Agrium (AGU) primarily earns revenue from two segments: its retail segment and its wholesale segment. Between these two segments, the retail segment contributes significantly to the company’s sales. In 1Q17 alone, the retail segment contributed more than 80% to the company’s overall sales. It’s this segment that’s expected to bring synergistic benefits to PotashCorp (POT) when the two companies merge. Mosaic (MOS) and Intrepid Potash (IPI) lack such a retail network in the US (SOIL).
Overall, Agrium reported sales of $2,270 million, a slight year-over-year decline from $2,275 million a year ago. While the company’s sales were almost flat in 1Q17, they were much better than the year-over-year sales decline of 5% in 1Q16.
The retail segment’s sales fell about 2.2% year-over-year to $2,240 million from $2,290 million. In contrast, the wholesale segment sales rose 1.2% year-over-year to $657 million from $649 million. The company reports a small portion of its sales in the Other segment, which reported sales of -$195 million compared to -$214 million a year ago.
Why sales rose
According to the company, sales for the wholesale segment got a boost from shipment volumes. The company also saw a 2% increase in its proprietary product sales during the quarter. We’ll discuss shipment volumes in more detail in the next article.