10/16/2015 1:42:00 PM
NEWS BRIEFS
Grainger Reports Sales & Profit Decline
Grainger reported sales for the third quarter of 2015 declined 1% to $2.5 billion, with net earnings down 17% to $192 million and EPS dropping 12% to $2.92.
Grainger’s gross profit margin declined 1.1 percentage point to 41.9% versus 43% in the 2014 third quarter, due primarily to faster growth with lower gross margin customers, lower supplier rebates tied to lower-than-expected volume and price deflation versus slight cost inflation.
Q3 results included charges of $11 million related to the closure of 26 branches in the U.S.
Q3 sales for the U.S. segment were flat. Sales growth to customers in the Commercial, Light Manufacturing, Retail and Government customer end markets were offset by lower sales to Heavy Manufacturing, Contractor, Reseller and Natural Resources customers. Operating earnings for the U.S. segment declined 7%.
Q3 sales for Acklands-Grainger, the company’s Canadian division, declined 23%. Lower sales to the Oil and Gas, Construction, Commercial, Transportation, Retail, Heavy Manufacturing, Government and Light Manufacturing sectors were partially offset by growth to customers in the Mining, Utilities and Forestry end markets. In U.S. dollars, Q3 operating earnings in Canada fell 87%, driven by lower sales and lower gross profit margins.
“The business in Canada continues to be affected by weak oil and gas prices and lower commodity prices,” the company stated.
Grainger’s Other Businesses segment reported sales grew 18%, boosted by growth from volume and price. Q3 operating earnings nearly tripled to $14 million.
In the first nine months of 2015, Grainger sales increased 1% to $7.5 billion, with net earnings down 4% to $624 million and EPS dropping 1% to $9.24.
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Related Links:
• Grainger
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