CDW records another muted quarter as earlier layoffs fail to turn the tide

The reseller's UK and Canadian businesses recorded significant drops in net sales

CDW has reported another set of underwhelming results in its third quarter, with net sales for the period amounting to $5.6bn (£4.61bn) globally, reflecting a 9.4 per cent decrease compared to $6.2bn in the third quarter of 2022.

The IT giant's UK and Canadian operations reported combined net sales of $601m, reflecting a 15.4 per cent decrease compared to 2022.

The decline was driven by reduced sales in the corporate and small business segments, as well as in CDW's UK and Canadian operations, as businesses focused on reprioritising their expenditures in light of ongoing economic uncertainties.

Gross profit in the third quarter of 2023 stood at $1.2bn, representing a slight decrease of 0.4 per cent compared to the 1.2 per cent reported for the third quarter of 2022.

The gross profit margin expanded to 21.8 per cent in the third quarter of 2023, up from 19.8 per cent in the third quarter of 2022, driven by higher product margins, improved margin rates across various categories, and a more favourable contribution of netted down revenue, especially in software-as-a-service offerings.

Notably, public segment net sales saw a 1.5 per cent increase in 2023, primarily due to higher sales to healthcare and education customers.

Meanwhile, government customer sales remained flat.

Net sales in the corporate and small business segments saw declines of 12.3 per cent and 21.7 per cent, respectively.

The latest results follow similar declines in Q2, after employees at the reseller group were hit with layoffs in April.

They come at a mixed quarter for the UK resale sector, as Computacenter recently posted a 'difficult' set of UK results, while Bytes reported it had surpassed £1bn in its latest half-year.