Grainger Sales Rise, but Earnings, Margins Slip Amid ‘Slow,’ ‘Steady’ Demand

Grainger on Thursday reported stronger sales in the first quarter of 2024, but its earnings and profit margins slid year-over-year.

The MRO distribution giant — long the top company on ID’s Big 50 — posted net sales of $4.2 billion between January and March, up from just shy of $4.1 billion in the same period of 2023. Gross profit also increased by more than 2% over that span.

Operating earnings, however, were down 1.6% year-over-year, while net earnings attributable to Grainger fell by 2%. Gross profit margin and operating margin were down by 50 basis points and 80 basis points, respectively.

Diluted earnings per share edged up 0.1%.

Grainger officials characterized the results as “solid” amid a “slow, but steady demand environment.” The company reaffirmed its initial forecast of 4.3% to 7.3% sales growth for the full year, and noted that first-quarter organic sales were up by nearly 5% on a daily average basis.

The sale of the company’s E&R Industrial Sales subsidiary, along with the impact of foreign currency exchange, dented its overall sales number.

"Looking to the remainder of the year, we are well-positioned to achieve our guidance outlook as we work to provide a flawless experience and deliver tangible value for our customers,” Grainger Chairman and CEO D.G. Macpherson said in a statement.

The company’s High-Touch Solutions division, which primarily serves larger customers, saw growth across “all geographies” and an overall increase of 3.4% in sales on a daily average basis. The Endless Assortment business, which includes its Zoro and MonotaRO e-commerce operations and focuses on smaller customers, posted a daily average increase in sales of 3.7%. Strong sales from core Zoro customers and enterprise MonotaRO customers helped offset a non-core decline at Zoro.

The first-quarter report followed the company’s annual shareholders meeting at its suburban Chicago headquarters. Shareholders approved 13 members of the company’s board — including Macpherson — as well as authorized an independent auditor for 2024 and a resolution on “say on pay” for executive compensation.