Anixter Security Revenue Declines

Last quarter, we reviewed how Anixter's security business was struggling. Now, new financial results and management disclosures show that things have gotten even worse, driven by one geographic region in particular.

For Q2 2014 [link no longer available], Anixter security revenue actually shrank 2% year over year.

North America, Anixter's home market, drove the poor results, with Anixter emphasizing that they are "experiencing very good growth in the other geographies in our security program," which for their standards typically means in the 10 - 20% range. However, North America is Anixter's most mature market and likely largest. If other regions are growing well, this implies that North America is down 5% or even 10% year over year.

Anixter's North America struggles are not alone. Axis growth continues to decelerate in North America as well (see Axis Q2 2014 results).

However, Anixter says brighter days are ahead:

"[Anixter] had made a senior level management change to help us get that business back on track. That change became effective in May. The person was transitioning some other responsibilities as he transitioned into this role. We then started some pretty specific tactical execution activity. And what we saw in late May and in June was an increase in the bookings in security on a daily basis, so per billing day in the month, year-over-year."

Though growth rates may be declining overall, Anixter should be able to at least keep revenue flat, if not grow in security. It is not that dire.

However, it is bad for Anixter now, especially in North America. Maybe they can find some more end users to sell to.