Sales up, earnings down for Grainger
Grainger in July reported results for the 2017 second quarter ended June 30, 2017. Sales of $2.6 billion increased two percent versus $2.6 billion in the second quarter of 2016. Net earnings for the quarter of $98 million were down 43 percent versus $173 million in 2016. Earnings per share of $1.67 declined 40 percent versus $2.79 in 2016.
The company reiterated its 2017 sales and earnings per share guidance of sales growth of one to four percent and adjusted earnings per share of $10.00 to $11.30.
Sales for the U.S. segment were up one percent versus the 2016 second quarter. The increase was driven by a five percentage point increase from volume and one percentage point from intercompany sales. Sales to customers in the retail and natural resources end markets led the sales performance in the quarter.
Operating earnings for the U.S. segment declined 11 percent in the quarter driven by lower gross profit and higher operating expenses. Gross profit margins for the quarter declined 1.3 percentage points driven by the strategic price initiatives.
Second quarter 2017 sales for the Canada segment decreased three percent in U.S. dollars and increased two percent in local currency.
The business in Canada posted a $28 million operating loss in the 2017 second quarter versus a $28 million operating loss in the prior year.
Ron Jadin, senior vice president and chief financial officer announced that he will be retiring at year-end. Jadin joined Grainger in 1998 and has served in various financial roles including as CFO since 2008. An external search has been launched to identify his successor.
For the six months ended June 30, 2017, sales of $5.2 billion increased two percent versus $5.1 billion in the six months ended June 30, 2016. Net earnings decreased 24 percent to $273 million versus $359 million in the first half of 2016.