Alta Equipment sales, rentals fall in Q3

Alta Equipment Group’s equipment sales and rental revenues decreased in the third quarter, as buyers awaited clarity on equipment market conditions following months of uncertainty.  

Alta Equipment’s performance improved through the end of the third quarter despite tariff and manufacturing headwinds, and October was emerging as its strongest month of the year, with construction equipment sales topping $75 million, nearly 60% of total Q3 equipment sales, Chief Executive Ryan Greenawalt said during Alta’s Nov. 6 earnings call. 

“We believe the pattern witnessed in the third quarter reflected a shift, rather than an indication of softness, as customers seemingly elected to push purchases from Q3 into Q4,” he said. “As [customers] awaited more definite signals on interest rate direction and yearend tax benefits under the One Big, Beautiful Bill Act, that timing dynamic, coupled with greater confidence in backlogs and financing, sets the stage for what we believe is the beginning of a fleet replenishment cycle.” 

Still, Alta Equipment’s construction equipment sales fell in Q3, reflecting the segment’s historical volatility and sensitivity to macroeconomic factors such as interest rates, tariffs, elections and local funding conditions, Chief Financial Officer Tony Colucci said during the call.  

“Based on what we saw in October, we believe Q3 will be an anomaly as customers pushed ahead decisioning into Q4, given the expectations for interest rate reductions and yearend tax planning,” he said. “While we continue to run below historic level gross margins on new and used equipment, gross margins on new and used equipment were up slightly on a consequential basis, a hopeful sign that supply and demand dynamics in the marketplace are normalizing and that we may have found a bottom.” 

By the numbers 

Livonia, Mich.-based Alta Equipment reported in Q3:  

• Total revenue fell 5.8% YoY to $422.6 million;  

• Total new and used equipment sales dropped 4% YoY to $211.1 million; 

• Total rental revenue declined 9.9% YoY to $48.4 million; 

• Total rental equipment sales plummeted 39% YoY to $21.4 million;  

• Material handling segment revenue landed at $167.9 million, down 0.6% YoY;  

• Material handling new and used equipment sales were $85.6 million, down 1.8% YoY;  

• Material handling rental revenue totaled $18.1 million, down 6.2% YoY;  

• Construction segment revenue fell to $241.6 million, down 7.9% YoY;  

• New and used construction equipment sales slipped to $115.2 million, down 2.4% YoY; 

• Construction rental revenue declined to $30.1 million, down 11.5% YoY; 

• Master distribution revenue was $15 million, down 17.6% YoY;  

• Master distribution new and used sales dropped to $12 million, down 21.6% YoY;  

• Floorplan payables for new equipment landed at $270.8 million, down 12.4% YoY; and  

• Floorplan payables for used and rental equipment plummeted 20% YoY to $69.4 million.  

Noteworthy 

Meanwhile, Alta Equipment’s material handling backlog declined to the low $100 million range from $125 million at the start of the year , as used and allied lift truck lines remain strong and tariffs have created new pricing opportunities for preowned equipment, Colucci said. 

“The burn-off is for us, less about demand, which has been tepid, and more about lead times from the factory coming down in terms of being able to deliver more quickly, given their production level,” he said. “The backlog is not down necessarily at Alta, because of a massive decrease, although it’s down, but more so just the lead times impacting us.” 

MARKET REACTION: Shares of Alta Equipment Group [NYSE: ALTG] were down 10.7% from market open to $5.26 as of market close today. It has a market capitalization of $176.6 million.  

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