Gates Industrial Corporation Reports Decline in Net Sales and Profitability for Q2 2025

Gates Industrial Corporation plc reported its financial results for the second quarter of 2025, revealing a slight decline in net sales and profitability compared to the same period last year. For the three months ended June 28, 2025, the company recorded net sales of $883.7 million, a decrease of 0.2% from $885.5 million in the prior year. Gross profit for the quarter increased to $360.2 million, up from $357.4 million, while net income attributable to shareholders fell to $56.5 million, down from $70.7 million. The diluted earnings per share for the quarter was $0.22, compared to $0.26 in the same period last year.

In the first half of 2025, Gates reported net sales of $1.731 billion, down 1.0% from $1.748 billion in the previous year. The decline in sales was attributed to a combination of lower volumes and adverse currency translation effects, although pricing adjustments contributed positively. The company’s gross profit for the six-month period rose to $704.8 million from $687.4 million, while net income increased to $132.0 million from $124.1 million. The effective tax rate for the first half of 2025 was 24.1%, down from 27.4% in the prior year.

Operationally, Gates has been focusing on restructuring initiatives aimed at enhancing productivity and reducing costs. The company incurred restructuring expenses of $13.0 million in the second quarter, significantly higher than the $1.6 million recorded in the same quarter last year. These efforts are part of a broader strategy to consolidate manufacturing and distribution operations and optimize the supply chain. The company also reported a notable increase in cash flow from operating activities, which rose to $110.3 million for the first half of 2025, compared to $72.8 million in the prior year.

Gates continues to expand its geographic footprint and product offerings, with a focus on the personal mobility and data center markets, which are expected to drive long-term growth. The company’s Power Transmission segment saw a slight increase in sales, while the Fluid Power segment experienced a decline, primarily due to lower volumes in industrial channels. The company remains committed to managing its operations amid economic uncertainties and is actively monitoring market conditions, including the impacts of global trade tensions and inflationary pressures.

Looking ahead, Gates anticipates continued challenges in the market but remains optimistic about its strategic initiatives and product development efforts. The company is focused on maintaining its strong brand reputation and leveraging its diverse product portfolio to capture growth opportunities across various end markets.