7/18/2012 11:16:00 AM
NEWS BRIEFS
Grainger Reports Record Sales and Earnings Results
Grainger reported record results for the second quarter of 2012, with sales gaining 12% to $2.2 billion, operating earnings rising 18% to $314 million and net earnings growing 12% to $191 million. EPS increased 12% to $2.63 during the period.
Second-quarter sales results included organic growth of 9% (six percentage points from volume and three percentage points from price increases); a five percentage point gain from acquisitions; and a two percentage point decline from unfavorable foreign exchange.
Earnings gains were driven by higher sales, improved gross profit margins and positive operating leverage.
“We are confident that our investments in expanding our product offering, enhancing our eCommerce platform, increasing our sales force and growing our inventory management solutions, provide value to our customers,” stated CEO Jim Ryan.
For the six months of 2012 Grainger sales grew 14% to $4.4 billion, with net earnings increasing 15% to $378 million.
United States
Sales in the U.S. grew 7% to $1.74 billion, driven by 4% volume growth and 3 percentage points from price. Daily sales were up 7% in April, 8% in May and 7% in June. June sales were driven by double digit growth to manufacturing customers as well as strong growth in the government end market.
“For the quarter, the heavy manufacturing, light manufacturing, retail, commercial, government, natural resources and reseller end markets all posted sales growth… while the contractor end market posted a small decline.”
Quarterly operating earnings in the United States increased 15%, with gross profit margins rising 20 basis points driven by price inflation exceeding product cost inflation, partially offset by negative customer and product mix. Expense leverage in the U.S. was positive despite an incremental $24 million in growth-related spending on new sales representatives, eCommerce and advertising.
U.S. sales in the first half of 2012 gained 8.8% to $3.44 billion, with operating earnings up 15.7% to $609.6 million.
Canada
Second quarter sales for Acklands-Grainger — the company’s Canadian business —increased 9%, or 14% in local currency (12% volume growth and 2% from price) to $279.6 million. The sales increase for the quarter in Canada was led by strong growth to customers in the commercial services, oil and gas, contractor and utilities end markets.
Operating earnings in Canada increased 15% to $33.5 million, up 20% in local currency. The strong improvement in operating performance was driven by strong sales growth, a 10 basis point improvement in gross profit margins and positive operating expense leverage.
Acklands-Grainger sales during the first six months of 2012 improved 10.6% to $552.5 million, with operating earnings up 19% to $63.3 million.
Other Businesses
Sales for the Other Businesses, which includes operations in Asia, Europe and Latin America, soared 84% to $249.1 million in Q2, primarily due to the incremental sales from the business in Europe (Fabory) acquired in August 2011, and the business in Brazil (AnFreixo) acquired in April 2012. Excluding acquisitions, sales for the Other Businesses increased 21%, primarily the result of strong revenue growth in Japan.
Operating earnings for the Other Businesses gained 22% to $11 million, boosted by strong earnings growth in Japan and Mexico.
Six-months sales in the Other Businesses category jumped 93% to $488.1 million, with operating earnings up 46% to $22 million.
Based on its first-half performance, Grainger reiterated its 2012 sales guidance of 12% to 14% growth, and increased its EPS guidance to a new range of $10.50 to $10.80. ©2012 GlobalFastenerNews.com
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Related Links:
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