Distributor Foot Traffic: Softer Data, 1 Less Selling Day; Qtr Trends ~In Line

Research evidence excerpt

Distributor Foot Traffic: Softer Data, 1 Less Selling Day; Qtr Trends ~In Line

t +0.1% y/y vs +8.6% (easier

comps), making R3M data +6.4%. Consensus forecasts 2Q HTS daily sales up ~10.3% y/y, which

is directionally in line with this month's read. We note GWW has a 0.65 correlation with R3M sales,

making it a significant directional indicator, in our view. Recent meetings with management takes

HERE.

WESCO (Ex 5): While Local SSS R3M foot traffic has a historical 0.63 correlation with WCC's EES

business, post-COVID the trend has been increasingly volatile. May monthly visits read +5.8% vs

Apr +4.9%, as R3M data was +5.7%. The monthly read compares against cons of ~5.7% 2Q organic

growth for the segment. WCC's EES business comprises ~37% of total sales and has seen less

growth vs the CSS business, which houses most of WCC's data center exposure.

Fastenal (Ex 6 & Ex 7): May y/y monthly visits read -8.6% vs -5.9% in Apr. We note our foot traffic

shows only a 0.31 correlation with FAST's sales. The discrepancy is likely due to FAST's transition

away from traditional branch locations to e-com and onsite/vending, which is not captured in our

data along with price impacts. We are supportive of FAST's continued outgrowth, with May Daily

Sales +14.8% (Read HERE). Stephen Volkmann, CFA * | Equity Analyst

(212) 284-2031 | svolkmann@jefferies.com

POOL Corp (Ex 8): Local SSS monthly visits decreased m/m, to -3.9% y/y, while R3M data read

Chirag Patel * | Equity Associate+4.6% as Cons sees 2Q net sales +2%. We note foot traffic data for POOL exhibits a correlation

(212) 284-1773 | cpatel@jefferies.com

of only 0.40, making it a weaker predictor of trends, in our view. Interestingly, March (most recent

data) pool permits were down LSD (Read HERE). Jamie Simonson * | Equity Associate