Shares of Wesco, a provider of supply-chain solutions, experienced a significant decline of more than 16%. This drop followed the company's decision to lower its full-year sales forecast due to the dissipation of pandemic-related supply-chain disruptions.
In premarket trading, Wesco's shares fell by 16.4% to $150. However, it is important to note that, prior to this decline, the stock had demonstrated strong performance throughout the year, having risen by over 43%.
According to Wesco's Chief Executive, John Engel, the correction of supply-chain disruptions and changes in customer purchase patterns, which were initially induced by the pandemic, are now occurring at a rapid pace. In an effort to mitigate the impact of these changes, the company aims to cut costs and achieve $25 million in annual savings.
As a result of the revised sales outlook, Wesco now forecasts growth of 5% to 7%, down from the initial projection of 6% to 9%. The primary reason behind this adjustment is weakness observed in certain sectors within the company's Electrical and Electronic Solutions segment.
Analysts surveyed by FactSet had previously anticipated full-year earnings per share of $17.24. In contrast, Wesco has set a more conservative target range of $15 to $16.
It remains to be seen how these adjustments will impact Wesco's financial performance going forward.