Grainger earnings down on flat sales
Grainger reported sales of $10 billion for 2015 were flat versus 2014.
Reported net earnings of $769 million decreased 4 percent versus $802 million in 2014. Reported earnings per share of $11.58 increased 1 percent versus $11.45 in 2014.
"This was a challenging year for us and for most industrial companies, with an unprecedented combination of declining oil and commodity prices, low inflation and a strong U.S. dollar," said chairman, president and chief executive officer Jim Ryan. "We took action in 2015 by restructuring several of our businesses, resulting in a leaner cost structure. As previously communicated, we will continue to execute changes in the United States and Canada in 2016."
During the year, Grainger closed 49 branches in the United States, 16 branches in Canada and 16 branches at Fabory in Europe.
"We also continued to invest for the future by expanding and upgrading our industry-leading supply chain, digital capabilities, sales force productivity tools and KeepStock, which enables us to serve customers the way they want to be served," Ryan added.
Sales for Grainger's no frills e-commerce initiative, Zoro, increased by 62 percent to $296 million in 2015.
Sales for the 2015 fourth quarter of $2.5 billion decreased 1 percent versus the 2014 fourth quarter. Reported net earnings of $145 million declined 2 percent versus $149 million in 2014. Reported fourth quarter earnings per share of $2.30 increased 7 percent versus $2.14 in 2014.
Sales in the United States segment decreased 3 percent in the 2015 fourth quarter versus the prior year. The 3 percent sales decline was driven by a 2 percentage point decline from volume, a 1 percentage point decline from price, a 1 percentage point decline from lower sales of seasonal products and a 1 percentage point decline from sales of Ebola related safety products in 2014 that did not repeat, partially offset by 1 percentage point from higher intercompany sales to Zoro and 1 percentage point from the favorable timing of the Christmas holiday. Retail and government customers had the strongest sales performance in the quarter.
In Canada, sales in the 2015 fourth quarter at Acklands-Grainger decreased 27 percent in U.S. dollars, 14 percent in local currency. The 14 percent sales decrease consisted of a 17 percentage point decrease from volume and a 1 percentage point decrease from lower sales of seasonal products, offset by a 4 percentage point contribution from price. Weakness in the oil and gas industries continued to affect sales to Canada's customers. Sales to all customer end markets except Government and Forestry were down versus the prior year.
Sales for the Other Businesses segment increased 41 percent for the 2015 fourth quarter versus the prior year. This performance consisted of 33 percentage points from Cromwell, acquired on Sept. 1, 2015, and 18 percentage points of growth from volume and price, partially offset by a 10 percentage point decline from unfavorable foreign exchange. Organic sales growth in the Other Businesses was primarily driven by MonotaRO in Japan and Zoro in the United States.
INDUSTRIAL SUPPLY MAGAZINE
The March/April issue of Industrial Supply magazine features an in-depth cover story about Joyce Lansdale and Vallen. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and David Kahle, as well as interviews with numerous product and distribution industry experts.
