Description

Gates Industrial’s Europe Comeback: Can ERP Recovery Reignite Growth?

Gates Industrial Corporation reported first quarter 2026 results characterized by operational challenges related primarily to the recent implementation of a new enterprise resource planning (ERP) system in its European operations and the impact of two fewer working days compared to the prior year. These factors contributed to a reported core sales decline of 2.9% for the quarter, with European core sales falling approximately 8.5% year-over-year largely due to distribution inefficiencies and backlog buildup during the ERP transition. However, management indicated that March sales trends improved with core sales growth in March rising to mid-single digits and a book-to-bill ratio above 1. The company anticipates full recovery of sales deferred in Q1 during the second quarter, expecting European operations to stabilize further. Total first quarter sales amounted to $851 million, with adjusted EBITDA of $177 million and a margin of 20.8%, down 130 basis points year-over-year.