Grainger Reports Results For The 2020 Second Quarter

Second Quarter Financial Highlights:

  • Sales of $2.8 billion with significant share gain in the U.S.
  • Generated reported operating earnings of $205 million; adjusted operating earnings of $315 million
  • Over $75 million in sequential SG&A cost savings
  • Generated $232 million in operating cash flow and returned $86 million to shareholders through dividends

Grainger (NYSE: GWW) today reported results for the 2020 second quarter including sales of $2.8 billion in the quarter driven by significant share gains in the U.S. segment. We estimate the MRO market declined between 14% and 15% in the U.S.

“We remain grounded in our priorities of serving our customers well, helping our customers and team members focus on safety and well-being, and maintaining a strong financial position even in times like these,” said DG Macpherson, Chairman and Chief Executive Officer. “During the second quarter, Grainger performed well. We gained significant share in a down market, fueled by elevated levels of pandemic product sales and improving trends in non-pandemic product sales throughout the quarter. On the cost side, we achieved significant leverage and generated over $75 million of sequential cost reductions contributing to strong operating cash flow and allowing continued investment in the business. The work our team members are doing resonates with our customers and communities and positions Grainger to support our customers and deliver results even in this uncertain time.”

Daily sales for the quarter decreased 1.9% as compared to the 2019 second quarter. The sales decline was driven by volume decreases including unfavorable product mix from heightened levels of pandemic-related sales, as well as decreased volume of non-pandemic products. Foreign exchange had a very small, negative impact of 10 basis points in the quarter. The second quarter of 2019 and 2020 had the same number of selling days.

Reported and adjusted gross profit margin for the second quarter of 2020 was 35.8%. This compares to reported and adjusted gross profit margin in the second quarter of 2019 of 38.7%. The unfavorable variance continues to be driven primarily by pandemic-related impacts, including product mix and heightened freight expense, that were particularly noticeable in our U.S. segment. The continued business unit mix impact from the faster growth in our lower-margin endless assortment businesses also contributed to the variance.

Reported operating earnings for the 2020 second quarter of $205 million were down 46% versus $380 million in the 2019 second quarter. On an adjusted basis, operating earnings for the quarter of $315 million were down 16% versus $377 million in the 2019 second quarter. During the second quarter, the company recorded a $109 million pretax loss from the sale of the Fabory business, which was the largest contributor to the difference between reported and adjusted operating earnings.
more detail at: https://pressroom.grainger.com/news/press-release-details/2020/Grainger-Reports-Results-For-The-2020-Second-Quarter/default.aspx

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