Grainger Posts $16.5B in 2023 Sales; Q4 Sales Up 5%

W.W. Grainger on Friday reported sales of $16.5 billion last year, an increase of more than 8% over 2022 and a new record for annual revenue.

The suburban Chicago MRO giant — long the no. 1 distributor on ID’s Big 50 list — wrapped up the year with nearly $4 billion in sales in the fourth quarter, up more than 5% compared to the previous October-December window. That total, however, reportedly fell short of expectations for the quarter on Wall Street, even as its earnings bested analysts’ forecasts.

Grainger officials praised the company’s “focused execution” amid a “normalizing” demand market.

The company’s full-year net earnings of $1.8 billion were up more than 18% — also a record — while diluted earnings per share jumped by 20.5% to $36.23. Gross profit climbed by just over 11% to just shy of $6.5 billion, and its operating margin was up 110 basis points over 2022.

For the fourth quarter, net earnings were up nearly 3%, gross profit increased by 3.8%, and diluted earnings per share rose by 4.7% year-over-year. The company’s gross profit margin and operating margin, however, were down by 50 and 40 basis points, respectively, in the quarter.

Grainger officials said both its High-Touch Solutions N.A. segment, which serves the company’s larger customers, and its Endless Assortment business, targeting smaller customers through online channels Zoro and MonotaRO, contributed to the drop in gross margin. High-Touch saw a negative price-cost spread and year-end adjustments in inventory costs, while Endless Assortment weathered an “unfavorable product mix” at Zoro. Volume growth in the High-Touch segment and strong performance among business-to-business customers in Endless Assortment fueled sales increases in both divisions.

The company’s debut forecast for 2024 anticipates sales growth between 4.3% and 7.3%, which would translate to $17.2 billion to $17.7 billion in annual sales. Gross margin and operating margin are projected to range between 39.1% to 39.4% and 15.3% to 15.8%, respectively, for the year.

"As we look to 2024, we remain dedicated to delivering tangible value for customers, strong results for shareholders, and an engaging culture for team members,” Grainger Chairman and CEO D.G. Macpherson said in a statement.