Analyst Note| Matthew Young, CFA |
Wide-moat truck broker Landstar posted another quarter of robust gross-revenue growth (up 91%), which came in slightly above our forecast. Easy comparisons are certainly a factor given initial pandemic headwinds a year ago, but underlying dry van demand is facing extraordinarily strong consumer goods spending and related retailer restocking, along with healthy building products shipments. Flatbed business is also growing nicely on improvement in the U.S. industrials sector (including strength in metals and machinery). On top of that, truckload-market capacity remains highly constrained, providing truck brokers with solid pricing power. Overall, total-truckload volumes jumped 39%, while revenue per load surged 38%. The strong backdrop shows few signs of easing, aside from seasonal trends, though comparisons will become tougher in the second half. Management expects third-quarter revenue per load gains in the low-20% range, with volume up in the midteens (year over year).