Descartes sees February as cycle low point

Fiscal 1st quarter comes in ahead of consensus

"The volumes on our network continue to be strong, so we’re happy about that,” CEO Ed Ryan told analysts on a Wednesday evening call. (Photo: Jim Allen/FreightWaves)

Supply chain software-as-a-service provider Descartes said Wednesday that February was likely the low point for the cycle, noting demand trended up somewhat in March and April.

The company has seen ocean imports increase sequentially since February to a level that is in line with pre-pandemic levels as retailers have made progress selling through excess inventories. It also noted that China-originated orders increased in April but that it’s still too early to say if this is indicative of a new trend line.

“If I use April as an example, I’m optimistic about what we see in May,” CEO Ed Ryan told analysts on a Wednesday evening call. Ryan tempered the remarks somewhat, noting it’s still a “mixed-news economy at the moment.”

The Canada-based company reported earnings per share of 34 cents for the 2024 fiscal first quarter ended April 30 after the market closed, 7 cents higher year over year (y/y) and a penny ahead of the consensus estimate.

Descartes (NASDAQ: DSGX) reported revenue of $137 million, 17% higher y/y and better than management’s guidance of $117 million. Two acquisitions in the period partially contributed to the growth. A strong U.S. dollar resulted in a $2 million revenue headwind in the quarter.

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    One Comment

    1. G

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    Todd Maiden

    Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.