Grainger sales up 2 percent
Grainger reported third quarter sales of $2.6 billion increased 2 percent versus the third quarter of 2016.
On a daily basis, sales increased 3 percent versus the prior year. Net earnings for the quarter of $162 million were down 13 percent versus $186 million in 2016. Earnings per share of $2.79 decreased 9 percent versus $3.05 in 2016.
"Our U.S. business had strong volume in the quarter driven by our strategic pricing initiatives and an improving demand environment. We saw a solid response from digital marketing activities that began in mid-August, particularly from our mid-sized customers. We continued to streamline our portfolio with the divestiture of a noncore U.S. specialty business, which affected sales in the quarter," said chairman and chief executive officer DG Macpherson. "Our single channel online businesses continued their strong sales growth and improved profitability. Our Canadian business continues to be challenged as we execute our turnaround strategy."
Sales in the U.S. segment decreased 1 percent and were up 1 percent on a daily basis versus the third quarter of 2016. The increase was driven by a 7 percentage point increase in volume partially offset by declines of 5 percentage points from price and 1 percentage point from the divestiture of a specialty business.
Operating earnings for the U.S. segment declined 13 percent in the quarter driven by lower gross profit. Gross profit margins for the quarter declined 1.9 percentage points as a result of the strategic pricing initiatives. Operating expenses for the segment were flat in the quarter.
Sales in the Canada segment increased 5 percent and were up 7 percent on a daily basis versus the 2016 third quarter. Daily sales for the Canada segment increased 2 percent in local currency, consisting of volume.
The business in Canada posted a $15 million operating loss in the 2017 third quarter, up 1 percent versus the prior year. The gross profit margin in Canada improved by 0.8 percentage point versus the prior year, primarily due to lower inventory reserve requirements. Operating expenses increased 6 percent in the quarter and included $5 million of restructuring charges related to facility and headcount reductions.
Sales for the Other Businesses increased 11 percent and were up 13 percent on a daily basis for the 2017 third quarter versus the prior year. The increase was driven by 15 percentage points of growth from volume and price, partially offset by a 2 percentage point decline from foreign exchange. Performance for the Other Businesses was driven by 17 percent sales growth for the single channel online businesses and strong sales growth for the business in Mexico.
Operating earnings for the Other Businesses of $27 million in the 2017 third quarter were up 8 percent versus $25 million the prior year. This performance was driven by strong results from Zoro in the United States and MonotaRO in Japan.
The company expects 2017 sales growth of 1.5 to 2.5 percent and earnings per share of $10.40 to $10.90.
INDUSTRIAL SUPPLY MAGAZINE
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