Rexel provided a third quarter sales update (not a detailed quarterly earnings statement) on October 22, pointing to an electrical distribution market increasingly shaped by electrification, rather than a uniform recovery in construction.

Sales reached $6.33 billion, up 14.6% on a reported basis and 11.4% on a constant, same-day basis – the company’s strongest quarterly growth since 2022. North America led the acceleration, with data centers and industrial automation powering an 18.2% increase in U.S. same-day sales. For the company, volume contributed 6.3 percentage points and pricing contributed 5.1 points to Q3 organic growth

Some key highlights from their press release and presentation:

Rexel Q3 Performance – North America

• Q3 2026 same-day sales increased +17.4%, with sales of €2.35 billion, or about $3.2 billion.
• The North America region represented slightly over half of Rexel’s total revenue.
• North America’s acceleration was mainly volume-driven, with a favorable pricing environment, which is broadly similar to 2Q results.
• Within North America, U.S. same-day sales growth was 18.2% year-over-year, a major acceleration from +7.8% in Q2. U.S. revenue was €2.32 billion in Q3 2026, or about $2.6 billion. And year-to-date for the 9 months of 2026, US sales were €6.08 billion, or about $6.81 billion), with same-day growth of +10.7%.
• Key drivers of US growth included triple-digit growth in data centers, which expanded to about 13% of U.S. sales (about $340 million), about 20% growth in industrial automation which grew 20% and added 3 percentage points to regional growth, and mid-single-digit growth across other non-residential and residential markets, including sectors such as hospitals and aerospace.
• Although management cited positive residential momentum in the aggregate sales discussion, it also said continued weakness in the relatively profitable northwestern U.S. residential business was creating an unfavorable regional profit mix. That is a distinction between overall sales direction and the contribution of a particular geography. And resi growth on a small percentage of the business, especially when resi, nationally, is down … shows that it comes down to which contractors, or builders, you work with.
• For data centers specifically, management noted that rising lead times and concerns about equipment availability are prompting customers to involve distributors earlier in project development. This increases the importance of sourcing, project coordination, technical support, and delivery execution – not simply product availability. The key is sourcing capabilities and jobsite management.
• At group level, pricing contributed 5.1 percentage points to Q3 organic growth with cable products contributing 2.9 percentage points, non-cable products contributed 2.2 percentage points but volume contributing the remaining 6.3 percentage points. This breakdown matters since Rexel’s double-digit growth was not simply a price-inflation story. More than half came from volume. Texier said Rexel generally passes supplier price increases through to customers, with potential delays of two to three months because of project price protection or contractual agreements.

Analyst Q&A of Rexel

• The Q&A also highlighted potential opportunities from more complex electrical architectures, including 800-volt DC and hybrid systems. CEO Guillaume Texier regarded increasing complexity as an opportunity to provide additional services but stressed that widespread implementation remained early rather than an immediate revenue driver.

Overview Observations on Rexel’s Q3 Performance

• Industrial automation is emerging as a growth engine with its 20% growth. There are 3 drivers: Data center-related OEM demand, including cooling equipment; several large industrial orders, including aerospace projects and a broader cyclical improvement in industrial investment, with some capacity expansion and reshoring in the U.S.
• North American backlog exceeded $3 billion, up 42% from year-end 2025, with data centers representing about 25% of the U.S. backlog. This suggests data centers should remain the largest growth contributor into 2027.
• Proximity (local, stock-and-flow) business in the U.S. continues to be “healthy” in the mid-single to low double-digits. This reflects the observation that there is not broad-based construction growth as the growth driver was Rexel’s exposure to AI/data center infrastructure and industrial automation. Residential markets grew modestly. Overall, traditional electrical distribution markets grew in the mid-single-digit range, with growth from project-driven demand, led by AI infrastructure and data centers, outpacing stock-and-flow demand.
• The mix matters because large projects typically carry lower gross margins than local, day-to-day “proximity” business.

Electrical Industry Implications

For the broader distribution industry, this underscores the importance of long-term contractor and OEM relationships in high-growth verticals, early involvement in project design to lock in specs and capture more of the value chain and geographic and vertical diversification to avoid over-reliance on any single cycle. Distributors with shallow project pipelines or heavy exposure to spot-buy, price-sensitive segments may find the remainder of 2026 and 2027 more challenging as tariffs and inflation persist.

Rexel’s Outlook

Rexel raised its 2026 outlook for the second time during the year, citing accelerating U.S. demand, particularly from data centers, and stronger-than-expected growth in North America. Guidance was raised from 5% growth to 7%. This improved outlook implies that management is assuming growth remains positive in Q4, but moderates from the exceptionally strong 11.4% Q3 same-day growth rate. Underlying organic demand, as opposed to acquisitions or pricing expressed as North American backlog exceeding $3 billion, up 42% versus year-end 2025 with data centers representing about 25% of the U.S. backlog, was a primary factor in the revised outlook.

Recent Rexel Acquisitions

Two transactions occurred during the quarter:

• DEE Electronics completed July 10. DEE Electronics is a Cedar Rapids, Iowa-based OEM services specialist with approximately $50 million in sales and more than 200 employees. DEE adds wire harnesses, cable assemblies, printed circuit board assemblies, control panels, custom kitting, sourcing, and logistics capabilities to Rexel USA’s Advanced Services organization.
• GCG agreement was announced September 25 with closing expected by end of 2026. GCG, Rexel’s largest acquisition in more than 15 years, is a Chicago-based specialty wire, cable, connectivity, power, and engineered-solutions platform. Their expected 2026 revenue exceeds $1.1 billion, and they have about 950 employees across 16 locations. Enterprise value is about $1.4 billion.
• The transaction is strategically significant because more than 75% of GCG’s revenue incorporates value-added products or services, while more than 60% is exposed to high-growth markets such as data centers, power infrastructure, grid modernization, communications, and defense. GCG’s expected 2026 EBITA margin is approximately 11%, making it attractive for both growth and group-margin enhancement. Rexel completed a €500 million capital increase in September to support the financing.

CMG Observations

Rexel’s quarter provides a positive signal for electrical distribution, but not evidence that every distributor or product category is enjoying the same conditions.

• Growth is increasingly determined by end-market exposure. Data centers, automation, utilities, and energy-transition applications are materially stronger than many conventional construction markets. Rexel’s performance should not be extrapolated directly to distributors more dependent on housing or general commercial activity.
• Data center demand reaches well beyond the jobsite. Cooling OEMs, controls suppliers, utility equipment, switchgear, busbar, and cable all participate in the investment cycle. This broadens the commercial opportunity while making end-market classification less clear-cut.
• Availability and coordination are becoming competitive advantages. Earlier customer engagement gives distributors opportunities to influence specifications and provide project services, but it also raises execution demands and extends planning horizons.
• Revenue inflation is not equivalent to margin expansion. Supplier price increases support sales, yet commissions, wages, benefits, competitive behavior, and lower-gross-margin project mix can absorb part of the benefit.
• Consolidation is increasingly about capabilities. DEE and GCG illustrate an acquisition strategy focused on technical expertise, engineered solutions, OEM relationships, and advanced services—not merely adding branches or purchasing volume.

For manufacturers and distributors, the most consequential message is that the competitive battleground is shifting toward the ability to solve complex infrastructure and production problems. Rexel’s strong backlog and higher outlook show the demand opportunity; its margin commentary shows why capturing that opportunity profitably requires more than shipping additional product.

Rexel’s results also reveal a nuanced industry picture: large-project demand is strong, pricing remains supportive, and backlog provides visibility into 2027, but operating-cost inflation and business mix constrain how quickly revenue growth translates into higher margins. Rexel’s response is to move further into technical services and specialized infrastructure distribution, reinforced by the acquisition of DEE Electronics and its pending purchase of GCG.