Mayank Bansal, CFA
Mayank Bansal is a CFA Charterholder and heads the Equity Research team at Kapitales Research, with over 5 years of experience analysing global equity markets. He leads fundamental, data-driven research combining rigorous financial analysis with macro trends.
Reece Lifts First-Quarter Sales as Australia and New Zealand Outpace the United States
Highlights
Introduction
On Friday, Reece Limited (ASX: REH) gave shareholders a sales update covering the opening quarter of FY27. The plumbing, waterworks and HVAC-R distributor reported higher sales in both of its regions.
Growth in Australia and New Zealand was more than double the US rate. The announcement contained no profit or margin figures for the quarter.
Group Sales Rise 4.3%
Group sales for the quarter reached A$2,510 million, a 4.3% lift on the same three months last year.
Measured in constant currency, the rise was 8.7%. The company explained that this measure applies the average AUD/USD exchange rate from the first quarter of FY26 to current sales, which removes the effect of currency movements from the comparison.
Reece noted that the quarterly figures come from unaudited Group accounting records.
Australia and New Zealand Lead the Way
Sales across Australia and New Zealand were 12.8% higher. Reece attributed the result to ongoing volume momentum, with inflation adding a mid single-digit share of the growth. Management described the ANZ quarter as strong. According to the update, an existing pipeline of activity kept the region moving forward.
The company also expects the first half to be strong for ANZ. The update did not split the regional result between Australia and New Zealand.
US Growth Comes From New Branches
In the US, sales grew 5.6%. Reece put this down to expansion of its branch network and low single-digit inflation. It did not say how many branches were added during the quarter. On a like-for-like basis, US sales were up 2.4%. That is a slower pace than the 5.6% figure for the region as a whole.
The company described US conditions as soft. It said the residential new construction market remains subdued and is still affecting the business, and it expects difficult conditions there to continue.
Long-Term Plan and a Cautious Second Half
Despite the weaker US backdrop, Reece said it is taking a long-term view. Management pointed to a clear plan for reaching its 2030 vision and building a successful US operation. The trading update did not set out the details of that plan.
The group was more guarded on the months ahead. It said it remains cautious about the back half of FY27, pointing to what it described as a complex macroeconomic environment. The update gave no numerical sales or earnings guidance for either half.
Company Background
Reece distributes plumbing, waterworks and HVAC-R supplies to residential and commercial buyers. Its network spans roughly 1,000 branches in the US, Australia and New Zealand. Founded in 1920, the group has around 9,000 employees. The trading update was authorised for release by the company secretary, as directed by the board.
How the Shares Traded
Reece shares were trading at AU$17.10 on Friday morning, up 8.5%. About 347,000 shares had changed hands by then. The trading update was flagged as price sensitive on the ASX.
What Investors Should Watch
Conclusion
Reece's first quarter showed two regions moving at different speeds. Australia and New Zealand grew sales by 12.8%, while the US relied on network expansion to post 5.6% growth. The company expects ANZ to have a strong first half and continued difficulty in the US, while it remains guarded about the six months that follow.
Note- All data presented is based on information available at the time of writing.
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