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Grainger (GWW) Q2 Earnings Top Estimates, Revenues Rise Y/Y

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W.W. Grainger, Inc. (GWW - Free Report) has reported earnings per share (EPS) of $9.76 in second-quarter 2024, beating the Zacks Consensus Estimate of $9.58. The bottom line improved 5% year over year, driven by an upbeat demand in the High-Touch Solutions N.A. and Endless Assortment segments.

Grainger’s quarterly revenues rose 3.1% year over year to $4.31 billion. However, the top line missed the Zacks Consensus Estimate of $4.35 billion. Daily sales increased 3.1% from the prior-year quarter. We predicted daily sales to increase 4.6% in the quarter.

The High-Touch Solutions N.A. segment’s daily sales were up 3.1% in the quarter from the second quarter of 2023, driven by solid volume growth. Our model predicted year-over-year daily sales growth of 4.5% for the quarter.
The Endless Assortment segment’s daily sales were up 3.3% in the quarter due to increased customer acquisition across the segment and enterprise customer growth at MonotaRO. However, the reported figure lagged our estimated growth of 3.9%.

W.W. Grainger, Inc. Price, Consensus and EPS Surprise

 

W.W. Grainger, Inc. Price, Consensus and EPS Surprise

W.W. Grainger, Inc. price-consensus-eps-surprise-chart | W.W. Grainger, Inc. Quote

Operational Update

Cost of sales rose 3.2% year over year to $2.62 billion. The gross profit rose 3% year over year to $1.69 billion. The gross margin was constant at 39.3% in the quarter.

Grainger’s operating income in the quarter was down 1.8% year over year to $649 million. The operating margin was 15.1% compared with 15.8% in the prior-year quarter.

Financial Position

The company had cash and cash equivalents of $769 million at the end of the second quarter of 2024, up from $660 million at the 2023 end. Cash flow from operating activities was $411 million in the second quarter of 2024 compared with $450 million in the prior-year quarter.

Long-term debt was $1.78 billion as of Jun 30, 2024, compared with $2.27 billion as of Dec 31, 2023. Grainger returned $345 million to shareholders through dividends and share buybacks in the reported quarter.

2024 Outlook

GWW expects net sales between $17 billion and $17.3 billion, updated from the prior stated $17.2-$17.7 million. Sales growth is anticipated to be 3.2-5.2%. Daily sales growth is envisioned at 4-6% compared with the earlier mentioned 4-7%. Earnings per share are expected to be $38.00-$39.50 compared with prior stated $38.00-$40.50.

Price Performance

In the past year, Grainger’s shares have gained 35.9% compared with the industry’s growth of 0.8%.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Zacks Rank

Grainger currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Performances

MSC Industrial Direct Company, Inc. (MSM - Free Report) reported third-quarter fiscal 2024 (ended on Jun 1, 2024) adjusted EPS of $1.33, meeting the Zacks Consensus Estimate. The bottom line decreased 23.6% year over year, attributed to the prolonged weakness in the manufacturing sector, wherein MSM has a significant exposure. 
  
MSC Industrial generated revenues of around $979 million, down 7% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $993 million.

SiteOne Landscape Supply, Inc. (SITE - Free Report) reported adjusted earnings per share of $2.63 in the second quarter of 2024, beating the Zacks Consensus Estimate of $2.50. The company posted earnings of $2.71 per share in the second quarter of 2023.

SITE posted revenues of $1.41 billion for the June-end quarter of 2024, surpassing the Zacks Consensus Estimate of $1.38 billion. The top line rose 4.4% year over year.

Industrial Services Stock Awaiting Results

Hillenbrand, Inc. (HI - Free Report) is set to release its third-quarter fiscal 2024 results on Aug 8.

The Zacks Consensus Estimate for HI’s earnings per share is pegged at 82 cents for the fiscal third quarter, suggesting a decline of 13.7% from the year-ago reported figure. The Zacks Consensus Estimate for total revenues is pinned at $815.9 million, indicating a year-over-year increase of 13.7%.

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