'Record second quarter' for CDW despite fall in UK net sales

UK net sales reflected a 'slower commercial recovery' according to CEO Chris Leahy

CDW saw its UK sales decrease by "low single digits" for the three months ending June 30 despite a "record second quarter" for the business overall.

Net sales for the company rose 17.9 per cent year-on-year to reach $5.1bn, while non-GAAP net income reached $286.1m, a 27 per cent increase from the same quarter last year.

But in the UK, CEO Chris Leahy said net sales had decreased "in the low single digits" in local currency, reflecting a "slower commercial recovery" despite a strong public sector performance.

CDW's share price spiked by almost four per cent to $190 as markets opening on Wednesday morning responded to the financial results.

"Our record second quarter performance reflected a rebound in commercial customer spending, driving excellent results in our corporate small business and Canada segments and continued strength in our education channel," Leahy said on the second quarter earnings call.

"Our results reflect strong momentum across our business as technology spending recovers from lower spending last year, and also increased demand as customers seek to modernise, optimise and innovate.

"The diversity of our customer end markets and breadth of our solutions portfolio continues to serve us well."

The healthy quarter for the company included growth in its corporate division, where "customer spend sharply recovered," according to Leahy, with net sales rising 27.3 per cent compared to Q2 in 2020 to reach almost $2bn.

In its small business category, growth reached just under 60 per cent year-on-year, coming in at $483m, while net sales in its public channel increased by 2.9 per cent despite a 28.7 per cent decrease in government net sales.

But Leahy warned the company had endured supply challenges during the quarter meaning its backlog increased compared to the first quarter and she expects the supply constraints "to continue through the second half of the year and into next year".

She added that the business saw "strong double-digit" cloud customer spend during the quarter which was driven by "robust growth" in customer segments including "security, infrastructure-as-a-service and productivity".