Grainger (NYSE: GWW), the leading broad line supplier of maintenance, repair and operating (MRO) products serving businesses and institutions, in November held its Annual Analyst Meeting in Lake Forest, Illinois. Jim Ryan, Grainger chairman, president and chief executive officer, hosted the event. The meeting also included presentations from other Grainger leaders.
“We serve the needs of customers who are committed to keeping their facilities running and their people safe. The MRO market is large, highly fragmented and offers tremendous opportunity for growth,” said Ryan. “In addition to the challenging macro-environment, we are seeing meaningful shifts in customer behavior that will benefit Grainger. We are being proactive in making changes that position us well for the future. This includes providing industry-leading service, making select investments to drive growth and reducing our cost structure,” said Ryan.
As part of the meeting, Grainger provided the following outlook for sales and earnings in 2015 and 2016, adjusted for charges and unusual items as reported by the company in its quarterly earnings releases:
• For the 2015 fourth quarter, the company is forecasting sales of -3.0 to 0.0 percent and expects earnings per share of $2.20 to $2.40.
• For the full year 2015, the company reiterated its sales forecast of -0.5 to 0.5 percent and earnings per share guidance of $11.60 to $11.80.
• For the full year 2016, the company is forecasting sales growth of -1 to 7 percent and expects earnings per share of $10.80 to $13.00. Excluding the results from Cromwell Group (Holdings) Limited, acquired September 1, 205, the company is forecasting sales growth of -4 to 4 percent and expects earnings per share of $10.70 to $12.90.
Grainger also updated its longer term financial objectives. The company now expects operating margins of 14 to 15 percent by the year 2020. This improvement is expected to come from organic sales growth in the mid-single digits and long term operating margin expansion of approximately 30 basis points per year. For reference, Grainger’s operating margin in 2015 is expected to be 13.2 to 13.3 percent excluding restructuring charges and unusual items as reported by the company in its quarterly earnings releases.
Information presented at the Annual Analyst Meeting, including details supporting the company’s guidance and longer term expectations, can be found in the News and Events section of the Investor Relations web site, www.grainger.com/investor.
W.W. Grainger, Inc., with 2014 sales of $10 billion, is North America’s leading broad line supplier of maintenance, repair and operating products, with operations also in Asia, Europe and Latin America.