Inquired about the most important initiatives currently driving results and those expected to be most impactful going forward.

Anesa Chaibi highlighted the combination of changing the go-to-market strategy, building out an outside sales team, increasing customer interaction, and expanding product assortment (including national brands). She emphasized that it's still early innings but the strategy is working and will continue to be scaled. “I mean I touched upon a variety of things, but our specialization expansion and services strategy is working. Most important, I think it's a combo of all of the things that I mentioned, but in particular, we changed the go-to-market strategy and the approach in the way that we go to market along with building out an outside sales team and just having more interaction and getting more entrenched with our customers, Michael.”

Asked about the drivers of the increased cash balance (beyond tariff refunds) and plans for capital allocation, including M&A, buybacks, or special dividends.

Tex Clark noted strong cash conversion from sales and good collections. Anesa Chaibi added that they are building out an M&A pipeline to help execute and speed up their go-to-market strategy, in addition to ongoing share repurchases and dividends. “Yes, the only thing I'll add is that I'm also looking at M&A opportunities, and that's something that we're building out a pipeline and leaning into more so to help us execute and expand and speed up our go-to-market, if you will, Michael.”

Inquired if there was much variability in average daily sales growth from April through June, or if it was consistent throughout the quarter.

Tex Clark confirmed that average daily sales growth was "pretty consistent throughout April, May and June," and that this consistent growth rate has continued into the third quarter. “But when you look at an average daily sales basis, our growth rate was pretty consistent throughout April, May and June, which gives us something that we saw pretty consistent through the first part of the year as well. So very stable, good growth profile consistently to get us to where we are.”

GIC

Global Industrial (GIC) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Aug 4, 2026

Source: earnings call transcript

Executive summary

Global Industrial Q2 FY26 — Strong Broad-Based Growth Driven by Strategic B2B Repositioning

Global Industrial delivered strong Q2 FY26 results, driven by its strategic repositioning towards a relationship-led B2B model. The company saw robust average daily sales growth, fueled by expanding GPO relationships and e-procurement capabilities, which are deepening customer integration and share of wallet. Despite gross margin pressures from elevated transportation costs and mix shifts, management remains focused on strategic execution, vertical expertise, and data-driven initiatives to sustain organic growth and market share gains.

Highlights

Second quarter revenue increased 7.7% or 9.3% on an average daily basis, marking the third consecutive quarter of high single-digit average daily sales growth.
GPO business reached meaningful scale with annualized sales on pace to hit $100 million this year.
Expanded e-procurement customer base with more than 50 new purchasing connections, bringing total digital connections to greater than 1,300 customers.
Overall digital business represents more than 60% of transaction volume.
Canadian team delivered an exceptional quarter with revenue increasing more than 30% in local currency, marking the fourth consecutive quarter of double-digit growth.

Concerns

Non-GAAP gross margin was 34.7%, down from a record 37.1% in Q2 FY25, impacted by inflation in transportation network (fuel surcharges) and product/channel mix.
Fuel costs remain volatile and transportation expense continues to be elevated, impacting gross margin.
Increased mix of larger orders, while profitable, provided a slight headwind on the gross margin line.

Guidance & targets

Category	Target	Timeline	Confidence
Capital expenditures	$3 million to $4 million medium materiality	FY26	High
Effective tax rate	26% and 26.5% medium materiality	Remainder of FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
U.S. U.S. revenue growth in Q2 FY26.	—	6.3%	—	—
Canada Exceptional quarter for the Canadian team, marking the fourth consecutive quarter of double-digit growth in local currency. Revenue in local currency: increased more than 30%Consecutive quarters of double-digit growth: 4Annual revenue (local currency): surpassed $100 million last year	—	33.7%	—	—

Deals & partnerships

Customers via GPO relationships Access to new customers through established contractual arrangements and engagement with sophisticated procurement buyers. Annualized sales on pace to hit $100 million this year

GPO relationships provide industry specialization for public sector, health care, hospitality, and private sector manufacturing, aligning with customer vertical approach. Creates natural pathway into e-procurement systems.

Risks & headwinds

Inflation in transportation network Q2 FY26, expected to continue into Q3 FY26

Increased fuel surcharges; impacted Q2 FY26 non-GAAP gross margin of 34.7%.

Mitigation:Partially passed through to customers, company absorbed other portions; pricing, sales, and merchandising teams focused on mitigating effects.

Product and channel mix shift Q2 FY26

Lower contribution from seasonal cooling category compared to prior year; increased mix of larger orders provided a slight headwind on gross margin.

Mitigation:Larger orders are profitable and accretive to overall business; management focuses on overall margin profile.

Macroeconomic environment volatility Ongoing

External macroeconomic environment, geopolitical conditions, transportation costs, and other sources of volatility.

Mitigation:Proactively managing these factors while focusing on controllable areas like deepening customer relationships and strengthening vertical expertise.

Trade policy changes Ongoing

Future changes to trade policy could impact gross margins.

Mitigation:Continuously monitoring and observing changes to trade policy.

What to watch in Q3 FY26

Gross margin trajectory

next quarter

Current 34.7% (non-GAAP Q2 FY26)

Target Stability or improvement from current levels

Why it matters

Gross margin was impacted by transportation costs and mix shifts; monitoring its stability is key to profitability.

I think it's probably something that we can project to be in line with where we're at going forward. Last year, we were getting the benefit in Q2 and Q3 really of those pricing actions before the tariffs fully came into impact. We saw that margin rate decline a little bit into that fourth quarter last year then. So again, right now, we don't expect as many of those pricing actions. But again, it's something that we'll have to continue to monitor and observe what's happening out there with changes to trade policy, with changes to fuel.

Find out whether GIC delivers this. Inve re-checks your case every morning.

Q&A highlights

Asked for the specific puts and takes contributing to the gross margin decline (ex-tariff refunds) from Q2 FY25 to Q2 FY26, particularly regarding higher transportation costs.

Management attributed the decline primarily to continued inflation in the transportation network (fuel surcharges), which was partially absorbed, and a shift in mix towards larger orders that, while profitable, had a slightly lower gross margin rate.

“I think what we're seeing is the number one impact in the period was that continued inflation within our transportation network, both LTL and UPS or parcel-related charges saw those increased fuel surcharges that we had. And while some of that was passed through to customers, other portions of that was absorbed by the company, which impacted that gross margin.”

asked by Michael Francis · answered by Thomas Clark

2 min read 6 chapters

Detailed narrative

Strategic Repositioning and B2B Model Evolution

Global Industrial is actively repositioning towards a deeper relationship-led B2B model, aiming to become a preferred supplier by integrating into customer purchasing processes. This shift focuses on strengthening the value proposition, improving retention, and increasing share of wallet, with significant runway remaining for further evolution in 2026 and beyond.

The company is building out capabilities to support a full customer experience, including sales representatives, product specialists, and integrated digital platforms.

GPO and E-Procurement Expansion

The company's GPO business has reached meaningful scale, on pace for $100 million in annualized sales, providing access to new customers and sophisticated procurement buyers. E-procurement capabilities are also expanding, with over 50 new purchasing connections in H1 2026, bringing total digital connections to over 1,300 customers.

The overall digital business now represents more than 60% of transaction volume, enhancing ease of use and customer retention.

Sales Organization Specialization and Vertical Expertise

Global Industrial is enhancing its sales organization with inside and field-based resources, national account support, and vertical expertise. This specialization allows for more relevant conversations, identification of additional product applications, and delivery of complete solutions. This approach is translating into larger orders, stronger performance from strategic customers, and purchases across multiple core product categories.

Gross Margin Dynamics and Tariff Refunds

Non-GAAP gross margin for Q2 FY26 was 34.7%, down from 37.1% in Q2 FY25. This decline was primarily due to continued inflation in transportation costs (fuel surcharges) and product/channel mix, including a lower contribution from seasonal cooling. The company recorded approximately $26 million in IEEPA tariff refunds, with $21 million recognized in cost of sales and $4 million reducing inventory, which was excluded from non-GAAP results.

Strong Cash Position and Capital Allocation

The company ended Q2 FY26 with $86.7 million in cash and no debt, reflecting strong cash conversion and the receipt of tariff refunds. Management continues to focus on a capital allocation strategy that includes investing in the business, share repurchases (160,000 shares for $4.7 million in Q2), and consistent dividends. The company is also actively exploring M&A opportunities to accelerate its go-to-market strategy.

Canadian Business Performance

The Canadian team delivered an exceptional quarter, with revenue increasing over 30% in local currency, marking the fourth consecutive quarter of double-digit growth. This performance highlights the expanding scale and significant long-term potential of the Canadian business, which surpassed $100 million in annual revenue in local currency last year and continues to demonstrate its growth trajectory.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.