“This was a challenging year, and we were not satisfied with our overall 2014 performance. As we committed to a year ago, we addressed several smaller underperforming businesses and believe we have positioned the company for better results going forward,” said Chairman, President and Chief Executive Officer Jim Ryan. “There were, however, several bright spots in 2014, including the United States segment, which continued to perform very well, gaining share with large customers. We were also pleased with the single channel online model businesses in Japan, the United States and Europe, which continued their rapid growth.”
2014 fourth quarter
Sales for the 2014 fourth quarter of $2.5 billion increased 6 percent versus $2.4 billion in the 2013 fourth quarter. Reported net earnings of $149 million declined 5 percent versus $157 million in 2013.
The company has two reportable business segments, the United States and Canada, which represented approximately 88 percent of company sales for the quarter. The remaining operating units located primarily in Asia, Europe and Latin America are included in Other Businesses and are not reportable segments. Results for the company’s single channel online model businesses are included in Other Businesses.
Sales in the United States segment increased 6 percent in the 2014 fourth quarter versus the prior year. The 6 percent sales growth was driven by 6 percentage points from volume, 1 percentage point from price and 1 percentage point from sales of Ebola-related safety products, partially offset by a 1 percentage point negative variance from the extra month of E&R sales in the fourth quarter of 2013 and a 1 percentage point negative variance from the divestiture of several Specialty Brands on December 31, 2013. Strong sales growth to customers in the natural resources, commercial and manufacturing customer end markets contributed to the sales increase in the quarter.
Operating earnings for the United States segment increased 16 percent in the quarter driven by the 6 percent sales growth, positive expense leverage and higher gross profit margins.