Grainger Posts Higher Sales, Flat Earnings

The MRO giant also reduced its sales forecast for the full year.

Screenshot 2024 08 01 At 9 22 27 Am
iStock.com/jetcityimage

W.W. Grainger on Thursday reported higher sales and profit totals in its latest fiscal quarter but flat earnings and profit margins, prompting the Chicago-based MRO giant to reduce its revenue forecast heading into the second half of the year.

The company — long the top distributor on ID’s Big 50 listposted $4.3 billion in net sales between April and June, up 3.1% from the nearly $4.2 billion during the same window of 2023. Officials said adjusted sales rose by more than 5% after factoring in foreign currency exchanges and the sale of the E&R Industrial Sales business.

Gross profit was also up 3% to nearly $1.7 billion over that span, but the company’s operating earnings of $649 million were down 1.8% year-over-year, which translated to a 70 basis-point drop in operating margin to 15.1%.

Net earnings attributable to Grainger were flat at $470 million, as was the company’s gross profit margin of 39.3%.

“Amidst the backdrop of a slow but generally stable demand environment, we focused on what matters and produced another quarter of solid results," Grainger Chairman and CEO D.G. Macpherson said in a statement.

Most read on Industrial Distribution:

Sales increased by 3.1% on a daily average basis in the company’s High-Touch Solutions segment, which comprises Grainger’s larger customers, and by 3.3% in the Endless Assortment division, which tends to include smaller customers along with online sellers Zoro and MonotaRO. Gross margin was flat in High-Touch Solutions but down in Endless Assortment amid “product and customer mix headwinds.”

Grainger officials characterized the changes in its full-year projections as mostly “narrowing” its guidance ranges, but the company reduced its annual sales forecast from late April’s $17.2 billion to $17.7 billion down to $17 billion to $17.3 billion. The latter would translate to annual sales growth of between 3.2% and 5.2%.

Click here to subscribe to the Today in Industrial Distribution newsletter.

More in Earnings