Grainger 3Q sales up 2.4 percent
Grainger reported third-quarter sales of $3.0 billion, up 2.4 percent compared to the third quarter 2019.
The increase was driven by significant share gains in the U.S. segment and strong growth in the endless assortment businesses.
"I am extremely proud of the Grainger team for delivering strong results in both our U.S. high-touch and endless assortment businesses, as we continued to support new and existing customers, while prioritizing team member safety," said DG Macpherson, chairman and chief executive officer. "In the third quarter, we captured significant market share by delivering on our core growth initiatives. We also continued to prudently manage our costs and saw sequential margin improvement as non-pandemic volume improved in the quarter. These strong results and stabilizing trends show the value that Grainger brings to customers every day."
He added that Grainger's endless assortment model delivered 20 percent growth in the quarter, while also generating improved margins.
Daily sales for the quarter increased 2.4 percent as compared to the 2019 third quarter. Organic daily sales, which exclude revenues from the divested Fabory and China businesses from the prior year results, increased 4.6 percent compared to the 2019 third quarter. These sales increases were fueled by share gains in the U.S. segment and significant growth in the endless assortment businesses which more than offset declines in the Canada segment.
U.S. Segment sales were up 3.1 percent, outgrowing the U.S. MRO market which declined an estimated 5 percent to 6 percent. This increase was driven largely by higher volume of pandemic-related products, partially offset by year-over-year decreases in non-pandemic product sales. The declines in non-pandemic product sales continued to moderate, while growth in pandemic product sales remained elevated, but began to ease from the levels experienced earlier in the year.
Net earnings of $240 million, or $4.41 per diluted share, were up from $233 million, or $4.25, in the same quarter last year.
Grainger has successfully reduced its backlog of orders for most pandemic-related products, including masks, and continue to work with suppliers to catch up on a few categories that remain scarce, including some gloves and hand sanitizers.
"On the non-pandemic side, sales have improved since bottoming out in April, with nonpandemic sales now down about 7 percent year-over-year. This improvement has been seen across most industries with some of the obvious industries remaining the furthest below their pre-pandemic levels. These include airlines, hotels and cruise lines. Based on month-to-date performance, we forecast October sales to finish up around 2 percent for the U.S. segment on continued trends in pandemic and nonpandemic performance," Mcpherson said.
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