8-KOther EventsExhibits & Filings

W.W. GRAINGER, INC. 8-K Report, Corporate Update (Mar 8, 2021)

Filed March 8, 2021For Securities:GWW

Summary

W.W. Grainger, Inc. (GWW) has announced a significant change in its reportable segment structure, effective January 1, 2021. This reclassification aims to better align with the company's go-to-market strategies and distinct business models. The new structure bifurcates operations into "High-Touch Solutions North America" (encompassing the Grainger-branded businesses in the U.S., Canada, Mexico, and Puerto Rico) and "Endless Assortment" (including the online Zoro and MonotaRO businesses, primarily in the U.S. and Japan). Remaining international high-touch operations will be reported under an "Other" category. Furthermore, the company has updated its accounting policies for corporate costs and intersegment sales. Corporate costs are now fully allocated to reportable segments based on benefits received, replacing the previous "Unallocated expenses." Intersegment sales will now be eliminated within segments to reflect only third-party sales, with associated service fees moving from gross profit to SG&A. Investors should note that this 8-K filing provides recast historical financial information for prior periods under this new structure, but it does not alter previously reported consolidated financial results or key metrics like net income or EPS.

Key Highlights

  • 1W.W. Grainger has reorganized its reportable segments into "High-Touch Solutions North America" and "Endless Assortment" effective January 1, 2021.
  • 2The "High-Touch Solutions North America" segment includes Grainger-branded businesses in the U.S., Canada, Mexico, and Puerto Rico.
  • 3The "Endless Assortment" segment comprises the online Zoro and MonotaRO businesses, primarily operating in the U.S. and Japan.
  • 4International high-touch operations not fitting into the new segments will be classified under an "Other" category.
  • 5Corporate costs are now fully allocated to segments, moving away from "Unallocated expenses."
  • 6Intersegment sales are now eliminated at the segment level to focus on third-party sales, with service fees reclassified to SG&A.
  • 7The filing provides recast historical financial data for fiscal years 2018-2020 and select quarters in 2019-2020 under the new segment structure.

Frequently Asked Questions

The company is changing its reportable segments to better align with its go-to-market strategies and bifurcated business models, which it identifies as 'high-touch solutions' and 'endless assortment.' This aims to provide a clearer view of performance across these distinct operational approaches.

No, the filing explicitly states that this change in reporting segments does not amend or restate the company's previously reported consolidated financial statements. It does not change the company's reported total assets, liabilities, shareholders' equity, net income, or earnings per share.

This segment includes the Grainger-branded businesses located in the United States, Canada, Mexico, and Puerto Rico. These operations are characterized by providing value-added MRO solutions rooted in deep product knowledge and customer expertise.

This segment covers the company's online businesses, specifically Zoro and MonotaRO. These businesses operate predominantly in the U.S. and Japan and are designed to offer customers a wide selection of millions of products through a streamlined online experience.