Ask those same executives how often two sales reps price the exact same opportunity the same way, and the answers become a lot less certain.

If you have 250 salespeople, you probably have 250 pricing strategies.

This is an exaggeration, but only slightly. In many distribution companies, pricing decisions are made one quote at a time by individual sales reps responding to customer conversations, competitive pressure, and personal experience. Over time, those individual decisions add up to hundreds of different approaches to pricing.

One sales rep discounts to preserve a relationship, and another prices aggressively to win new business. A third refuses to move on price. None of these decisions are necessarily wrong on their own, but together they create an inconsistent pricing strategy that nobody designed.

Eventually, pricing becomes something everyone owns but no one truly manages.

Very few distributors wake up one morning and decide to let every sales rep independently determine pricing. It just happens.

It usually starts with reasonable decisions. A customer resists a price increase, so a sales rep makes an exception. A long-time strategic account gets a little more pricing flexibility than everyone else. New competitive pressure leads to a deeper discount than originally planned. Before long, those decisions become standard practice, and individual judgment starts to outweigh company strategy.

Sales reps are just responding to the information they have available. I’m not blaming them. They usually don’t have the full picture, and that’s on the company.

As you grow by adding new branches, acquiring competitors, expanding territories, and hiring more reps, this challenge becomes even more severe. Every person you add and every company you integrate brings a new way of thinking about pricing.

Without a shared pricing framework, inconsistency will scale with revenue.

Sales and Pricing: Two Different Views

Sales reps understand customers better than anyone. They know which customers negotiate hard, who is most sensitive to price changes, and which accounts value responsiveness, availability, or expertise over price.

That’s valuable.

Pricing teams see a different part of the picture. They’re responsible for balancing individual customer needs with the financial objectives of the business.

What sales reps often can’t see are the business factors shaping those pricing decisions, including:

• Individual customer profitability
• Contract terms and price caps
• Supplier programs and rebates
• Historical buying behavior
• Company margin targets
• Pricing across similar accounts

At one large distributor, for example, more than 600 customer agreements were being managed manually in a spreadsheet. Each agreement could contain different price holds, expiration dates, category restrictions and other terms governing when prices could change. Add supplier programs and rebates to the equation, and determining the appropriate price becomes far more complicated than applying a standard margin target.

This information lives in different systems and departments. And changes in supplier economics don’t always show up in the same place. For example, a manufacturer might raise its list price but not change the distributor’s purchase-order cost because the adjustment is being made through a rebate program instead. Now the pricing team must look to another system to understand what changed before determining the right customer price.

It’s like the street game where someone hides a ball under moving red cups. The value is still there, but pricing teams must figure out where it went before they can determine the right customer price.

Expecting sales reps to keep up with those moving pieces isn’t realistic. That’s why pricing needs to be supported by shared data, consistent business rules, and systems that bring those variables together before quote reaches the customer.

Pricing isn’t just about today’s order. Every discount affects what a customer expects tomorrow. If a sales rep consistently gives away margin while another holds the line, customers begin receiving different answers depending on who picks up the phone.

That can lead to:

• customer confusion
• internal frustration
• difficult negotiations
• inconsistent value perception
• more approval requests and pricing exceptions

Those inconsistencies aren’t the fault of individual sales reps. They’re the result of inconsistent pricing discipline. The answer isn’t rigid pricing rules; B2B selling will always require negotiation and judgment.

That’s why pricing leaders need to position their teams as an extension of sales, not as the department that reviews discounts and enforces rules. Creating greater consistency is a cultural challenge, not a math equation. Salespeople need guidance they trust and can use in the middle of a customer conversation. The goal is to provide that guidance before those conversations begin.

Pricing guidance also must align with sales compensation. I recently spoke with a distributor that was struggling to pass through tariff-related price increases. One of my first questions was how their salespeople were compensated. The answer was revenue. That creates an obvious conflict: If a rep is rewarded for protecting revenue rather than margin, why would we expect that person to risk losing an order by holding firm on a price increase? From the rep’s perspective, absorbing the increase may protect the sale, even if it hurts the company’s profitability.

If pricing strategy says one thing while compensation rewards another, pricing will usually lose. Distributors need to consider whether their incentive structures reinforce the pricing behavior they expect from sales.

I’ve found that the most effective pricing organizations establish clear guardrails that help sales reps understand:

• recommended pricing targets
• acceptable negotiation ranges
• accounts that require special handling
• where pricing flexibility exists
• when approvals are required

My goal has never been to stop salespeople from thinking. That wouldn’t serve the business. Relationships, judgement, and experience will always matter. What I want is for every salesperson to start from the same foundation.

Private-label products are a good example of why that foundation matters. Say a distributor buys a national-brand product for $9.99 and sells it for $12.99, while a comparable private-label product costs the distributor just $4.99. A sales rep might look at that lower cost and offer the private-label product for $6.99, believing they’ve made a strong margin while saving the customer money. But the customer was already willing to pay $12.99. The rep has given away far more revenue than necessary to make the private-label option attractive.

A shared pricing strategy gives the rep a better starting point. Instead of pricing the private-label product from its cost up, the distributor can price it relative to the national brand — offering the customer meaningful savings while preserving more of the value for the business.

Customer segmentation, profitability data, pricing guidance, and business rules provide a consistent starting point, while leaving room for experience and relationships to shape the final conversation. Sales reps understand not only the recommended price, but why it’s the right place to begin.

That only happens when sales, pricing, merchandising, purchasing, finance, and leadership operate from the same information. Technology doesn’t replace those teams; it connects them, bringing the data behind pricing decisions together before a quote reaches the customer. The result is more consistent pricing, better conversations with customers, and decisions that support both relationships and long-term profitability.

The Real Test of Your Pricing Strategy

You won’t achieve pricing consistency by telling sales reps to “follow the rules.” Consistency comes from giving people the information, guidance, and confidence to make decisions that align with the company’s broader pricing strategy while still serving the customer in front of them.

The distributors that consistently protect and grow margin don’t have the most restrictive pricing policies. They equip sales, pricing, finance, and leadership to make decisions using the same information, priorities, and business objectives.

After all, your pricing strategy isn’t defined by the slide deck presented at the annual sales meeting. It’s defined by the thousands of pricing decisions made across your business every day.

If those decisions are driven by individual instinct, you don’t have one pricing strategy. You have as many pricing strategies as you have sales reps. But when every decision starts from the same foundation, your strategy finally becomes something customers experience consistently, and your business can scale profitably because of it.

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Second-quarter earnings from some of the largest U.S. distributors are providing a clearer picture of where wholesale distribution is headed through the rest of 2026: Demand is improving, but the gains are concentrated and increasingly dependent on where distributors compete.

Results from W.W. Grainger, Fastenal, Wesco International, Graybar, Applied Industrial Technologies and Pool Corp. show stronger activity across industrial maintenance, data centers, electrical infrastructure, utilities, automation, and large national accounts. Distributors with greater exposure to discretionary construction and consumer spending continue to face softer conditions.

The divide is becoming difficult to ignore.

Rather than a broad economic rebound lifting the industry evenly, the second half is shaping up as a market where end-market exposure, customer mix, and the ability to take share could matter more than overall economic growth.

Wesco’s data center run extends to a fourth straight quarter

Wesco International offers one of the clearest examples.

The Pittsburgh-based electrical, communications and utility distributor reported record second-quarter net sales of $6.7 billion, up 13% from a year earlier, with organic sales also up 13%. Data center sales reached $1.5 billion, up approximately 45%, while total company backlog increased about 60% to a record level.

“We have now posted four consecutive quarters of double-digit sales growth fueled by data centers,” said John J. Engel, Wesco’s chairman, president, and CEO.

But Wesco’s growth extends beyond data centers.

“Beyond our outsized growth in data centers, demand remained strong across the rest of our diversified portfolio and end markets as customers continue to invest in major infrastructure projects,” Engel said.

Wesco also secured a multi-year grid services award from a hyperscale data center customer during the quarter, extending its Utility and Broadband Solutions business further into power infrastructure. Backlog in that segment increased about 80% year over year, while backlog in Communications and Security Solutions, which includes much of Wesco’s data center exposure, increased approximately 95%.

The numbers show how data center investment is spreading across distribution categories. The buildout requires electrical equipment, power distribution, cooling, networking, security and other infrastructure products and services.

For electrical and industrial distributors, data centers are becoming part of a broader infrastructure spending cycle that includes utilities, grid modernization, and industrial investment.

Industrial demand gains momentum

Industrial distributors are also reporting evidence that the prolonged period of sluggish manufacturing activity is easing.

Fastenal reported second-quarter net sales of $2.39 billion, up 14.7% from $2.08 billion a year earlier. Net income increased 15.9% to $382.8 million.

The Winona, Minnesota-based distributor attributed the increase primarily to market-share gains, pricing actions, and a modest improvement in industrial production.

Heavy manufacturing, Fastenal’s largest end market at 44.1% of sales, grew 18.1% on a daily basis. Nonresidential construction daily sales increased 17% for a second consecutive quarter, with strength concentrated in electrical, utility, infrastructure, and data center-related activity.

Applied Industrial Technologies sees a similar acceleration, although its fiscal calendar runs three months ahead of the standard calendar quarter.

For its fiscal fourth quarter ended June 30, the Cleveland-based distributor reported net sales of $1.353 billion, up 10.4% from $1.225 billion a year earlier. Net income increased 13.2% to $118.6 million from $107.8 million. Organic sales increased 9.7%.

Organic sales increased 12.9% in Applied’s Engineered Solutions segment and 7.9% in Service Center Based Distribution.

“We had a strong finish to fiscal 2026 with fourth quarter sales, EBITDA and EPS achieving record quarterly levels and exceeding our expectations,” CEO Neil Schrimsher said. “Organic sales growth of 10% was the strongest in more than three years with trends strengthening across both segments.”

More important for the months ahead, the improvement has continued.

Applied entered its fiscal 2027 first quarter with organic sales running approximately 7% above the prior year. The company expects fiscal 2027 sales growth of 4% to 6.5% and continues to see opportunities tied to automation, industrial system upgrades, technical support requirements, and infrastructure investment.

Taken together, Fastenal and Applied provide some of the clearest evidence yet that industrial demand is improving after an extended period of sluggish activity.

Market-share gains are becoming a bigger growth driver

The earnings reports also reveal another important trend: Some of the largest distributors are growing considerably faster than their underlying markets.

Fastenal’s 14.7% sales increase was driven partly by deeper penetration of large customers. The number of customer sites spending at least $50,000 per month increased 16.5% to 3,125. Revenue from those sites grew more than 26% and represented 57.9% of quarterly sales.

Digital sales, combining Fastenal Managed Inventory technology and eBusiness platforms, represented 61.6% of total sales.

The takeaway is significant: Fastenal does not need industrial production to grow at a double-digit rate to produce double-digit sales growth. It can take business from competitors and capture more spending from existing customers.

Wesco is pursuing a similar strategy through its One Wesco cross-selling initiative, combining electrical, communications, utility, and supply chain capabilities across large customer relationships.

That competitive dynamic is likely to intensify through year-end.

Large national and regional distributors increasingly have the product breadth, digital capabilities, inventory programs, technical expertise, and geographic coverage to consolidate customer spending that previously flowed through multiple suppliers.

For smaller distributors competing primarily on product availability and price, that raises the stakes.

Grainger raises its 2026 outlook

Grainger’s results reinforce the stronger demand picture.

Second-quarter net sales reached $5.02 billion, up 10.3% from $4.55 billion a year earlier. Net earnings increased 18.3% to $570 million. On a daily, organic, constant-currency basis, sales increased 13.7%.

Grainger’s High-Touch Solutions North America segment increased sales 11.9%, driven by higher volume and prices, including tariff-related increases.

CEO D.G. Macpherson said the company is seeing enough momentum to raise its full-year outlook.

“Looking ahead, we are increasing our outlook to reflect our strong first half performance and the continued momentum we are seeing across the demand environment,” Macpherson said.

Grainger now expects 2026 sales of $19.4 billion to $19.7 billion, representing growth of 8.4% to 10%. Its previous forecast called for sales of $19.2 billion to $19.6 billion and growth of 6.7% to 9.1%.

The momentum carried into July. Grainger said preliminary July sales increased more than 13% on a daily, organic, constant-currency basis. The company is also planning a September pricing action expected to add approximately 1% to annual revenue as it works to offset rising freight costs and tariff-driven product inflation.

Because Grainger serves customers across a broad range of industries, the higher outlook adds to evidence that improving demand is extending beyond a handful of specialized markets.

Electrical distribution remains one of the strongest markets

Graybar also reported record second-quarter results.

The St. Louis-based electrical, communications and industrial distributor generated net sales of $3.8 billion, up 11.8% from a year earlier. Net income increased 14.8% to $158.6 million from $138.2 million, marking the highest quarterly sales and earnings in the employee-owned company’s history.

For the first six months of 2026, net sales increased 12.1% to $7.1 billion, while net income increased 25.7% to $300.5 million.

“Achieving record second quarter results reflects the dedication of our employees and their commitment to delivering the best customer experience in the industry,” CEO Kathleen Mazzarella said. “These results also demonstrate the strength of our long-term strategy and the disciplined execution of key priorities across our business.”

Graybar is also expanding through acquisitions. The company added American Electric Supply during the quarter, strengthening its Southern California presence after acquiring Broken Arrow Electric Supply and its seven Oklahoma locations in March.

Taken together, Graybar and Wesco provide compelling evidence that electrical distribution remains one of the industry’s better-positioned sectors.

Electrical distributors sit at the intersection of several major investment cycles, including data centers, power generation and distribution, grid modernization, industrial automation, and infrastructure construction. Those markets appear positioned to remain important growth drivers through the end of 2026.

Tariffs put pricing back in focus

The second-quarter results also show pricing becoming a larger contributor to distributor sales growth.

Fastenal estimated pricing contributed 2.9 percentage points to second-quarter sales growth, compared with approximately 1.4 to 1.7 percentage points a year earlier.

Grainger also reported higher prices as tariff-related costs moved through the supply chain.

That makes headline sales growth increasingly important to dissect.

Part of the growth is coming from higher unit volume and market-share gains. Another part is coming from price increases.

And distributors are not necessarily retaining all those increases.

Fastenal’s gross margin declined 75 basis points to 44.6%. The company said an unfavorable net price-cost relationship accounted for about 40 basis points of the decline, with customer mix, rebates and higher transportation and fuel costs accounting for the remainder.

Pool Corp. reported a similar issue. Gross margin declined 30 basis points to 29.7%, primarily because of higher inbound freight costs and customer mix, partially offset by supply chain initiatives.

The challenge through year-end will be balancing higher selling prices against product, tariff, and transportation costs without weakening demand.

Productivity becomes the margin lever

Fastenal’s quarter also illustrates how distributors are responding to those pressures.

Despite the decline in gross margin, Fastenal maintained an operating margin of 21%. Selling, general and administrative expenses fell to 23.5% of sales from 24.4% a year earlier, an 80-basis-point improvement the company attributed to increased labor productivity and better leverage of fixed costs.

That dynamic could become increasingly important across wholesale distribution.

If product margins remain under pressure from tariffs, freight and large-account pricing, distributors will need to generate more revenue without allowing labor and operating costs to rise at the same pace.

That puts greater emphasis on warehouse automation, digital ordering, artificial intelligence, sales productivity, automated customer service, and inventory management.

For many distributors, protecting margins through the rest of 2026 could depend as much on operating productivity as on pricing.

Discretionary markets remain the weak spot

Pool Corp.’s results show why the second-quarter numbers should not be interpreted as evidence of a broad distribution boom.

The Covington, Louisiana-based swimming pool and outdoor-living products distributor reported second-quarter net sales of $1.8 billion, up 2% from a year earlier. Gross profit increased 1% to $540.8 million.

Management said maintenance demand remained steady and building-material sales improved, but discretionary spending remained muted. Europe was a bright spot, with sales increasing approximately 11%.

The distinction is important.

Customers continue to spend on maintaining existing assets. Industrial facilities are investing in productivity and automation. Large infrastructure projects are moving forward. Data center construction remains strong.

Spending that can be delayed remains less consistent.

Distributors heavily exposed to residential remodeling, discretionary construction and consumer-dependent markets could therefore face a much different finish to 2026 than Wesco, Graybar, Grainger, Fastenal and Applied.

M&A remains a growth strategy

Acquisitions also remain central to distributor growth.

Applied ended fiscal 2026 with what Schrimsher described as an active acquisition pipeline and expects M&A to remain part of its path toward $7 billion in annual sales.

Graybar completed multiple acquisitions during the first half of the year as part of its strategy to strengthen regional coverage.

Pool Corp. CEO John Watwood has also identified disciplined M&A as one of the company’s four strategic priorities, along with sales execution, pricing, and supply chain management.

The conditions continue to favor consolidation.

Many distribution markets remain fragmented, while the investments required to compete in technology, automation, inventory, digital capabilities, and technical talent continue to rise.

That increases the value of scale and gives larger distributors another avenue for growth even when underlying markets remain uneven.

What Q2 says about the rest of 2026

Taken together, second-quarter earnings point to a wholesale distribution market that is gaining momentum but becoming more divided.

Industrial demand is improving. Fastenal and Applied are reporting stronger manufacturing and maintenance activity after an extended period of sluggish industrial conditions.

Infrastructure remains a major growth engine. Wesco’s approximately 45% increase in data center sales and 60% increase in total backlog illustrate the scale of investment moving through electrical, utility and communications channels.

Pricing is contributing more to reported growth. Tariffs are pushing prices higher, making organic volume, customer activity and market-share gains increasingly important measures of underlying demand.

Margin pressure has not disappeared. Freight costs, tariffs, and large-account mix are weighing on product margins even as sales accelerate.

Market-share gains are separating the strongest distributors from the broader market. Fastenal’s large-account growth, Wesco’s cross-selling strategy, and double-digit growth across several major distributors show that competitive gains are contributing materially to results.

Technical capabilities are becoming more valuable. Applied’s strength in engineered solutions, automation and technically demanding applications underscores the growing value of distributors that provide expertise and services beyond product fulfillment.

And discretionary markets remain the weak spot. Pool Corp.’s results show that customers remain cautious about spending that can be postponed.

The message from Q2 is not that the entire distribution market is accelerating.

It is that the industry’s growth lanes are becoming much easier to identify.

Through the final months of 2026, demand appears strongest around infrastructure, data centers, industrial maintenance, automation, and investments tied directly to productivity and operating requirements. Customers remain more cautious about discretionary projects.

At the same time, the largest distributors are using technology, technical expertise, strategic accounts, and acquisitions to grow faster than their underlying markets.

That may be the most consequential signal coming out of the second-quarter earnings season.

Wholesale distribution is entering the final stretch of 2026 with stronger demand than it had at the beginning of the year. But the gains are not being distributed evenly — and the gap between companies positioned in the strongest end markets and those waiting for a broader economic recovery is likely to remain wide.

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Cardinal Health closed fiscal 2026 with higher sales and earnings as growth in its pharmaceutical and specialty business offset a fourth-quarter sales decline in its medical products distribution operation.

Fourth-quarter sales increased 6% to $63.7 billion from $60.2 billion a year earlier. Earnings rose 67% to $398 million from $239 million.

For the fiscal year ended June 30, sales climbed 14% to $254.2 billion from $222.6 billion in fiscal 2025. Earnings increased 10% to $1.71 billion from $1.56 billion.

“Fiscal 2026 was a standout year for Cardinal Health and I am pleased with our strong fourth quarter results,” CEO Jason Hollar said.

Hollar said all five of Cardinal Health’s operating segments posted double-digit profit growth for the year, even before the benefit of tariff refunds.

Cardinal Health’s Pharmaceutical and Specialty Solutions business, its largest segment, remained the primary growth driver.

Fourth-quarter sales increased 6% to $58.8 billion from $55.4 billion a year earlier, driven by higher sales of branded and specialty pharmaceuticals to existing customers. Segment profit rose 21% to $645 million from $535 million.

For the full year, Pharmaceutical and Specialty Solutions sales increased 15% to $234.8 billion from $204.6 billion. Segment profit rose 23% to $2.8 billion from $2.3 billion.

Results were mixed in Cardinal Health’s Global Medical Products and Distribution business.

Fourth-quarter sales declined 2% to $3.1 billion from $3.2 billion a year earlier. Cardinal Health attributed the decline primarily to lower distribution volumes and tariff-related refunds to customers, partially offset by growth in Cardinal Health-branded products.

Segment profit increased to $150 million from $70 million, primarily because of tariff refunds.

For the full year, Global Medical Products and Distribution sales increased 1% to $12.7 billion from $12.6 billion. Segment profit rose 91% to $258 million from $135 million.

Cardinal Health’s three other operating businesses — Nuclear and Precision Health Solutions, OptiFreight Logistics and at-Home Solutions — also grew during the quarter.

Combined fourth-quarter sales increased 7% to $1.7 billion from $1.6 billion a year earlier, while profit rose 14% to $183 million from $160 million. Cardinal Health attributed the profit increase to growth at OptiFreight Logistics and at-Home Solutions.

For the full year, sales from the three businesses increased 26% to $6.8 billion from $5.4 billion. Profit rose 37% to $707 million from $516 million.

Cardinal Health expects growth across its businesses to continue in fiscal 2027.

The company expects Pharmaceutical and Specialty Solutions sales to increase 3% to 5%, with profit growing 8% to 11%.

Global Medical Products and Distribution sales are expected to increase 2% to 4%. Cardinal Health expects its Nuclear and Precision Health Solutions, OptiFreight Logistics and at-Home Solutions businesses to generate combined sales growth of 11% to 13% and profit growth of 15% to 18%.

The forecast includes the expected contribution from Cardinal Health’s recently completed acquisition of Strive Medical and its announced acquisition of AdaptHealth’s Diabetes Health business.

The company is also expanding its physical distribution network. Cardinal Health plans to open a distribution center in Indianapolis in 2027 that will feature advanced robotics and automation to add capacity and increase operating flexibility.

Cardinal Health is a distributor of pharmaceuticals and specialty products and a manufacturer and distributor of medical and laboratory products. The company also supplies home health and direct-to-patient products and services and operates nuclear pharmacies and logistics and data businesses.

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US Foods reported higher second-quarter sales and earnings, driven by stronger case volume from independent restaurants and continued productivity improvements.

The food service distributor reported second-quarter net sales of $10.5 billion, up 4.5% from $10.1 billion a year earlier. Net income increased 22.8% to $275 million from $224 million.

For the first six months of fiscal 2026, net sales increased 3.6% to $20.1 billion from $19.4 billion in the same period last year. Net income rose 15.3% to $391 million from $339 million.

The company reaffirmed its full-year forecast for 4% to 6% sales growth and 9% to 13% adjusted operating profit growth.

“Our team delivered another strong quarter, highlighted by accelerating volume grow,” CEO Dave Flitman said, adding that the company continued to gain market share while improving customer service and productivity.

Total case volume increased 1.9% during the quarter, led by 5.1% growth in independent restaurant case volume. Healthcare case volume increased 3.5%, while hospitality volume rose 4.4%. Chain restaurant volume declined 1.5%.

Organic case volume increased 1.7%, including 5.0% growth among independent restaurants. Net sales also benefited from approximately 2.3% food cost inflation.

The company said it continues to focus on independent restaurants, one of its fastest-growing customer segments, as part of its long-term strategy to gain market share.

Gross profit increased 8.0% to $1.9 billion from $1.78 billion, reflecting higher case volume, improved purchasing and inventory management, and favorable product costs. Gross margin improved to 18.2%.

Operating expenses increased 5.1% to $1.5 billion from $1.4 billion, primarily because of higher distribution, selling and administrative costs tied to increased business activity. The company said those costs were partially offset by efforts to streamline administrative operations and improve productivity.

Chief financial officer Dirk Locascio said the company’s operating initiatives continued to improve profitability.

“Our second-quarter results reflect consistent execution of our key initiatives, supported by strong operating performance,” he said. “We expanded margins again this quarter through a combination of volume growth, gross profit gains and cost productivity improvements.”

US Foods generated $725 million in operating cash flow during the first six months of the year, unchanged from the prior-year period. The company invested $174 million in technology, facilities, and distribution infrastructure during the first half.

With more than 70 distribution centers, 90-plus cash-and-carry locations and approximately 250,000 customer locations, US Foods is one of the nation’s largest foodservice distributors.

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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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Builders FirstSource has acquired Innovative Construction Group (ICG) from PulteGroup Inc., adding off-site manufacturing and installation capabilities that further expand the company’s presence in the Southeast as it prepares to report second-quarter earnings this week.

Terms of the transaction were not disclosed.

Founded in 2009 by Ryan and Andy Melin, ICG designs, manufactures and installs wood-framed structural components for single-family and multifamily construction. The company operates manufacturing facilities in Green Cove Springs, Florida, and Florence, South Carolina, producing roof trusses, wall panels and floor systems while providing structural design, delivery, installation and field supervision.

“The addition of ICG to Builders FirstSource strengthens our presence in the Southeast with turnkey framing solutions including structural design, trusses, wall panels, floor systems, delivery, installation and field supervision,” said CEO Peter Jackson.

The acquisition strengthens Builders FirstSource’s strategy of expanding beyond traditional building materials distribution into higher-value manufacturing and construction services. The company has steadily increased its investments in factory-built building components, digital design and installed solutions as homebuilders seek to improve productivity, reduce construction time and offset persistent skilled labor shortages.

PulteGroup acquired ICG in 2020 as part of its effort to expand off-site construction capabilities. Under PulteGroup’s ownership, ICG continued operating as a standalone business serving both PulteGroup and third-party builders.

The deal also expands Builders FirstSource’s manufacturing footprint in the Southeast, one of the nation’s strongest residential construction markets, and broadens its ability to provide builders with integrated framing solutions from engineering and manufacturing through on-site installation.

Builders FirstSource is scheduled to report second-quarter results before the market opens Tuesday, Aug. 4. Investors are expected to focus on residential construction demand, repair-and-remodel activity, pricing, margins, capital allocation and acquisitions.

The ICG acquisition is likely to receive attention during the earnings call as management discusses its strategy for expanding value-added services. While Builders FirstSource remains the nation’s largest supplier of building materials to professional builders, the company has increasingly positioned itself as a provider of manufactured components and turnkey construction solutions that generate higher margins and deepen customer relationships.

The transaction reflects a broader shift across the building products distribution industry. As housing markets remain uneven and labor shortages persist, distributors are investing in prefabrication, engineered products and installed services to differentiate themselves, improve productivity and capture a larger share of construction spending.

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SiteOne Landscape Supply Inc., the nation’s largest wholesale distributor of landscape supplies, reported higher second-quarter sales and net income despite continued weakness in residential construction and landscape renovation, with acquisitions and price increases helping offset softer demand.

Second-quarter sales increased 4.7% to $1.53 billion, up from $1.46 billion a year earlier. Net income attributable to SiteOne rose 8.0% to $139.3 million, compared with $129.0 million in the second quarter of 2025.

For the first six months of 2026, sales increased 2.9% to $2.47 billion, compared with $2.40 billion in the same period last year. Year-to-date net income attributable to SiteOne increased 10.8% to $112.7 million, up from $101.7 million in the first half of 2025.

Organic daily sales increased 1% during the quarter as higher prices and commercial sales initiatives offset slower demand from residential construction and repair projects. Acquisitions contributed $49.2 million, representing about 3% of the company’s quarterly sales growth.

“We delivered a solid second quarter performance with 5% growth in net sales despite softer end markets,” CEO Doug Black said. “Our teams executed well throughout the quarter, managing the market challenges, delivering value to our customers and suppliers, achieving operational improvements and managing our spending to reduced demand.”

SiteOne continued to expand through acquisitions during the quarter, acquiring the remaining 25% ownership interest in Devil Mountain Wholesale Nursery. Black said previously acquired companies, led by Reinders, continued to perform well and that the company’s acquisition pipeline remains active.

The company said residential construction remains its biggest challenge. It estimates new residential construction is down by the high-single-digit percentage range, while repair and upgrade activity has declined by the mid-single-digit percentage range. Those declines have been partially offset by modest growth in landscape maintenance and steady demand for new commercial construction.

Black said the company expects those market conditions to continue through the remainder of the year.

“Given the ongoing macroeconomic uncertainty, we expect these trends to continue through the full year,” he said. “Pricing was up 3% in the quarter and we expect this also to continue through the remainder of the year.”

SiteOne expects organic daily sales growth to range from flat to 1% for the full year, supported by continued pricing actions and commercial initiatives. The company also expects acquisitions to remain an important source of growth in 2026.

Based in Roswell, Georgia, SiteOne supplies irrigation products, nursery stock, hardscapes, outdoor lighting, agronomic products and other landscaping supplies to professional landscape contractors across the United States and Canada.

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MSC Industrial Supply reported stronger fiscal third-quarter results on July 1, with higher sales and sharply improved earnings as customer demand strengthened and the company expanded operating margins.

The metalworking and maintenance, repair and operations (MRO) distributor reported fiscal third-quarter net sales of $1.047 billion, up 7.8% from $971.1 million in the prior-year quarter. Net income increased 41.4% to $80.4 million, compared with $56.8 million a year earlier.

For the first nine months of fiscal 2026, MSC generated net sales of $2.931 billion, an increase of 5.0% from $2.791 billion during the same period last year. Net income rose 22.3% to $174.7 million from $142.8 million.

Operating income for the quarter increased 29.0% to $106.7 million from $82.7 million a year earlier, while gross profit increased to $430.4 million from $397.7 million. Gross margin edged up to 41.1% from 41.0%. For the first nine months of the fiscal year, operating income rose 14.0% to $247.8 million from $217.3 million, and operating margin improved to 8.5% from 7.8%.

CEO Martina McIsaac attributed the stronger quarter to continued momentum among the company’s core customers and improved performance in its national accounts business as strategic initiatives gained traction.

Interim chief financial officer Greg Clark said average daily sales exceeded the high end of the company’s guidance as both pricing and product volumes contributed to growth. He said the company translated that sales growth into improved profitability.

Looking ahead, MSC forecasts fiscal fourth-quarter average daily sales growth of 6.5% to 8.5% year over year and expects an adjusted operating margin between 10.0% and 10.8%. The company maintained its full-year outlook, including approximately $90 million in capital expenditure.

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People need to sleep, but AI doesn’t. And AI can sift through mountains of data faster than humans can. The result: AI can increase the efficiency of every department within a distributor—including sales, credit, and order management—and make those teams work together more effectively.

How AI is doing that today, and will do it even more in the near future, was the subject addressed by three tech experts in a session today at Distribution Strategy Group’s Applied AI for Distributors conference entitled “Intelligent Revenue Operations: Aligning Customer, Procurement & Digital Strategy With AI.”

Speaking on the panel were Matthew Skidmore, solutions consultant and North America team lead at SugarAI (formerly SugarCRM), a customer relationship management technology provider; Alok Pradhan, co-founder and CEO of AI-focused ERP vendor Turn; and Ryan Ayers, co-founder and CEO, Suppli, which provides credit and collection software for distributors.

They explained how AI makes each of the departments they work more efficient and also provides information to related departments to help break down the siloes that often keep distributors from serving customers well and increasing profits.

Skidmore gave the example of a chief financial officer he spoke with at the conference who wants her sales reps to know when a customer has past-due bills so they don’t spend time trying to sell them more products. “She said that if the sales rep knew ahead of time this account is on credit hold they would know they can’t upsell them, because I’m not going to allow that sales to go through,” he said.

Not only can AI alert the sales rep to the credit hold, Skidmore added, it can also provide information on who in the credit department to talk to about ways to address the problem and possibly save the sale.

The three panelists explained other ways AI can boost profits, both by increasing revenue and cutting costs. That inevitably led to the question of whether AI will reduce headcount, a touchy subject that produced some revealing insights.

‘Connect the dots’ for greater efficiency

AI’s ability to automate routine tasks is a big way it reduces costs and increases revenue, especially when applied across an entire workflow, said Turn’s Pradhan. He described how a distributor can use AI to respond to more requests for quotes, especially lower-value ones that may otherwise be ignored, follow up on those quotes in an automated way, take the order, send the invoice and collection notices. and reconcile payment with the invoice.

“End to end there are just two touches,” he said, “when the sales rep is checking the quote and the warehouse is shipping the order. “When you connect the dots you see the compounding benefits of Ai. That’s what people underestimate.”

Skidmore noted that many distributors’ have experienced sales reps, such as a fictional rep he called Jim, who have been doing their jobs for a long time and do it well. Why spend money on AI when Jim is getting the job done?

The reason is that AI can continuously review the entire customer file and point out opportunities that Jim might miss. “As excellent as Jim is, he can tell you all about his top 20 customers and his bottom 20, but he won’t be able to tell you about the middle customer,” Skidmore said. AI can look at every customer’s purchase history and payment performance and make suggestions, “not just about the top 20 customers, about all of them.”

The credit team also can use AI to better serve, and get payment from, smaller customers that might otherwise get little attention until their bills are past due, said Suppli’s Ayers. He said it’s important to focus on smaller buyers instead of just the larger customers whose size gives them leverage to ignore requests for payment.

“If you take an initiative-taking approach with smaller customers you can make an impact,” he said. He noted that AI can continually scan outside data, such as bankruptcy filings, as well as internal account information, to spot signs a customer is at risk of failing financially.

“You don’t have to wait for something to go wrong before you engage with the customer,” Ayers said. “If you spot the danger signals  you don’t have to wait for late payments, or even worse, writeoffs.”

Ayers also noted that AI-driven systems that make it easy for customers to pay, such as within emails or texts, can lead to faster payment. Offering convenient payment options is a way smaller distributors can compete with multinational competitors, he added.

In explaining how AI can help credit and sales teams work better together, Skidmore pointed out that when a sales rep gets an order email from a customer an AI-powered system can inform the rep to be aware the customer is on a credit hold before taking an order that will be rejected.

AI and the ‘attrition myth’

The three panelists all agreed that AI will make employees more efficient but hesitated to say that will result in lower headcount.

Pradhan, for example, pointed out that for many distributors 30% of their workforce is going to leave in the next three to five years, and that AI can fill the gap by enabling, for example, the sales reps that remain to process two to three times more order volume.

But Distribution Strategy Group co-founder Ian Heller, at the close of the session, explained that while AI won’t reduce headcount initially, because roughly 30% of employees will leave for other jobs, that will be less true in a few years as AI automates routine tasks. He said that two-thirds of the people leaving now are going to other jobs, while the rest presumably are retiring, but that fewer will leave if there aren’t jobs to go to at other companies.

What he called the “attrition myth” that employees leaving voluntarily will mitigate the impact of AI on headcount will be more obvious by 2030 or so, Heller said. But, he added, that doesn’t mean distributors should hold off on implementing AI, because those that do will rapidly lose market share to competitors that do invest in AI.

“Your only option,” Heller said, “is to grow your enterprise so you can take care of your people.” And that means taking advantage of AI’s power to boost profits.

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Core & Main reported higher first-quarter earnings despite flat sales, as the water infrastructure distributor benefited from margin expansion, disciplined pricing, and lower interest expense amid steady municipal demand.

Net sales for the fiscal first quarter ended May 3 were $1.91 billion, compared with $1.911 billion in the same period a year earlier, a decline of less than 0.1%.

Net income increased 7.6% to $113 million from $105 million in the prior-year quarter. Net income attributable to Core & Main rose 8.0% to $108 million from $100 million.

Gross profit increased 2.0% to $520 million from $510 million. Gross margin expanded by 50 basis points to 27.2% from 26.7%, reflecting the company’s pricing initiatives and purchasing discipline.

Operating income rose 3.5% to $177 million from $171 million. Selling, general and administrative expenses increased 2.0% to $299 million from $293 million, driven by higher distribution costs and investments in new locations and sales initiatives.

CEO Mark Witkowski said municipal demand remained healthy during the quarter, supported by repair-and-replace activity and infrastructure spending. The company reported double-digit growth in treatment plant solutions and high-single-digit growth in smart utility products.

By product category, sales of pipes, valves and fittings declined because of lower volume, while storm drainage sales also decreased. Fire protection product sales increased on higher volume and pricing, and smart utility product sales grew on stronger demand.

Operating cash flow totaled $82 million, up 6.5% from $77 million in the prior-year period.

Core & Main continued to invest in network expansion, opening five greenfield locations during the quarter.

Core & Main reaffirmed its fiscal 2026 outlook, projecting net sales of $7.8 billion to $7.9 billion, representing growth of 2% to 3%.

Based in St. Louis, Core & Main distributes water, wastewater, storm drainage and fire protection products to municipalities, utilities, and contractors through a network of more than 370 locations across the United States and Canada.

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