W.W. GRAINGER, INC. Quarterly Report for Q1 Ended Mar 31, 2014

Summary

W.W. Grainger, Inc. (GWW) reported solid first-quarter 2014 results, demonstrating continued top-line growth and profitability. Net sales increased by 4.6% to $2.39 billion, driven primarily by volume and strategic business acquisitions, with the United States segment showing particularly strong performance. The company's diluted earnings per share (EPS) rose by 4.3% to $3.07, reflecting both increased earnings and a reduction in weighted average shares outstanding. While the overall results were positive, there were some regional variations. The Canadian segment experienced a sales decline of 10% due to unfavorable economic conditions and foreign exchange impacts, though this was partially offset by growth in 'Other Businesses.' Management reiterated its full-year guidance for sales growth between 5% and 9% and EPS between $12.10 and $12.85, indicating confidence in continued performance despite some macroeconomic headwinds.

Key Highlights

• 1Net sales increased 4.6% to $2.39 billion, driven by volume and acquisitions.
• 2Diluted EPS grew 4.3% to $3.07, benefiting from higher earnings and fewer outstanding shares.
• 3The United States segment reported a 7% increase in net sales, outpacing overall company growth.
• 4The Canadian segment saw a 10% decrease in net sales, negatively impacted by foreign exchange and sector-specific weakness.
• 5Gross profit margin slightly decreased by 0.1 percentage point due to acquisition impacts and customer mix.
• 6Operating earnings increased by 3.2%, reflecting higher sales partially offset by margin pressure and increased operating expenses.
• 7The company reiterated its full-year 2014 guidance for sales growth (5-9%) and EPS ($12.10-$12.85).

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