Gates Industrial Corporation’s first quarter was marked by operational disruptions tied to the rollout of a new enterprise resource planning (ERP) system in Europe, which led to temporary sales and margin pressure. While overall sales were flat year over year and missed Wall Street’s revenue expectations, management attributed much of the variance to the ERP transition and fewer working days. CEO Ivo Jurek noted that “our Europe team successfully implemented a new ERP system” and that the business stabilized by the end of the quarter, though with higher-than-normal operating costs. Management emphasized that demand trends improved as the quarter progressed, particularly in core industrial markets.
Is now the time to buy GTES? Find out in our full research report (it’s free for active Edge members).
Gates Industrial Corporation (GTES) Q1 CY2026 Highlights:
- Revenue: $851.1 million vs analyst estimates of $862.7 million (flat year on year, 1.3% miss)
- Adjusted EPS: $0.35 vs analyst estimates of $0.33 (6.5% beat)
- Adjusted EBITDA: $177.4 million vs analyst estimates of $177.9 million (20.8% margin, in line)
- Management reiterated its full-year Adjusted EPS guidance of $1.60 at the midpoint
- EBITDA guidance for the full year is $805 million at the midpoint, in line with analyst expectations
- Operating Margin: 12.9%, down from 14.7% in the same quarter last year
- Organic Revenue fell 2.9% year on year (miss)
- Market Capitalization: $6.60 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Gates Industrial Corporation’s Q1 Earnings Call
- Michael Halloran (Baird): Asked about confidence in sustaining growth after the ERP transition. CEO Ivo Jurek emphasized recovering lost sales, with order trends supporting the annual outlook.
- David Tarantino (KeyBanc): Inquired about margin headwinds and price/cost dynamics amid rising input costs. CFO Brooks Mallard detailed that most margin pressure was temporary and related to ERP and footprint projects, with confidence in pricing for inflation.
- Nigel Coe (Wolfe Research): Queried the potential for recovering delayed European sales and the industrial OEM recovery. Jurek explained that lost sales were quickly regained in April and highlighted improved trends in heavy industry and construction.
- Andrew Kaplowitz (Citigroup): Asked about Personal Mobility and data center market growth. Jurek reaffirmed strong growth outlooks for both, citing delayed projects ramping up and rapid expansion in data center liquid cooling.
- Jerry Revich (Wells Fargo): Explored aftermarket and replacement demand cadence. Jurek indicated that aftermarket sales were stable, with no signs of unusual demand shifts or forward buying.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the pace at which European operations normalize and backlog is cleared post-ERP transition, (2) the integration and margin uplift from the Timken acquisition, and (3) sustained strength in industrial OEM orders, especially in sectors like construction and data centers. Execution on inflation management and further acquisitions could also influence results.
Gates Industrial Corporation currently trades at $25.99, up from $25.61 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
The Best Stocks for High-Quality Investors
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it's flagging for this month - FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
