Commercial truck dealer Rush Enterprises’ aftermarket products and services revenue jumped in 2023 in tandem with rising truck sales and an increase in lease and rental revenue.
Aftermarket revenue jumped 8.3% year over year to $2.6 billion, according to the company’s earnings release. The addition of 217 service technicians helped drive the increase, specifically in “contract maintenance and mobile service offerings,” Rush Enterprises Chairman, Chief Executive and President W.M. “Rusty” Rush said on the company’s earnings call today.
Aftermarket revenue made up 59.5% of the company’s gross profits in 2023, according to the earnings release.
Meanwhile, leasing and rental revenue increased 9.8% to $353.8 million, largely because of an increase in lease demand due to the limited availability of new commercial vehicles, Rush said.
Commercial truck sales, by the numbers:
- New Class 8 truck sales in 2023 increased 4% YoY to 17,427 units;
- New Class 4 to Class 7 medium-duty truck sales surged 20.3% when compared with 2022 to 13,264 units;
- Used-truck sales dipped 0.6% YoY to 7,117 units;
- On a dollar basis, total new and used commercial truck sales hit $5 billion, up 13.6% YoY; and
- Order backlog dropped 11.4% YoY to $3.7 billion.
Pent-up demand and an increase in shipments from manufacturers helped offset high interest rates and depressed freight volumes that are pressuring the dealer’s customer base, Rush said.
Looking ahead, Rush expects “the market demand in the first half of 2024 will be similar to the second half of 2023. However, we are cautiously optimistic that the current freight recession may begin to ease in summer.”
Rush Truck Centers has 150 locations in 23 states and Ontario, Canada, including 125 franchised dealership locations, representing truck and bus manufacturers, including Peterbilt, International, Hino, Isuzu, Ford, Dennis Eagle, IC Bus and Blue Bird.
Shares of Rush Enterprises, Inc. [NASDAQ: RUSHA & RUSHB] were trading at $47.07 at market close Tuesday, up 1.71% or $.79 from market open. The company has a market cap of $3.7 billion.
Registration is now open for Equipment Finance Connect, the nation’s only dealer-centric equipment lending and leasing event, which will take place May 5-7 in Nashville. Learn about the event and free dealer registration at EquipmentFinanceConnect.com.
