Grainger earnings rise on 1% sales gain
Grainger reported second quarter sales of $2.52 billion increased 1 percent versus $2.5 billion in the 2014 second quarter.
Net earnings increased 7 percent to $221 million versus $206 million in 2014. Earnings per share of $3.25 increased 11 percent versus $2.94 in 2014.
"While this continues to be a difficult economic environment, we are focusing on the things we can control," said chairman, president and chief executive officer Jim Ryan. "Despite continued softness in sales and gross profit margins from a tough industrial economy, we continue to invest for the long term while driving significant productivity to fund growth and infrastructure investments and reduce overall margin pressure. We have also leveraged our strong balance sheet with a recent $1 billion bond placement and lowered our tax rate through improved tax planning strategies. We expect the current economic conditions to continue through the end of the year and as a result we are updating our guidance," Ryan concluded. The company now expects 0 to 2 percent sales growth and earnings per share of $12.00 to $12.50 for the full year 2015. The company's previous 2015 guidance, issued on April 16, included 1 to 4 percent sales growth and earnings per share of $12.25 to $12.95.
The 2015 second quarter included charges of $2 million, or 2 cents per share, related to the restructuring at Fabory in Europe and the shutdown of the business in Brazil. During the 2014 second quarter, the company recorded a charge of $10 million after-tax, or 15 cents per share, related to the transition of its employee retirement plan for Fabory in Europe.
Sales for the United States segment increased 2 percent in the 2015 second quarter versus the prior year driven by 2 percentage points from volume and 1 percentage point from increased sales to Zoro, the single channel online business in the United States, partially offset by a 1 percentage point decline in price. Sales growth to customers in the Commercial, Government, Light Manufacturing and Retail customer end markets contributed to the sales increase in the quarter.
Sales for Acklands-Grainger (AGI) declined 9 percent in U.S. dollars in the second quarter of 2015 but were up 2 percent in local currency. The 2 percent sales increase consisted of 8 percentage points from WFS Enterprises Inc. acquired on Sept. 2, 2014, and 4 percentage points from price partially offset by a 10 percentage point decline in volume. AGI had lower sales to the Oil and Gas, Construction, Commercial, Retail, Heavy Manufacturing, Forestry and Transportation customer end markets, which were partially offset by growth to customers in the Light Manufacturing, Mining, Government and Utilities customer end markets. The business in Canada continues to be affected by weak oil and gas prices and lower commodity prices. Sales in the province of Alberta, which represents more than a third of the company's business in Canada, were down 18 percent in local currency versus the prior year. In aggregate, sales growth for the remaining provinces was positive in local currency versus the prior year.
Sales for the Other Businesses increased 7 percent, consisting of 21 percentage points of growth from volume and price, partially offset by a 14 percentage points decline from foreign exchange. Local currency sales growth in the Other Businesses was driven by Zoro U.S., Japan and Mexico.
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.
