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Posted January 24, 2018

Grainger full-year sales up 3 percent

Grainger reported sales of $10.4 billion in 2017 were up 3 percent versus $10.1 billion in 2016.


Reported net earnings of $586 million declined 3 percent versus $606 million in 2016. Reported earnings per share of $10.02 were up 2 percent versus $9.87 in 2016.

"Overall we were pleased with the year. We made progress by removing the pricing barrier and improving service for customers while improving our cost structure. This continued in the fourth quarter with strong performance, as customers responded positively to our actions. We're encouraged that we remain on track with our volume growth and expense management goals in an improving demand environment," said DG Macpherson, chairman and chief executive officer. "In Canada, we are in the early stages of a business model reset and like the progress we are seeing. We remain focused in 2018 on providing the best experience and value for our customers," he concluded.

Sales in the 2017 fourth quarter of $2.6 billion were up 7 percent versus $2.5 billion the prior year. The increase consisted of an 11 percentage point increase from volume, partially offset by a 3 percentage point decline from price and a 1 percentage point decline from the divestiture of a specialty business.

Net earnings for the quarter of $151 million compared to $61 million in the prior year fourth quarter.

Sales in the U.S. segment of $2 billion were up 5 percent versus the prior year. The sales increase consisted of a volume increase of 11 percentage points, partially offset by 5 percentage points from price and a 1 percentage point decline from the divestiture of a specialty business. Resellers and heavy manufacturing end markets had the strongest sales performance in the quarter.

U.S. segment operating earnings increased 16 percent versus the 2016 quarter. The increase was driven by higher sales and lower restructuring charges. The segment's gross profit margin for the quarter decreased 1.8 percentage points driven by price deflation. Operating expenses decreased 6 percent due to lower restructuring charges. Excluding restructuring items, adjusted operating expenses were up 2 percent and adjusted operating earnings in the quarter were down 1 percent.

Sales in the Canada segment of $189 million were up 5 percent in U.S. dollars versus the prior year. The increase consisted of 5 percentage points from favorable foreign exchange and a 4 percentage point increase from price, partially offset by a 4 percentage point decrease from volume. Sales to Oil and Gas and Agriculture/Mining customer end markets had the strongest performance in the quarter.

The Canada segment operating loss was $17 million versus a $10 million loss in the 2016 quarter, driven by higher operating expenses. The segment's gross profit margin increased 1.4 percentage points, primarily due to price increases taken in the fourth quarter. Operating expenses increased 18 percent in the quarter due to restructuring charges. Excluding restructuring items, adjusted operating expenses were up 7 percent, up 2 percent in local currency, and adjusted operating earnings in the quarter were up 59 percent.

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