Summary
W.W. Grainger, Inc. (GWW) reported a strong second quarter and first half of 2010, demonstrating significant recovery and growth compared to the previous year, which was impacted by the economic downturn. Net sales for the quarter increased by 16.3% year-over-year, reaching $1.78 billion, driven by a combination of increased volume, strategic acquisitions, and favorable foreign exchange rates. This top-line growth translated into a substantial 39.6% increase in operating earnings and a similar increase in net earnings attributable to W.W. Grainger, Inc., reaching $129.1 million ($1.73 per diluted share). The company's performance reflects an improving economic environment, with industrial production showing positive trends. Grainger experienced broad-based sales increases across most customer segments, with notable strength in heavy manufacturing and reseller segments. The company also raised its full-year 2010 sales growth and earnings per share guidance, indicating management's confidence in continued positive momentum. The balance sheet remains solid, with a healthy working capital position and a manageable debt ratio, allowing for continued investment in growth initiatives and shareholder returns.
Financial Highlights
49 data points| Revenue | $1.78B |
| Cost of Revenue | $1.04B |
| Gross Profit | $747.09M |
| SG&A Expenses | $532.17M |
| Operating Income | $214.91M |
| Interest Expense | $2.22M |
| Net Income | $129.08M |
| EPS (Basic) | $1.76 |
| EPS (Diluted) | $1.73 |
| Shares Outstanding (Basic) | 71.69M |
| Shares Outstanding (Diluted) | 72.93M |
Key Highlights
- 1Net sales for the three months ended June 30, 2010, increased by 16.3% to $1.78 billion compared to $1.53 billion in the prior year period.
- 2Operating earnings for the quarter surged by 39.6% to $214.9 million, up from $153.9 million in Q2 2009, demonstrating strong operational leverage.
- 3Diluted earnings per share (EPS) rose to $1.73 for the quarter, a 43.0% increase from $1.21 in the prior year, with management raising full-year EPS guidance.
- 4Gross profit margin improved by 1.1 percentage points to 41.9%, driven by pricing initiatives, lower freight costs, and a favorable comparison to a prior year promotion.
- 5The company raised its full-year 2010 sales growth guidance to a range of 12% to 14% and EPS guidance to $6.10-$6.40.
- 6Net cash provided by operating activities for the six months ended June 30, 2010, increased to $286.3 million from $232.6 million in the prior year, supporting investment and shareholder returns.
- 7The company repurchased approximately 2.3 million shares of common stock during the second quarter for $252.3 million, underscoring its commitment to returning capital to shareholders.