01—Abstract
Summary
Summary of the 10-Q filed August 1, 2024. Cited figures are marked; the original filing is the authoritative source.
W.W.
Grainger, Inc. (GWW) reported steady financial performance for the quarter ended June 30, 2024, with net sales increasing by 3.1% to $4.31 billiona, and net earnings attributable to W.W. Grainger, Inc. remaining flat at $470 million compared to the prior year period. While overall net earnings were stable, diluted earnings per share saw a modest increase of 2.5% to $9.51, reflecting a lower share count due to share repurchases.
The company's core "High-Touch Solutions N.A." segment demonstrated resilience with a 3.1%b sales increase, while the "Endless Assortment" segment also posted a 3.3% sales gain. The company continues to focus on strategic priorities, managing through macroeconomic volatility by leveraging its diverse customer base and the essential nature of its MRO products. Financially, GWW generated robust operating cash flow, up significantly year-over-year, which supported increased investments in share repurchases and dividends.
The company maintained a strong liquidity position with ample available liquidity and investment-grade credit ratings. Despite some pressure on SG&A expenses and a slight decrease in operating earnings for the quarter, the company's gross profit margin remained stable, indicating effective cost management. Management remains confident in the company's ability to navigate economic uncertainties and meet its financial obligations.
02—Key points
Key Highlights
- Net sales for the three months ended June 30, 2024, increased by 3.1% year-over-year to $4.31 billion, driven by both the High-Touch Solutions N.A. and Endless Assortment segments.
- Net earnings attributable to W.W. Grainger, Inc. remained flat at $470 million for the quarter, while diluted earnings per share saw a 2.5% increase to $9.51, benefiting from a reduced share count.
- Gross profit margin was stable at 39.3% for the three months ended June 30, 2024, indicating consistent pricing and cost management.
- Selling, general, and administrative (SG&A) expenses increased by 6.3% to $1.05 billion, impacting operating earnings which decreased by 1.8% to $649 million for the quarter.
- Net cash provided by operating activities increased significantly to $1.07 billion for the six months ended June 30, 2024, up from $904 million in the prior year period.
- The company repurchased shares and paid dividends, utilizing $763 million in financing activities for the six months ended June 30, 2024, primarily driven by higher treasury stock purchases.
- W.W. Grainger, Inc. maintained strong liquidity with $769 million in cash and cash equivalents and approximately $2.0 billion in available liquidity as of June 30, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, W.W. Grainger kept $0.11.
- Revenue$4.31B100.0%
- Cost of revenue−$2.62B60.7%
- Gross profit$1.69B39.3%
- Operating costs−$1.04B24.2%
- Operating income$649.0M15.1%
- Interest, other & tax−$179.0M4.2%
- Net income$470.0M10.9%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 1, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $4.31B$4.18B | +3.1% |
| Cost of Revenue | $2.62B$2.54B | +3.2% |
| Gross Profit | $1.69B$1.64B | +3.0% |
| SG&A Expenses | $1.04B$983.00M | +6.3% |
| Operating Income | $649.00M$661.00M | −1.8% |
| Net Income | $470.00M$470.00M | 0.0% |
| EPS (Basic) | $9.54$9.32 | +2.4% |
| EPS (Diluted) | $9.51$9.28 | +2.5% |
| Shares Outstanding (Basic) | 49.00M50.10M | −2.2% |
| Shares Outstanding (Diluted) | 49.20M50.30M | −2.2% |
05—Questions
Frequently Asked Questions
How did W.W. Grainger's revenue perform in the second quarter of 2024 compared to the prior year?
W.W. Grainger's net sales increased by 3.1% to $4.31 billion for the three months ended June 30, 2024, compared to $4.18 billion in the same period of 2023. This growth was observed across both its "High-Touch Solutions N.A." and "Endless Assortment" segments.
What was the company's profitability for the quarter, and how did earnings per share trend?
Net earnings attributable to W.W. Grainger, Inc. were $470 million for the quarter ended June 30, 2024, unchanged from the prior year. However, diluted earnings per share rose by 2.5% to $9.51, reflecting a decrease in the weighted average number of shares outstanding.
How did operating expenses impact the company's earnings?
Selling, general, and administrative (SG&A) expenses increased by 6.3% to $1.05 billion in the second quarter of 2024. This increase, combined with other factors, led to a 1.8% decrease in operating earnings to $649 million for the quarter, despite stable gross profit margins.
What is the company's liquidity and financial health?
W.W. Grainger maintains a strong liquidity position, with $769 million in cash and cash equivalents and approximately $2.0 billion in available liquidity as of June 30, 2024. The company also holds investment-grade credit ratings from major agencies and reported a healthy increase in operating cash flow for the first six months of the year.
06—Continue