Grainger reported sales, including fasteners, rose 3% to $10.4 billion in 2017, while net earnings declined 3% to $586 million. 

“We made progress by removing the pricing barrier and improving service for customers while improving our cost structure,” stated CEO DG Macpherson. 

“This continued in the fourth quarter with strong performance, as customers responded positively to our actions.  We’re encouraged that we remain on track with our volume growth and expense management goals in an improving demand environment.”

Capital expenditures for the year declined 20% to $237 million.

Fourth quarter sales rose 7% to $2.6 billion, consisted of an 11 percentage point increase from volume, partially offset by a 3 percentage point decline from price and a 1 percentage point decline from the divestiture of a specialty business. Q4 net earnings more than doubled to $151 million. 

Grainger’s gross profit margin for Q4 decreased 1.3 percentage points, primarily driven by price deflation in the U.S., partially offset by higher gross profit margin in Canada. 

United States
Q4 sales in the U.S. segment increased 5% to $1.99 billion, consisting of a volume increase of 11 percentage points, partially offset by 5 percentage points from price and a 1 percentage point decline from the divestiture of a specialty business. Resellers and heavy manufacturing end markets had the strongest sales performance in the quarter. 

U.S. segment operating earnings increased 16% in Q4, driven by higher sales and lower restructuring charges.  The segment’s gross profit margin for the quarter decreased 1.8 percentage points driven by price deflation. 

Full-year sales in the U.S. segment rose 1.1% to $7.96 billion, while operating earnings dropped 4.8% to $1.2 billion.

Canada
Q4 sales in the Canada segment gained 5% to $189.4 million, consisting of 5 percentage points from favorable foreign exchange and a 4 percentage point increase from price, partially offset by a 4 percentage point decrease from volume. Sales to Oil and Gas and Agriculture/Mining customer end markets had the strongest performance in the quarter.

The Canada segment operating loss increased 70% to $17 million, driven by higher operating expenses. The segment’s gross profit margin increased 1.4 percentage points, primarily due to Q4 price increases.

Full-year Canada segment sales grew 2.6% to $752.9 million, with a loss of $76.5 million.

Other Businesses
Q4 sales for Grainger’s Other Businesses segment (Europe, Asia and Latin America) increased 16% to $559.4 million, composed of volume and price.  Sales growth in the was primarily driven by MonotaRO in Japan and Zoro in the U.S. Quarterly operating earnings dropped to $11 million.

Full-year segment sales gained 12.5% to $2.1 billion, with operating earnings up 36% to $55.6 million. Web: Grainger.com