LAKE FOREST, Ill. (AP) — W.W. Grainger Inc. forecast fourth-quarter and 2011 profit Wednesday that fell short of Wall Street's expectations, and said it was closing 25 branches as its industry changes.
Grainger supplies maintenance, repair and other industrial products. Executives, speaking at an analyst meeting, said customer demands have evolved, suppliers are asked to do more and competition has intensified.
The company said it anticipates earning $1.94 to $2.09, excluding one-time charges, in its fourth quarter. It expects sales growth of 12 to 13 percent, which suggests revenue of $2.05 billion to $2.06 billion.
Analysts polled by FactSet were expecting $2.11 per share on revenue of $2.06 billion for the quarter that ends in December.
The company, based in Lake Forest, Ill., expects to close 25 branches before the end of the year, which will incur charges of 12 to 15 cents per share that are excluded from its guidance. The company operates more than 600 branches, 400 of which are in the U.S.
Grainger spokesman Robb Kristopher said 200 people are employed at the affected branches. She said it's already found new positions for 60 percent of those employees and hopes to find more as the closures proceed.
Grainger raised the low end of its forecast for 2011. It expects increased investment will offset stronger sales. The company now expects to earn an adjusted $8.85 to $9 per share versus prior expectations of $8.80 to $9 per share. However, analysts were forecasting $9.02 per share. The company expects its sales will increase 11 to 12 percent for the year, which suggests revenue of $7.97 to $8.04 billion. Analysts have forecast revenue of $8.06 billion.
The company is scheduled to report its fourth-quarter and full-year results in January.
Grainger also said that it expects to earn $9.90 to $10.65 per share for the 2012 fiscal year. Analysts anticipate $10.07 per share.
Shares of the company fell $2.46 to close at $176.84 Wednesday.