Grainger 3Q sales up 3 percent
Grainger reported third-quarter sales of $2.6 billion increased 3 percent versus $2.5 billion in the third quarter of 2015.
Net earnings for the quarter of $186 million were down 3 percent versus $192 million in 2015. Earnings per share of $3.05 increased 4 percent versus $2.92 in 2015.
Company operating earnings of $323 million for the 2016 third quarter declined 5 percent versus $341 million in the 2015 quarter. The decline was driven by lower gross profit margins partially offset by lower operating expenses.
"We continue to operate in a challenging economic environment," said DG Macpherson, chief executive officer. "The third quarter results were within our expectations. I'm pleased with our ability to continue to effectively manage costs in this low growth environment while still investing in our future success." Macpherson added."During the quarter, we continued to see strong revenue and earnings growth in our single channel online businesses, and we started operations in our new 1.3 million square foot distribution center in New Jersey. We expect fourth quarter demand to remain challenged, and as a result, we have narrowed our guidance and lowered the midpoint for the full year. We remain committed to managing the company for long-term success with a focus on providing our customers an exceptional experience at every touch."
The sales performance included a 2 percentage point contribution from Cromwell Group (Holdings) Limited, acquired on Sept. 1, 2015, and a 1 percentage point contribution from foreign exchange. Excluding acquisitions and foreign exchange, organic sales were flat, consisting of a 1 percentage point contribution from sales of seasonal products offset by a 1 percentage point reduction in price.
Sales for the U.S. segment declined 1 percent versus the 2015 third quarter. The decline was driven by a 1 percentage point decrease in volume and a 1 percentage point decline in price, partially offset by a 1 percentage point contribution from increased sales to Zoro, the single channel online business in the United States. Government and Retail customers posted the strongest sales growth in the quarter for the segment.
Third quarter 2016 sales for Acklands-Grainger declined 16 percent in U.S. dollars and local currency, consisting of 15 percentage points from lower volume and a 1 percentage point decline in price. Daily sales in the province of Alberta, which currently represents about 30 percent of the company's business in Canada, were down 22 percent versus the prior year, while daily sales for all other provinces were down 12 percent in the quarter.
Sales for the Other Businesses increased 36 percent for the 2016 third quarter versus the prior year, consisting of 16 percentage points from Cromwell, 15 percentage points from volume and price and a 5 percentage point benefit from foreign exchange. Strong performance for the Other Businesses was driven by 38 percent sales growth for the single channel online businesses.
For the nine months ended September 30, 2016, sales of $7.7 billion increased 2 percent versus $7.5 billion in the nine months ended September 30, 2015.