Global Industrial Company (NYSE:GIC) Q1 2023 Earnings Conference Call May 2, 2023 5:00 PM ET

Company Participants

Barry Litwin - Chief Executive Officer

Tex Clark - Senior Vice President, Chief Financial Officer

Mike Smargiassi - Investor Relations

Conference Call Participants

Anthony Lebiedzinski - Sidoti

Operator

Good day! And welcome to Global Industrial Company First Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. Please note, this event is being recorded.

I’d now like to turn the conference over to Mike Smargiassi, Investor Relations. Please go ahead.

Mike Smargiassi

Thank you, and welcome to the Global Industrial First Quarter 2023 Earnings Call. Leading today's call will be Barry Litwin, Chief Executive Officer; and Tex Clark, Senior Vice President and Chief Financial Officer. Formal remarks will be followed by a question-and-answer session.

Today's discussion may include certain forward-looking statements. It should be understood that actual results could differ materially from those projected due to a number of factors, including those described under the forward-looking statements caption and under Risk Factors in the company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

The press release is available on the company's website and has been filed with the SEC on a Form 8-K. This call is the property of Global Industrial Company.

I will now turn the call over to Barry.

Barry Litwin

Thanks Mike. Good afternoon everyone and thank you for joining us. First quarter performance reflects a continuation of the recent demand environment, with average daily sales declining 3.7%. Price was neutral in the period and volume remained muted, reflecting cautionary purchase behavior, specifically within our core, small and medium business customer base.

These trends have continued into the second quarter. We recorded strong growth from our largest accounts in the quarter. In addition, customer retention remained healthy overall, which we believe reflects the value of our one-to-one managed sales organization.

We were very pleased with gross margin performance of 35.9%, a slight decline from sequential quarter results, but as expected, off from record results in the year-ago period. Product margin was solid and expanded each month as we moved through the quarter, reflecting a continuation of the benefit we are receiving from lower-cost inventory flowing into our cost of sales.

Our focus on the customer continues to drive our strategy, and we made further progress on operational excellence and digital transformation initiatives during the quarter. Recent e-commerce sales performance on our new web platform has been below our expectations. We have identified a number of user experience changes that are increasing friction while navigating our e-commerce site. We aggressively worked to address these issues. In this regard, we recently completed navigation enhancements on the product experience to enhance shopability and additional optimization efforts are ongoing.