Operational execution driving resilient
performance;
Company narrows 2024 earnings
outlook
Second Quarter Highlights
- Delivered sales of $4.3
billion, up 3.1%, or 5.1% on a daily, organic constant
currency basis
- Achieved reported operating margin of 15.1%, down
70 basis points, or 15.4% on an adjusted basis, down
40 basis points
- Generated diluted EPS of $9.51
on a reported basis, up 2.5%, or $9.76 on an adjusted basis, up 5.2%
- Produced $411 million in
operating cash flow and returned $345
million to Grainger shareholders through dividends and share
repurchases
- Narrowing most 2024 total Company guidance ranges, including
daily, organic constant currency sales growth of 4.0% to 6.0% and
adjusted diluted EPS of $38.00 to
$39.50
CHICAGO, Aug. 1, 2024
/PRNewswire/ -- Grainger (NYSE: GWW) today reported results for the
second quarter of 2024 with sales of $4.3
billion, up 3.1%, or 5.1% on a daily, organic constant
currency basis, and adjusted diluted EPS of $9.76, up 5.2% compared to the second quarter of
2023.
"I'm proud of our team for providing a flawless experience and
creating tangible value for our customers. Amidst the backdrop of a
slow, but generally stable demand environment, we focused on what
matters and produced another quarter of solid results," said D.G.
Macpherson, Chairman and CEO. "As we look to the second half of the
year, I'm confident in our ability to execute well and deliver
results for all stakeholders."
2024 Second Quarter Financial Summary
($ in millions,
except per share amounts)
|
Q2
2024
|
Q2
2023
|
Q2'24 vs.
Q2'23
Fav. /
(Unfav.)
|
|
Reported
|
Adjusted(1)
|
Reported
|
Adjusted
|
Reported
|
Adjusted
|
Net
Sales
|
$4,312
|
$4,312
|
$4,182
|
$4,182
|
3.1 %
|
3.1 %
|
Gross
Profit
|
$1,694
|
$1,694
|
$1,644
|
$1,644
|
3.0 %
|
3.0 %
|
Operating
Earnings
|
$649
|
$665
|
$661
|
$661
|
(1.8) %
|
0.6 %
|
Net Earnings
Attributable to W.W. Grainger, Inc.
|
$470
|
$482
|
$470
|
$470
|
— %
|
2.6 %
|
Diluted Earnings Per
Share
|
$9.51
|
$9.76
|
$9.28
|
$9.28
|
2.5 %
|
5.2 %
|
|
|
|
|
|
|
|
Gross Profit
Margin
|
39.3 %
|
39.3 %
|
39.3 %
|
39.3 %
|
0 bps
|
0 bps
|
Operating
Margin
|
15.1 %
|
15.4 %
|
15.8 %
|
15.8 %
|
(70) bps
|
(40) bps
|
Effective Tax
Rate
|
22.9 %
|
22.9 %
|
24.0 %
|
24.0 %
|
110 bps
|
110 bps
|
(1) Results
exclude restructuring costs incurred in the second quarter of 2024.
See the supplemental information of this release
for a reconciliation of adjusted and non-GAAP
financial measures.
|
Revenue
Sales in the quarter, on a reported and daily
basis, increased 3.1% compared to the second quarter of 2023.
Normalizing for the impact of foreign currency exchange and the
Company's 2023 divestiture of its subsidiary, E & R Industrial
Sales, Inc., sales on a daily, organic constant currency basis
increased 5.1% compared to the second quarter of 2023.
In the High-Touch Solutions - N.A. segment, sales, on a reported
and daily basis, were up 3.1%, or up 3.7% on a daily, organic
constant currency basis, compared to the second quarter of 2023.
Revenue growth for the segment was driven by increased volume in
all geographies and included broad-based gains across most customer
end markets. In the Endless Assortment segment, daily sales were
up 3.3%, or 11.7% on a daily, constant currency basis,
compared to the second quarter of 2023. Revenue growth for the
segment was driven by core B2B customers at Zoro and strong
performance across MonotaRO, most notably with Enterprise
customers. This growth was partially offset by the continued
decrease in non-core customers at Zoro.
Gross Profit Margin
Gross profit margin of 39.3% in
the second quarter of 2024 was flat to the second quarter of
2023.
In the High-Touch Solutions - N.A. segment, 2024 second
quarter gross profit margin of 41.7% was flat over the prior year
quarter as various factors offset in the period. In the Endless
Assortment segment, gross profit margin declined by 20 basis points
from the second quarter of 2023 driven primarily by product and
customer mix headwinds.
Earnings
For the second quarter of 2024, total company
reported operating earnings were $649 million, down 1.8%
compared to the second quarter of 2023. Reported operating margin
in the quarter was 15.1%, a 70-basis point decrease from the second
quarter of 2023. On an adjusted basis, which removes restructuring
costs incurred in the period, operating earnings for the quarter
were $665 million, up 0.6% over the
second quarter of 2023. Adjusted operating margin was 15.4%, a 40
basis point decrease over the second quarter of 2023, driven by
continued investment in demand-generating activities and
distribution center network expansion.
Diluted earnings per share for the second quarter of 2024 were
$9.51 on a reported basis, up 2.5%
compared to the second quarter of 2023. On an adjusted basis,
diluted earnings per share were $9.76, up 5.2% versus the second quarter of 2023.
The increase was driven by sales growth, fewer shares
outstanding and a lower tax rate.
Tax Rate
The second quarter 2024 effective tax rate
was 22.9%, compared to 24.0% in the second quarter of 2023. The
lower effective tax rate was primarily due to an increase in tax
credits over the prior year quarter.
Cash Flow
During the second quarter of 2024, the
Company generated $411 million of
cash flow from operating activities, as solid net earnings were
partially offset by unfavorable working capital. The Company
invested $76 million in capital
expenditures, resulting in free cash flow of $335 million. During the quarter, the Company
returned $345 million to Grainger
shareholders through dividends and share repurchases.
Guidance
The Company is providing the following
updated total company 2024 guidance, including a narrowed earnings
outlook.
Total
Company(1)
|
Previous 2024
Guidance Range
(as of April 25,
2024)
|
Updated 2024
Guidance Range
(as of August 1,
2024)
|
Net Sales
|
$17.2 - $17.7
billion
|
$17.0 - $17.3
billion
|
Sales
Growth
|
4.3% - 7.3%
|
3.2% - 5.2%
|
Daily,
organic constant currency sales growth
|
4.0% - 7.0%
|
4.0% - 6.0%
|
Gross Profit
Margin
|
39.1% -
39.4%
|
39.2% -
39.4%
|
Operating
Margin
|
15.3% -
15.8%
|
15.3% -
15.7%
|
Diluted Earnings per
Share
|
$38.00 -
$40.50
|
$38.00 -
$39.50
|
Operating Cash
Flow
|
$1.9 - $2.1
billion
|
$1.95 - $2.15
billion
|
CapEx (cash
basis)
|
$0.4 - $0.5
billion
|
$0.4 - $0.475
billion
|
Share
Buyback
|
$0.9 - $1.1
billion
|
$1.0 - $1.2
billion
|
Effective Tax
Rate
|
~24.0%
|
~24.0%
|
|
|
|
Segment Operating
Margin
|
|
|
High-Touch Solutions -
N.A.
|
17.4% -
17.9%
|
17.4% -
17.8%
|
Endless
Assortment
|
7.3% - 7.8%
|
7.6% - 8.0%
|
(1) Guidance
provided is on an adjusted basis. Daily, organic constant currency
sales growth is adjusted for the impact of two
additional selling days in 2024 as compared to
2023, the sale of the Company's divested E & R Industrial
Sales, Inc.
subsidiary completed in the fourth quarter of
2023, and changes in foreign exchange. The Company does not
reconcile
forward-looking non GAAP financial measures.
For further details see the supplemental information of this
release.
|
Webcast
The Company will conduct a live conference
call and webcast at 11:00 a.m. ET on
Thursday, August 1, 2024, to discuss the second quarter
results. The webcast will be hosted by D.G. Macpherson, Chairman
and CEO, and Deidra Merriwether,
Senior Vice President and CFO, and can be accessed at
invest.grainger.com. For those unable to participate
in the live event, a webcast replay will be available for 90 days
at invest.grainger.com.
About Grainger
W.W. Grainger, Inc., is a leading broad
line distributor with operations primarily in North America, Japan and the United
Kingdom. At Grainger, We Keep the World Working® by serving
more than 4.5 million customers worldwide with products delivered
through innovative technology and deep customer relationships. With
2023 sales of $16.5 billion, the
Company operates two business models. In the High-Touch Solutions
segment, Grainger offers approximately 2 million maintenance,
repair and operating (MRO) products and services, including
technical support and inventory management. In the Endless
Assortment segment, Zoro.com offers customers access to more than
13 million products, and MonotaRO.com offers more than 22 million
products. For more information, visit www.grainger.com.
Visit invest.grainger.com to view
information about the Company, including a supplement regarding
2024 second quarter results. Additional Company information can be
found on the Grainger Investor Relations website which includes the
Company Snapshot and ESG report.
Safe Harbor Statement
All statements in this
communication, other than those relating to historical facts, are
"forward-looking statements." Forward-looking statements can
generally be identified by their use of terms such as "believe,"
"could," "future," "guidance," "may," "predict," "prospects,"
"will," or "would," and similar terms and phrases, including
references to assumptions. Forward-looking statements are not
guarantees of future performance and are subject to a number of
assumptions, risks and uncertainties, many of which are beyond our
control, which could cause actual results to differ materially from
such statements. Forward-looking statements include, but are not
limited to, statements about future strategic plans and future
financial and operating results. Important factors that could cause
actual results to differ materially from those presented or implied
in the forward-looking statements include, without limitation:
inflation, higher product costs or other expenses, including
operational and administrative expenses; the impact of
macroeconomic pressures and geopolitical trends, changes and
events; a major loss of customers; loss or disruption of sources of
supply; changes in customer or product mix; increased competitive
pricing pressures; changes in third party practices regarding
digital advertising; failure to enter into or sustain contractual
arrangements on a satisfactory basis with group purchasing
organizations; failure to develop, manage or implement new
technology initiatives or business strategies, including with
respect to Grainger's eCommerce platforms; failure to adequately
protect intellectual property or successfully defend against
infringement claims; fluctuations or declines in Grainger's gross
profit margin; Grainger's responses to market pressures; the
outcome of pending and future litigation or governmental or
regulatory proceedings, including with respect to wage and hour,
anti-bribery and corruption, environmental, regulations related to
advertising, marketing and the Internet, consumer protection,
pricing (including disaster or emergency declaration pricing
statutes), product liability, compliance or safety, trade and
export compliance, general commercial disputes, or privacy and
cybersecurity matters; investigations, inquiries, audits and
changes in laws and regulations; failure to comply with laws,
regulations and standards, including new or stricter environmental
laws or regulations; government contract matters; the impact of any
government shutdown; disruption or breaches of information
technology or data security systems involving Grainger or third
parties on which Grainger depends; general industry, economic,
market or political conditions; general global economic conditions
including tariffs and trade issues and policies; foreign currency
exchange rate fluctuations; market volatility, including price and
trading volume volatility or price declines of Grainger's common
stock; commodity price volatility; facilities disruptions or
shutdowns; higher fuel costs or disruptions in transportation
services; outbreaks of pandemic disease or viral contagions;
natural or human induced disasters, extreme weather and other
catastrophes or conditions; effects of climate change; failure to
execute on our efforts and programs related to environmental,
social and governance matters; competition for, or failure to
attract, retain, train, motivate and develop executives and key
employees; loss of key members of management or key employees; loss
of operational flexibility and potential for work stoppages or
slowdowns if employees unionize or join a collective bargaining
arrangement; changes in effective tax rates; changes in credit
ratings or outlook; Grainger's incurrence of indebtedness or
failure to comply with restrictions and obligations under its debt
agreements and instruments; and other factors that can be found in
our filings with the Securities and Exchange Commission, including
our most recent periodic reports filed on Form 10-K and Form 10-Q,
which are available on our Investor Relations website.
Forward-looking statements are given only as of the date of this
communication and we disclaim any obligation to update or revise
any forward-looking statement, whether as a result of new
information, future events or otherwise, except as required by
law.
W.W. Grainger, Inc.
and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS (In millions of dollars, except for share and per
share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net sales
|
$ 4,312
|
|
$ 4,182
|
|
$ 8,547
|
|
$ 8,273
|
Cost of goods sold
|
2,618
|
|
2,538
|
|
5,185
|
|
4,995
|
Gross profit
|
1,694
|
|
1,644
|
|
3,362
|
|
3,278
|
Selling, general and
administrative expenses
|
1,045
|
|
983
|
|
2,044
|
|
1,937
|
Operating earnings
|
649
|
|
661
|
|
1,318
|
|
1,341
|
Other (income) expense:
|
|
|
|
|
|
|
|
Interest expense
– net
|
20
|
|
24
|
|
41
|
|
48
|
Other – net
|
(7)
|
|
(8)
|
|
(14)
|
|
(14)
|
Total other
expense – net
|
13
|
|
16
|
|
27
|
|
34
|
Earnings before income taxes
|
636
|
|
645
|
|
1,291
|
|
1,307
|
Income tax
provision
|
146
|
|
155
|
|
304
|
|
309
|
Net earnings
|
490
|
|
490
|
|
987
|
|
998
|
Less net earnings
attributable to noncontrolling interest
|
20
|
|
20
|
|
39
|
|
40
|
Net earnings
attributable to W.W. Grainger, Inc.
|
$
470
|
|
$
470
|
|
$
948
|
|
$ 958
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$ 9.54
|
|
$ 9.32
|
|
$ 19.20
|
|
$ 18.98
|
Diluted
|
$ 9.51
|
|
$ 9.28
|
|
$ 19.13
|
|
$ 18.89
|
Weighted average number
of shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
49.0
|
|
50.1
|
|
49.1
|
|
50.2
|
Diluted
|
49.2
|
|
50.3
|
|
49.3
|
|
50.4
|
W.W. Grainger, Inc.
and Subsidiaries CONDENSED CONSOLIDATED BALANCE
SHEETS (In millions of dollars)
(Unaudited)
|
|
|
As of
|
|
(Unaudited)
|
|
|
Assets
|
June 30,
2024
|
|
December 31,
2023
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
769
|
|
$
660
|
Accounts receivable
(less allowances for credit
losses of $37 and $35, respectively)
|
2,344
|
|
2,192
|
Inventories –
net
|
2,169
|
|
2,266
|
Prepaid expenses and
other current assets
|
239
|
|
156
|
Total current
assets
|
5,521
|
|
5,274
|
Property, buildings and
equipment – net
|
1,667
|
|
1,658
|
Goodwill
|
360
|
|
370
|
Intangibles –
net
|
237
|
|
234
|
Operating lease
right-of-use
|
396
|
|
429
|
Other assets
|
171
|
|
182
|
Total
assets
|
$
8,352
|
|
$
8,147
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Current
maturities
|
$
505
|
|
$
34
|
Trade accounts
payable
|
1,106
|
|
954
|
Accrued compensation
and benefits
|
254
|
|
327
|
Operating lease
liability
|
72
|
|
71
|
Accrued
expenses
|
424
|
|
397
|
Income taxes
payable
|
36
|
|
48
|
Total current
liabilities
|
2,397
|
|
1,831
|
Long-term
debt
|
1,783
|
|
2,266
|
Long-term operating
lease liability
|
352
|
|
381
|
Deferred income taxes
and tax uncertainties
|
117
|
|
104
|
Other non-current
liabilities
|
116
|
|
124
|
Shareholders'
equity
|
3,587
|
|
3,441
|
Total liabilities and
shareholders' equity
|
$
8,352
|
|
$
8,147
|
W.W. Grainger,
Inc. and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (In millions of dollars)
(Unaudited)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023(1)
|
|
2024
|
|
2023(1)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net
earnings
|
$
490
|
|
$
490
|
|
$
987
|
|
$
998
|
Adjustments to
reconcile net earnings to net cash
provided by operating activities:
|
|
|
|
|
|
|
|
Provision for credit
losses
|
6
|
|
5
|
|
12
|
|
9
|
Deferred income taxes
and tax uncertainties
|
17
|
|
7
|
|
15
|
|
17
|
Depreciation and
amortization
|
60
|
|
52
|
|
116
|
|
102
|
Non-cash lease
expense
|
20
|
|
21
|
|
41
|
|
38
|
Stock-based
compensation
|
23
|
|
19
|
|
34
|
|
31
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(42)
|
|
(141)
|
|
(205)
|
|
(303)
|
Inventories
|
(5)
|
|
24
|
|
71
|
|
28
|
Prepaid expenses and
other assets
|
43
|
|
19
|
|
(42)
|
|
93
|
Trade accounts
payable
|
(18)
|
|
94
|
|
184
|
|
147
|
Operating lease
liabilities
|
(24)
|
|
(21)
|
|
(47)
|
|
(42)
|
Accrued
liabilities
|
17
|
|
24
|
|
(18)
|
|
(169)
|
Income taxes –
net
|
(169)
|
|
(130)
|
|
(62)
|
|
(28)
|
Other non-current
liabilities
|
(7)
|
|
(13)
|
|
(14)
|
|
(17)
|
Net cash provided by
operating activities
|
411
|
|
450
|
|
1,072
|
|
904
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(76)
|
|
(95)
|
|
(195)
|
|
(193)
|
Proceeds from sale of
assets
|
—
|
|
—
|
|
1
|
|
2
|
Other – net
|
17
|
|
—
|
|
17
|
|
—
|
Net cash used in
investing activities
|
(59)
|
|
(95)
|
|
(177)
|
|
(191)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
debt
|
2
|
|
—
|
|
3
|
|
6
|
Payments of
debt
|
—
|
|
—
|
|
(17)
|
|
(18)
|
Proceeds from stock
options exercised
|
1
|
|
5
|
|
10
|
|
28
|
Payments for employee
taxes withheld from stock awards
|
(30)
|
|
(26)
|
|
(40)
|
|
(29)
|
Purchases of treasury
stock
|
(244)
|
|
(171)
|
|
(512)
|
|
(313)
|
Cash dividends
paid
|
(101)
|
|
(107)
|
|
(206)
|
|
(194)
|
Other – net
|
—
|
|
2
|
|
(1)
|
|
(1)
|
Net cash used in
financing activities
|
(372)
|
|
(297)
|
|
(763)
|
|
(521)
|
Exchange rate effect on
cash and cash equivalents
|
(15)
|
|
(4)
|
|
(23)
|
|
(2)
|
Net change in cash and
cash equivalents
|
(35)
|
|
54
|
|
109
|
|
190
|
Cash and cash
equivalents at beginning of period
|
804
|
|
461
|
|
660
|
|
325
|
Cash and cash
equivalents at end of period
|
$
769
|
|
$
515
|
|
$
769
|
|
$
515
|
|
|
(1)
|
Certain
reclassifications have been made to prior year amounts to conform
to the current year presentation of Grainger's Condensed
Consolidated Statements of Cash Flows. The reclassifications had no
impact on previously reported results including net cash
provided
by (used in) operating, investing and financing activities for the
three and six months ended June 30, 2023.
|
SUPPLEMENTAL INFORMATION - RECONCILIATION OF
GAAP TO NON-GAAP
FINANCIAL MEASURES (Unaudited)
The Company supplements the reporting of financial information
determined under U.S. generally accepted accounting principles
(GAAP) with the non-GAAP financial measures as defined below. The
Company believes these non-GAAP financial measures provide
meaningful information to assist investors in understanding
financial results and assessing prospects for future performance as
they provide a better baseline for analyzing the ongoing
performance of its business by excluding items that may not be
indicative of core operating results.
Basis of presentation
The Company has a controlling ownership interest in MonotaRO, which
is part of our Endless Assortment segment. MonotaRO's results are
fully consolidated, reflected in U.S. GAAP, and reported one-month
in arrears. Results will differ from MonotaRO's externally reported
financials which follow Japanese GAAP.
Adjusted gross profit, adjusted SG&A, adjusted operating
earnings, adjusted operating margin, adjusted net earnings,
adjusted diluted EPS
Exclude certain non-recurring items, like restructuring charges,
asset impairments, gains and losses associated with business
divestitures and other non-recurring, infrequent or unusual gains
and losses (together referred to as "non-GAAP adjustments"), from
the Company's most directly comparable reported U.S. GAAP figures
(reported gross profit, SG&A, operating earnings, net earnings
and EPS).The Company believes these non-GAAP adjustments provide
meaningful information to assist investors in understanding
financial results and assessing prospects for future performance as
they provide a better baseline for analyzing the ongoing
performance of its business by excluding items that may not be
indicative of core operating results.
Free cash flow (FCF)
Calculated using total cash provided by operating activities less
capital expenditures. The Company believes the presentation of FCF
allows investors to evaluate the capacity of the Company's
operations to generate free cash flow.
Daily sales
Refers to sales for the period divided by the number of U.S.
selling days for the period.
Daily, constant currency sales
Refers to daily sales adjusted for changes in foreign currency
exchange rates.
Daily, organic constant currency sales
Refers to daily sales excluding the sales of certain divested
businesses in the comparable prior year period and changes in
foreign currency exchange rates.
Foreign currency exchange
Calculated by dividing current period local currency daily sales by
current period average exchange rate and subtracting the current
period local currency daily sales divided by the prior period
average exchange rate.
U.S. selling days:
2023: Q1-64, Q2-64, Q3-63, Q4-63, FY-254
2024: Q1-64, Q2-64, Q3-64, Q4-64, FY-256
2025: Q1-63, Q2-64, Q3-64, Q4-64, FY-255
As non-GAAP financial measures are not standardized, it may not
be possible to compare these measures with other companies'
non-GAAP measures having the same or similar names. These non-GAAP
measures should not be considered in isolation or as a substitute
for reported results. These non-GAAP measures reflect an additional
way of viewing aspects of operations that, when viewed with GAAP
results, provide a more complete understanding of the business.
This press release also includes certain non-GAAP forward-looking
information. The Company believes that a quantitative
reconciliation of such forward-looking information to the most
comparable financial measure calculated and presented in accordance
with GAAP cannot be made available without unreasonable efforts. A
reconciliation of these non-GAAP financial measures would require
the Company to predict the timing and likelihood of future
restructurings, asset impairments, and other charges. Neither of
these forward-looking measures, nor their probable significance,
can be quantified with a reasonable degree of accuracy.
Accordingly, a reconciliation of the most directly comparable
forward-looking GAAP measures is not provided.
The reconciliations provided below reconciles GAAP financial
measures to non-GAAP financial measures used in this release: daily
sales; daily, organic constant currency sales; free cash flow;
adjusted operating margin; and adjustments reflected in the
consolidated statements of earnings.
Sales growth for the
three months ended June 30, 2024 (percent change compared
to prior year period) (unaudited)
|
|
|
Q2
2024
|
|
Total
Company
|
High-Touch Solutions
- N.A.
|
Endless
Assortment
|
Reported
sales
|
3.1 %
|
3.1 %
|
3.3 %
|
Day impact
|
— %
|
— %
|
— %
|
Daily
sales(1)
|
3.1 %
|
3.1 %
|
3.3 %
|
Business
divestiture(2)
|
0.5 %
|
0.6 %
|
— %
|
Foreign currency
exchange(3)
|
1.5 %
|
— %
|
8.4 %
|
Daily, organic constant
currency
sales
|
5.1 %
|
3.7 %
|
11.7 %
|
|
|
(1)
|
Based on U.S.
selling days, there were 64 selling days in Q2 2024 and Q2
2023.
|
(2)
|
Reflects the
divestiture of Grainger's subsidiary, E & R Industrial Sales,
Inc., completed in the fourth quarter of 2023.
|
(3)
|
Excludes the impact of
year-over-year foreign currency exchange rate
fluctuations.
|
Free cash flow (FCF)
for the three months ended June 30, 2024 (in millions of
dollars) (unaudited)
|
|
|
Q2
2024
|
Net cash flows provided
by operating activities
|
$
411
|
Capital
expenditures
|
(76)
|
Free cash
flow
|
$
335
|
Income statement
adjustments for the three months ended June 30, 2024 and
2023 (in millions of
dollars) (unaudited)
|
|
|
Q2
2024
|
|
Reported
|
|
Adjusted(2)
|
|
Reported
|
|
Adjusted
|
|
Reported
|
|
Adjustment(1)
|
|
Adjusted
|
|
% of Net
sales
|
|
Y/Y
|
Earnings
reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A
|
$
(1,045)
|
|
$
16
|
|
$
(1,029)
|
|
24.2 %
|
|
23.9 %
|
|
6.3 %
|
|
4.7 %
|
Operating
earnings
|
649
|
|
16
|
|
665
|
|
15.1
|
|
15.4
|
|
(1.8)
|
|
0.6
|
Other expense —
net
|
(13)
|
|
—
|
|
(13)
|
|
0.3
|
|
0.3
|
|
(18.8)
|
|
(18.8)
|
Income tax
provision(3)
|
(146)
|
|
(4)
|
|
(150)
|
|
3.4
|
|
3.4
|
|
(5.8)
|
|
(3.2)
|
Net earnings
|
490
|
|
12
|
|
502
|
|
11.4
|
|
11.7
|
|
—
|
|
2.4
|
Noncontrolling
interest(4)
|
(20)
|
|
—
|
|
(20)
|
|
0.5
|
|
0.5
|
|
—
|
|
—
|
Net earnings
attributable
to W.W. Grainger, Inc.
|
$ 470
|
|
$
12
|
|
$ 482
|
|
10.9 %
|
|
11.2 %
|
|
— %
|
|
2.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per
share:
|
$ 9.51
|
|
0.25
|
|
$ 9.76
|
|
|
|
|
|
2.5 %
|
|
5.2 %
|
|
Q2
2023
|
|
Reported
|
|
Adjusted(2)
|
|
Reported
|
|
Adjusted
|
|
Reported
|
|
Adjustment(1)
|
|
Adjusted
|
|
% of Net
sales
|
|
Y/Y
|
Earnings
reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A
|
$ (983)
|
|
$
—
|
|
$ (983)
|
|
23.5 %
|
|
23.5 %
|
|
8.4 %
|
|
8.4 %
|
Operating
earnings
|
661
|
|
—
|
|
661
|
|
15.8
|
|
15.8
|
|
23.5
|
|
23.5
|
Other expense —
net
|
(16)
|
|
—
|
|
(16)
|
|
0.4
|
|
0.4
|
|
(5.1)
|
|
(5.1)
|
Income tax
provision(3)
|
(155)
|
|
—
|
|
(155)
|
|
3.7
|
|
3.7
|
|
20.1
|
|
20.1
|
Net earnings
|
490
|
|
—
|
|
490
|
|
11.7
|
|
11.7
|
|
25.9
|
|
25.9
|
Noncontrolling
interest(4)
|
(20)
|
|
—
|
|
(20)
|
|
0.5
|
|
0.5
|
|
12.1
|
|
12.1
|
Net earnings
attributable
to W.W. Grainger, Inc.
|
$ 470
|
|
$
—
|
|
$ 470
|
|
11.2 %
|
|
11.2 %
|
|
26.5 %
|
|
26.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per
share:
|
$ 9.28
|
|
—
|
|
$ 9.28
|
|
|
|
|
|
29.1 %
|
|
29.1 %
|
|
|
(1)
|
Reflects restructuring
costs incurred in the second quarter of 2024 of $15M and $1M in
Grainger's HTS-N.A. segment and Other businesses,
respectively. There were no non-GAAP adjustments for the second
quarter of 2023.
|
(2)
|
Calculated on the basis
of reported net sales for the second quarter of 2024 and
2023.
|
(3)
|
Reflects a tax benefit
related to the restructuring costs incurred in the second quarter
of 2024. The Company's reported and adjusted effective tax
rates
were 22.9% and 24.0% for the second quarter of 2024 and 2023,
respectively.
|
(4)
|
The Company has a
controlling ownership interest in MonotaRO, with the residual
representing noncontrolling interest.
|
View original
content:https://www.prnewswire.com/news-releases/grainger-reports-results-for-the-second-quarter-2024-302211655.html
SOURCE W.W. Grainger, Inc.