Retail Restocking Pullback Evident in J.B. Hunt's Q4 Volume Performance

Narrow-moat J.B. Hunt’s year-over-year top-line growth moderated to 4% in the quarter (it fell 3% excluding fuel). The general theme is that retail sector inventory restocking has retrenched and is now pressuring freight volumes across most segments. This dynamic was only partly offset by lingering contract pricing tailwinds for intermodal and additional revenue producing trucks for the dedicated segment, or DCS. We've been expecting a demand slowdown, though Hunt's total revenue came in slightly shy of our forecast on lower-than-expected intermodal volumes and a significant decline in truck brokerage, or ICS, gross revenue.