Retail Restocking Pullback Hits Hub Group's Q4 Intermodal Volumes, but Profitability Healthy

Narrow-moat-rated Hub Group delivered year-over-year top-line growth of 2% in the fourth quarter. We’ve been expecting a continued deceleration in Hub’s top line, though sales came in modestly below our forecast due to a greater-than-expected falloff in truck brokerage segment sell-rates. Hub’s fourth-quarter results and outlook were consistent with the broader theme that retail sector inventory restocking has retrenched, pressuring freight volumes across the trucking and logistics sectors. This was partly offset by lingering intermodal contract pricing tailwinds.