Brady Corporation Reports 10.6% Net Sales Increase in Q2 Fiscal 2025

Brady Corporation reported its financial results for the second quarter of fiscal 2025, revealing a net sales increase of 10.6% to $356.7 million compared to $322.6 million in the same period last year. For the six months ended January 31, 2025, net sales rose 12.1% to $733.7 million from $654.6 million. The growth was attributed to a combination of organic sales growth of 2.6% and a significant contribution from acquisitions, which accounted for 10.2% of the increase. However, foreign currency translation negatively impacted sales by 2.2% in the quarter. The company’s gross margin for the quarter was $175.8 million, representing 49.3% of net sales, a decrease from 50.2% in the prior year, primarily due to facility closure costs and increased costs of goods sold related to acquisitions.

In terms of profitability, Brady's operating income for the three months ended January 31, 2025, was $51.2 million, down 5.0% from $53.9 million in the same quarter last year. The decline in operating income was attributed to non-recurring acquisition-related costs and reorganization expenses. Net income for the quarter was $40.3 million, or $0.84 per share, compared to $43.6 million, or $0.90 per share, in the prior year. For the six-month period, net income totaled $87.1 million, down from $90.9 million in the previous year.

Brady Corporation has made significant strategic moves, including the acquisition of Gravotech Holding and American Barcode and RFID Incorporated (AB&R) during the fiscal year. The Gravotech acquisition, completed on August 1, 2024, added $56.9 million in net sales but also incurred a net loss of $8.3 million due to increased costs associated with the acquisition. The AB&R acquisition, finalized on October 1, 2024, is expected to enhance Brady's capabilities in asset tracking and inventory management. These acquisitions are part of Brady's strategy to expand its product offerings and market presence.

Operationally, Brady's Americas & Asia segment reported a 10.5% increase in net sales for the quarter, driven by organic growth of 4.3% and acquisition contributions. In contrast, the Europe & Australia segment saw a 10.7% increase in net sales, primarily from acquisitions, although organic sales declined slightly. The company’s total employee headcount has increased as a result of these acquisitions, reflecting its commitment to integrating new businesses and enhancing operational capabilities.

Looking ahead, Brady Corporation remains focused on leveraging its acquisitions to drive growth while navigating challenges such as inflation and supply chain disruptions. The company plans to invest in research and development to foster innovation and improve customer service. With cash and cash equivalents of $138.5 million and a robust credit agreement providing additional liquidity, Brady is well-positioned to support its growth initiatives and manage potential economic uncertainties.