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The improvement at McLane is very good news. On a TTM basis, pre-tax earnings as a percentage of revenues has been 1% for two quarters in a row after substantially falling short of that benchmark in recent years, sometimes as low as 0.5%. That's pretty important since revenues have not increased commensurate with inflation, as I would expect. $50.5 billion for 2019, pre COVID, and just $51.6 billion TTM, which is far short of inflation which is odd for a distribution business and could indicate lower market share (?). So margin improvement is good news.
Excellent point. If McLane can consistently keep its margin over 1% (and who knows, maybe even keep growing it), that's a huge improvement for the company.
Great edition!
Thanks! 🙏
Many thanks again for your detailed research!
Thanks for the kind words! Much appreciated :)
The improvement at McLane is very good news. On a TTM basis, pre-tax earnings as a percentage of revenues has been 1% for two quarters in a row after substantially falling short of that benchmark in recent years, sometimes as low as 0.5%. That's pretty important since revenues have not increased commensurate with inflation, as I would expect. $50.5 billion for 2019, pre COVID, and just $51.6 billion TTM, which is far short of inflation which is odd for a distribution business and could indicate lower market share (?). So margin improvement is good news.
Excellent point. If McLane can consistently keep its margin over 1% (and who knows, maybe even keep growing it), that's a huge improvement for the company.