W.W. Grainger, Inc., reported a 4 percent sales increase and record earnings per share (EPS) of $2.94 for the first quarter of 2013, compared to the same period in 2012. The Chicago-based supplier of maintenance, repair and operating products posted $2.3 billion in sales during the first quarter (compared to $2.2 billion during the same period last year).
Grainger’s net earnings for the quarter increased 13 percent to $212 million versus $188 million in 2012. Earnings per share of $2.94 increased 14 percent versus $2.57 in 2012. Because there were 63 selling days in the quarter (one less than in 2012), Grainger’s sales on a daily basis increased 6 percent.
“We are encouraged by the solid start to the year, despite facing difficult comparisons with 2012,” said Jim Ryan, Grainger’s chairman, president, and CEO in a press release. “Our continued strong performance puts us in a position to further accelerate our growth spending to extend our lead in the MRO industry.”
Grainger’s gross profit margin increased 0.8 percentage points to 45.2 percent versus 44.4 percent in the 2012 first quarter, primarily driven by the U.S. segment. Company operating expenses in the quarter increased 3 percent (including an incremental $22 million in spending to fund the company’s growth programs), and operating earnings of $343 million for the 2013 first quarter increased 13 percent versus the prior year.
Grainger’s operating cash flow was $176 million in the 2013 first quarter versus $106 million in the 2012 first quarter. Cash flow in the 2013 quarter benefited from higher earnings, lower inventory purchases and a lower management incentive payout versus the prior year, the company reported.
Sales for Grainger’s U.S. segment increased 4 percent in the 2013 first quarter versus the prior year. Operating earnings for the segment increased 11 percent in the quarter driven by the 4 percent sales growth, higher gross profit margins and positive expense leverage. Gross profit margins for the quarter increased 0.8 percentage points driven by price inflation exceeding product cost inflation and strong growth of private label products, partially offset by negative selling mix.
First quarter sales for Acklands-Grainger in Canada increased 4 percent (6 percent on a daily basis) and were led by strong growth to customers in the construction, commercial, forestry, oil and gas and light manufacturing end markets, according to the company. Grainger’s sales for other businesses – namely located in Asia, Europe and Latin America – increased 4 percent for the 2013 first quarter (6 percent on a daily basis) versus the prior year.
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