CDW CEO: Supply Chain Issues Are An Opportunity
‘The supply chain is what it is. It’s not getting better and it’s not getting worse. Some pockets are getting better, some pockets are getting more difficult and we‘re going to be living with this through 2022 if not into 2023. It’s a matter of who manages it the best, and I think we’re doing a really good job of that,’ says Christine A. Leahy, CDW president and CEO.
CDW President and CEO Christine A. Leahy says supply chain shortages for the company remain unchanged but that the company is pivoting to assist its customers and work around the shortages.
“We‘re not seeing a lot of change in the challenges that we’re all facing,”said Leahy during the Lincolnshire, Ill.-based national IT solution provider’s first quarter earnings call on Wednesday. “When we think about the supply chain environment, it’s an opportunity but it’s also frustrating. It’s an opportunity for CDW because we know what’s happening. We have more visibility with our partners than anybody. It‘s complex because on the solution side, what happens is if you’re an integrated solution, if you’re missing one part of that, you can’t get the software out if you don‘t have the hardware, so it gets pretty complex.”
She said CDW’s competitive advantages include the ability to take on inventory to support customers, distribution and logistics capabilities, “that put us in a great position to manage the supply chain issues better than anybody in the market.”
“It’s frustrating for customers,” she said. “And we’re helping customers get through that because we can help them choose alternatives, which they‘re a little more open-minded about now.”
During the call, Albert J. Miralles, senior vice president and chief financial officer for CDW, reported total net sales in the Q1 2022 were $5.949 billion, compared to $4.838 billion for the first quarter of 2021. Net income was $250 million in the first quarter of 2022, up 7.6 percent from $233 million in the first quarter of 2021. Gross profit for the first quarter were $1.104 billion, compared to $795 million for 2021.
CDW’s stock was $169.87 per share Thursday afternoon, down about 17 percent from where it stood at the start of the year.
Leahy said CDW continues to see very strong endpoint solution performance this quarter.
“We‘re also seeing what typically follows that and what was delayed a bit over the last couple of years, which is an investment in the hybrid infrastructure to support all the needs of the co -workers and the expectations both at the workload and application level and everything required to create a stronger and more robust infrastructure for those devices,” she said. “If the past two years have shown us anything, it is that our role as a trusted strategic partner to our customers is more important now than ever.”
In the new normal, Leahy said that digital transformation, agility and security remain top concerns while return to office is driving collaboration, networking and endpoint solutions.
“What we’re seeing is customers across our commercial segments living within the current environment and making decisions about their back-to-work strategy,” she said. “They’re bolstering their capabilities in offices. They’re bolstering their capability in-home environments because they’re really focused on their co-workers ability to be productive and deliver seamlessly moving from remote to in office.
“We will continue to do what we do best, which is leverage our competitive advantages and out execute the competition,” she added. “We will also continue to invest, to ensure we remain our customers trusted partner who delivers the outcomes they need whether for innovation cost management, agility, risk, mitigate risk mitigation or user experience.”