Grainger Q1 sales up 7.2 percent
Driven by sales of pandemic-related PPE items, Grainger reported sales of $3.0 billion in the first quarter, an increase of 7.2 percent from $2.8 billion in the 2019 first quarter.
On a daily basis, sales were up 5.5 percent. The first quarter had one more selling day than the prior year period.
Net earnings of $173 million, or $3.19 per diluted share, fell from earnings of $253 million, or $4.48, in the same quarter last year. Reported earnings in the 2020 first quarter included $184 million in restructuring and non-cash impairment charges, which were primarily related to the Fabory business in the Netherlands.
Overall, U.S. daily sales grew 5.7 percent in the quarter, with pandemic-related product sales representing about half of the sales growth.
In Grainger’s Other Businesses segment, daily sales increased 8.5 percent, driven by expansion of the Endless Assortment businesses, which grew by 17 percent on a daily basis between Zoro and MonotaRO.
In Canada, daily sales decreased 6.1 percent.
“For the total company, we estimate that pandemic related product sales represent roughly half of our sales growth,” said Tom Okray, senior vice president and CFO, in a conference call Thursday morning.
Grainger anticipates that second-quarter results will be negatively affected by the COVID-19 pandemic. In the first few weeks of April, the company is seeing year over year sales declines of approximately 10 percent.
“Not surprisingly, our health care, essential manufacturing and pockets of government are growing significantly faster year over year, and we are seeing rapid declines elsewhere, in areas such as hospitality and heavy manufacturing,” said Okray.
By product category, safety and cleaning supplies are up significantly year over year, with most other categories down, some dramatically.
Grainger chairman and CEO DG Macpherson said the company is well positioned to manage through the pandemic.
"We are focused on serving our customers well, ensuring the safety and well-being of our team members, and maintaining a strong financial position to support us through this crisis. By supporting customers who are saving lives and keeping communities safe, we are demonstrating the power of our products and solutions, deep customers relationships, and exceptional customer experience. Our strategy matters even more today," he said.
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