Generac sees Q2 overall net sales to be ‘nearly flat’ compared to prior year

Generac said: “Specifically for the second quarter, we expect overall net sales to be nearly flat as compared to the prior year period, with growth rates anticipated to accelerate in the second half of the year. Importantly, this guidance assumes a level of power outage activity during the remainder of the year that is in line with the longer-term baseline average. Consistent with our historical approach, this outlook does not assume the benefit of a major power outage event which could add $50 million to $100 million in additional shipments during the year. Our gross margin expectations for the full year 2024 are now modestly higher than previous guidance given the Q1 outperformance. We now expect gross margins to improve by approximately 300 to 350 basis points over the full year 2023, an increase from the 300 basis point improvement previously expected. Gross margins are projected to increase sequentially throughout the year with second half 2024 gross margins now growing by approximately 200 basis points over the first half 2024 gross margins, given favorable mix, price and cost impacts. Adjusted EBITDA margins before deducting for noncontrolling interests are still expected to be approximately 16.5% to 17.5% for the full year. This guidance assumes that the better-than-expected gross margins previously discussed will be mostly offset by modestly higher-than-expected operating expenses to help support enterprise-wide strategic initiatives.”