Grainger’s 2Q sales rise 10 percent
Industrial Distribution staff -- Industrial Distribution, 7/14/2008 7:57:00 AM
W.W. Grainger Inc. posted second-quarter sales of $1.76 billion, up 9.7 percent compared with $1.6 billion during the same period last year.Net earnings for the Lake Forest, Ill.-based broad-line MRO distributor rose 8 percent to $113.2 million, compared with $104.8 million during the second quarter of 2007.
“We are very pleased with the 10 percent sales growth in the quarter,” president and CEO James Ryan said. “We are making market share gains in a slowing economy.”
Grainger said its branch-based segment in the United States, Mexico and China rose 9 percent during the quarter, with its market expansion program contributing 6 percent to that increase. The company opened six new branches in the United States during the period, closing three, and opened four locations in Mexico.
Sales in Mexico rose 25 percent compared with the second quarter of last year. The company said it plans to open four more locations there during the second half of 2008. In China, sales of more than $2 million almost doubled first-quarter revenues.
Product-line expansion also played a role in the company’s growth during the quarter; Grainger has added more than 35,000 products to its catalog this year.
North of the border, the Acklands-Grainger Canada division posted a 24 percent surge in revenues, compared with the second quarter of 2007, on strong sales to mining, oil and government customers. Acklands added one branch as part of its Excel Industriel acquisition and closed another.
Sales for Grainger’s Lab Safety Supply division were flat compared with the same period last year.
Grainger said the results include a roughly $3.8 million charge ($0.05 per share) related to allegations that it violated federal trade acts.
Grainger is accused of gouging the federal General Services Administration (GSA) by routinely charging more than the 26 percent markup called for in its contract with the agency and of selling private-labeled products from countries such as China and Taiwan, in violation of the federal Buy American and Trade Agreements acts.
“Discussions with the Department of Justice relating to the company's compliance with disclosure obligations under the GSA contract and the contract's pricing provisions are ongoing,” the company said in a statement.
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