Categories Earnings, Other Industries

W.W. Grainger lifts forecast after upbeat Q2 results

W.W. Grainger (GWW) reported a 142% jump in earnings for the second quarter driven by higher sales, strong operating expense leverage, a lower tax rate and a lower share count. Revenue and profit exceeded Street’s expectations. The seller of maintenance and other supplies also raised its sales and EPS guidance for the year based on its performance and momentum.

With sales rising by 9.4% to $2.86 billion, earnings climbed 142% to $237 million or $4.16 per share. Adjusted EPS soared 59% to $4.37. The company maintained its trend of surpassing earnings in the trailing four quarters, recording an average positive earnings surprise of 18.7%.

Sales benefited by a 9 percentage point rise from volume and 1 percentage point of growth from foreign exchange. This is partially offset by a 1 percentage point decline from the divestiture of a specialty business.

Looking ahead into fiscal 2018, the company raised its sales growth outlook to the range of 5.5-8.5% from 5-8%, and its EPS guidance to the range of $15.05-$16.05 from $14.30-$15.30.

W.W. Grainger second quarter 2018 earnings
W.W. Grainger Q2 2018 Earnings Infographics

Sales for the US segment increased by 9%, driven by volume growth, higher sales of seasonal products and a benefit from holiday timing. Sales from Other Businesses grew 18%, on growth from volume and price as well as a favorability of foreign exchange. The performance in Other Businesses was driven by 25% sales growth for the single channel online businesses, which continue to be a profitable growth driver.

Sales for Canada decreased by 6%, due to a dip in volume. The segment continues to face increasing expenses and the company is in the midst of considerable transformation. The results were driven by its continued focus on improving the business cost structure through branch reductions, improving service to customers and the creation of North American centers of excellence.

Also Read:  Philip Morris surprises Wall St with Q2 earnings growth, hiked guidance

Shares of W.W. Grainger closed Tuesday’s regular trading session up 0.67% at $304.96 and was up about 4% in today’s pre-market trading session. The stock had been trading between $155 and $322.34 for the past 52 weeks.

Related Infographics: Q1 earnings

Grainger First Quarter 2018 Earnings

 

 

 

 

 

 

 

 

Most Popular

Levi Strauss (LEVI): Digital maintains momentum amid pandemic-induced store closures

Amid the COVID-19 pandemic, several retailers were forced to close their stores but in turn witnessed a pickup in their digital business. Levi Strauss & Co. (NYSE: LEVI) is the

Mattel’s (MAT) transformation plan will depend on how pandemic plays out

The ongoing market turmoil has upset the growth strategy set by Mattel, Inc. (NASDAQ: MAT), with focus on transitioning into an IP-driven company. Currently, the maker of legendary brands like

Lemonade (LMND): A successful IPO of 2020

The usage of artificial intelligence (AI) has accelerated rapidly in the fintech industry. Many insurance companies are using AI to compete with their competitors. These insurance companies use AI in

Tags

Top