. 12, offering an inside look at how one of the nation’s largest building products distributors is reshaping its technology strategy around artificial intelligence.

In a keynote fireside chat titled “The CIO’s AI Playbook: What BlueLinx Learned Building an AI-Ready Distribution Operation,” Gautam will discuss the infrastructure, data strategy and technology investments underpinning the company’s AI transformation. He will share lessons learned since leading BlueLinx’s digital transformation, including what has worked, where the company encountered challenges and the areas where it continues to invest.

The session will focus on the practical steps required to prepare a distribution business for enterprise AI deployment, moving beyond pilot projects to operational implementation.

The program opens with a keynote by Jonathan Bein, co-founder of Distribution Strategy Group, who will provide an overview of AI adoption across the distribution industry and the technologies driving the next phase of digital transformation.

Later in the day, Distribution Strategy Group Chief Operating Officer Brian Hopkins will present “LLMs & Agentic AI,” examining how distributors can apply large language models and autonomous AI agents to customer service, sales, and operational workflows.

The agenda also includes a panel discussion featuring distribution executives deploying AI within their organizations, along with solution sessions from Proton.ai, GAINSolutions and Navu focused on commercially available AI technologies for wholesale distributors.

The conference concludes with a networking reception following a day of presentations and discussions designed to help distribution executives accelerate AI adoption across their organizations.

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Sysco Corp. outlined how its pending acquisition of Jetro Restaurant Depot will expand its reach among independent restaurant operators, detailing plans to grow the cash and carry chain, cross-selling customers and strengthen its position across multiple purchasing channels.

CEO Kevin Hourican and interim CFO Brandon Sewell discussed the strategy during the Deutsche Bank Access Global Consumer Conference in Paris on June 2, according to a transcript filed with the U.S. Securities and Exchange Commission.

Sysco announced the acquisition March 30. The transaction remains under review after federal antitrust regulators issued a second request for information, with the company expecting the deal to close in approximately nine months. Hourican said Sysco expects the acquisition to be approved because the two companies have limited customer overlap and the company does not plan to raise prices at Restaurant Depot following the transaction.

Restaurant Depot operates 167 cash and carry warehouse locations serving independent restaurants and foodservice operators. Executives said the business generated $16 billion in annual revenue, $2.1 billion in EBITDA and $2 billion in free cash flow. The company has increased sales in 28 of the past 30 years and profit every year during that period, including through the COVID 19 pandemic.

Executives attributed Restaurant Depot’s 13% EBITDA margin, more than double Sysco’s standalone 5.2% margin, to its low-cost operating model. Customers select, load, and transport their own purchases, eliminating the need for delivery fleets, in store selectors and sales commissions.

Sysco said the acquisition is expected to increase companywide revenue by 20%, adjusted EBITDA by 45% and free cash flow by 55%. The company expects to generate $250 million in annual cost synergies through procurement and payment processing savings while reiterating that the integration will not include workforce reductions.

Rather than integrating Restaurant Depot into its existing operations, Sysco plans to use the chain to complement its delivery network. The company has identified at least 125 additional U.S. markets where it believes the Restaurant Depot format can expand. Hourican said the analysis does not include Canada, where Sysco sees additional long-term opportunity.

Executives also outlined plans to cross sell between the two customer bases. Sysco intends to offer Restaurant Depot customers specialty products, including custom cut proteins, while using the chain’s locations to help delivery customers replenish inventory between scheduled deliveries. Hourican said Cheesecake Factory has already expressed interest in using Restaurant Depot locations as a backup supply source.

Separately, Sysco said its core U.S. broadline business continues to improve despite flat restaurant traffic. The company expects local case volume growth of at least 2.5% during the current quarter, a 120-basis point improvement on a two-year stacked basis from the previous quarter. Executives credited stronger sales execution, improved retention of sales associates and the rollout of AI 360, an artificial intelligence application that helps sales representatives prioritize customer visits and product recommendations.

Sysco also reported its international business posted a second consecutive quarter of 4% volume growth and a 10th straight quarter of double-digit operating income growth. The company said it plans to provide additional details on the Restaurant Depot integration and its broader technology strategy, including AI 360, when it issues fiscal 2027 guidance during its fourth quarter earnings call.

If approved, the Restaurant Depot acquisition would give Sysco a stronger presence with independent restaurants by combining traditional broadline distribution with a national cash and carry network, broadening its reach beyond the conventional delivery model.

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Cencora is sharpening its focus on specialty pharmaceuticals, artificial intelligence and physician practice management as the healthcare distributor continues to reposition itself around higher-growth services and technology-driven operations.

During its fiscal second-quarter earnings call, executives highlighted new investments in AI-powered tools, continued expansion of specialty pharmaceutical services and ongoing efforts to streamline the company’s portfolio around what CEO Robert Mauch described as a “pharmaceutical-centric strategy.”

The strategy reflects a broader shift underway in healthcare distribution as companies look beyond traditional product fulfillment to drive growth through specialty services, data, technology, and closer ties to patient care providers.

One of the company’s newest initiatives is the deployment of artificial intelligence tools within customer support operations. Cencora said the technology is helping improve service consistency, issue resolution and customer visibility across its network and will be expanded more broadly throughout the organization.

The company also reported on continued progress in specialty pharmaceuticals, an area that remains a central growth driver. Its global specialty logistics business posted a second consecutive quarter of operating income growth, supported by new contracts involving cell and gene therapies and laboratory logistics services. Executives say demand is increasing as pharmaceutical manufacturers bring more complex therapies to market that require specialized handling and distribution capabilities.

Cencora is also expanding its reach into healthcare delivery through physician practice management organizations. Following its acquisition of OneOncology in February, the company has begun integrating the oncology platform with its existing Retina Consultants of America network.

Executives said teams from both organizations are collaborating on physician recruitment, clinical research, back-office operations, and other shared services designed to improve performance across the platforms. The effort represents one of the company’s most significant strategic initiatives as it seeks to build scale in specialty care settings.

At the same time, Cencora is narrowing its business focus. During the quarter, the company agreed to merge MWI Animal Health with Covetrus and completed the sale of its U.S. hub consulting services business. Management said the moves are intended to concentrate resources on pharmaceutical distribution, specialty healthcare services, and physician practice operations.

The strategic changes come as traditional pharmaceutical distribution faces increasing pressure from drug pricing changes, biosimilar conversions and evolving customer purchasing patterns. Cencora executives said the company remains focused on growing operating income through specialty services, logistics capabilities, and technology investments rather than relying solely on distribution volume growth.

For distributors, the message is becoming increasingly clear: future growth is likely to come from specialized services, digital capabilities, and deeper customer relationships rather than product distribution alone. Cencora’s latest initiatives provide one of the clearest examples yet of how that transition is unfolding among the industry’s largest players.

Cencora reported fiscal second-quarter revenue of $78.4 billion, up 4% from the prior-year period, while adjusted diluted earnings per share increased 7.5% to $4.75. Operating income rose 6% to approximately $1.3 billion. The company’s U.S. Healthcare Solutions segment generated revenue of $68.8 billion, up 3%, while International Healthcare Solutions revenue increased 13% to $7.6 billion.

For the first six months of fiscal 2026, Cencora generated approximately $155 billion in revenue. The company raised its full-year adjusted earnings guidance to $17.65 to $17.90 per share and increased its operating income growth forecast to 12% to 14%, while lowering expected revenue growth to 4% to 6% from a previous range of 7% to 9%.

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