Posted September 21, 2022

Grainger anticipates 8-10% compounded annual growth

Grainger anticipates that its annual sales will hit $20 billion by the year 2025.

That is one expectation that the company will share with investors today at the company's Northeast Distribution Center in Bordentown, New Jersey.

Members of Grainger's executive team will present an update on the company's strategy including new three-year financial targets through 2025.

D.G. Macpherson"We have made significant progress over the last several years by starting with the customer and focusing on what matters to drive strong results," said D.G. Macpherson, chairman and CEO. "With a commitment to provide a flawless experience and tangible value for our customers, we are gaining momentum and remain well-positioned to create significant shareholder value by delivering on our financial targets over the next three years."

Presenters will highlight the following expectations during the event:

  • In its High-Touch Solutions N.A. segment, Grainger increases its U.S. market outgrowth target to 400 to 500 basis points per year
  • In its Endless Assortment segment, Grainger expects annual high-teens sales growth in local currency for both Zoro and MonotaRO through 2025
  • Grainger plans to invest in Distribution Center capacity, automation, and environmental, social and governance (ESG) initiatives to support future growth expectations

Assuming normal economic growth, delivering on these expectations would result in total company full year 2025 performance targets, including:

  • Net sales between $19 and $20 billion, representing 8 percent to 10 percent compounded annual growth compared to the mid-point of 2022 guidance of $15.1 billion
  • Adjusted operating margin of approximately 14.5 percent, representing approximately 70 basis points of improvement compared to the mid-point of 2022 guidance of 13.8
  • Adjusted earnings per share of approximately $40, a 43 percent increase compared to the mid-point of 2022 guidance of $28
  • Operating cash flow of approximately $2 billion, a 54 percent increase compared to the mid-point of 2022 guidance at $1.3 billion
  • Expected annual capital expenditures between $500 and $600 million per year for 2023 through 2025

Grainger also reaffirms its prior full year 2022 guidance, previously provided on July 29, 2022, including 14.5 percent to 16.5 percent total daily sales growth, and adjusted EPS between $27.25 to $28.75, up 37 percent to 45 percent compared to 2021.