CDW Drops After Issuing Q1 Revenue Warning
CDW Corp (CDW:US) shares tumbled around 13% on Wednesday after the IT equipment supplier warned it expects lower-than-expected revenue for its first quarter.
CDW expects its Q1 sales will be about $5.1 billion, missing the $5.57 billion consensus. As a result, the company sees the U.S. IT market falling “at a high single-digit rate in 2023.”
“The first quarter was marked by a period of intensifying economic uncertainty that led our customers to spend more cautiously,” CEO Christine Leahy said in a press release. "This demand contraction resulted in first-quarter performance below our expectations.”
The CEO added that “volume declines were most acute with our largest commercial customers,” prompting the company to now expect full-year adjusted EPS to be “modestly” below FY 2022 results.
On a more positive note, the company reaffirmed its full-year outlook for net sales, which are still expected to grow 200-300 basis points in constant currency. CDW also said it will review its cost spending structure and align it “with the level of anticipated demand.”
The drop in CDW stock price came after several Congress members reported the sale of CDW shares in recent months. Most notably, Rep. Michael McCaul disclosed in October two transactions involving the sale of CDW shares a month earlier.
Both transactions were valued at $100,000 - $250,000 and took place on September 02, when the stock closed at $168.50.
Similarly, Congress members Ro Khanna, Susie Lee, and most recently Diana Harshbarger, reported the sale of CDW shares as demand trends continue to worsen amid renewed and elevated macro concerns.
This week’s selloff in CDW stock has pushed it into the red territory year-to-date.
