Distributors

Grainger Reports 4Q and Full Year 2024 Results

Grainger Reports 4Q and Full Year 2024 Results

CHICAGO — Grainger (NYSE: GWW) today reported results for the fourth quarter and full year 2024. Sales of $4.2 billion in the fourth quarter 2024 increased 5.9%, or 4.7% on a daily, organic constant currency basis versus the fourth quarter 2023. For the full year, sales of $17.2 billion increased 4.2%, or 4.7% on a daily, organic constant currency basis compared to the prior year.

Fourth Quarter 2024 Highlights

  • Delivered sales of $4.2 billion, up 5.9%, or 4.7% on a daily, organic constant currency basis
  • Achieved operating margin of 15.0%, up 110 basis points on a reported basis, or up 40 basis points on an adjusted basis
  • Increased diluted EPS to $9.71, up 23.1% on a reported basis, or up 16.6% on an adjusted basis

Full Year 2024 Highlights

  • Grew sales to $17.2 billion, up 4.2%, or 4.7% on a daily, organic constant currency basis
  • Realized reported operating margin of 15.4%, or 15.5% on an adjusted basis, down 20 basis points
  • Increased diluted EPS by 6.8% to $38.71 on a reported basis, or by 6.2% to $38.96 on an adjusted basis
  • Produced $2.1 billion in operating cash flow and returned $1.6 billion to Grainger shareholders through dividends and share repurchases

“Amidst a stable, yet muted demand environment throughout 2024, our team delivered strong performance by staying focused on what matters and delivering an outstanding customer experience. Across both our High-Touch Solutions and Endless Assortment segments, we deepened our customer relationships and advanced our capabilities, all while delivering on our commitments to shareholders,” said D.G. Macpherson, Chairman and CEO. “Looking to 2025, we remain committed to our purpose, We Keep the World Working®, as we continue to provide exceptional service for our customers.”

2024 Financial Summary

($ in millions), except per share amount

Q4 2024

Q4 2024

FY 2024

FY 2024

Change vs. Prior

(Fav. vs. (Unfav.))

Change vs. Prior

(Fav. vs. (Unfav.))

Reported

Adjusted

Reported

Adjusted(1)

Reported

Adjusted(2)

Reported

Adjusted(2)

Net Sales

$4,233

$4,233

5.9 %

5.9 %

$17,168

$17,168

4.2 %

4.2 %

Gross Profit

$1,676

$1,676

7.2 %

7.2 %

$6,758

$6,758

4.0 %

4.0 %

Operating Earnings

$633

$633

13.6 %

8.6 %

$2,637

$2,653

2.8 %

2.4 %

Net Earnings
Attributable to W.W.
Grainger, Inc.

$475

$475

20.3 %

13.9 %

$1,909

$1,921

4.4 %

3.8 %

Diluted Earnings Per
Share

$9.71

$9.71

23.1 %

16.6 %

$38.71

$38.96

6.8 %

6.2 %

Gross Profit Margin

39.6 %

39.6 %

50 bps

50 bps

39.4 %

39.4 %

— bps

— bps

Operating Margin

15.0 %

15.0 %

110 bps

40 bps

15.4 %

15.5 %

(20) bps

(20) bps

Effective Tax Rate

20.1 %

20.1 %

370 bps

340 bps

23.0 %

23.0 %

90 bps

80 bps

(1)

Reflects the adjustment for the loss on divestiture of Grainger’s subsidiary, E&R Industrial Sales, Inc., reported in the Company’s HTS-N.A. segment completed in the fourth quarter of 2023.
(2)
Reflects the adjustment for restructuring costs incurred in Grainger’s HTS-N.A. segment and Other businesses in the second quarter of 2024 and the loss on divestiture of Grainger’s subsidiary, E&R Industrial Sales Inc., reported in the Company’s HTS-N.A. segment completed in the fourth quarter of 2023.
See the supplemental information of this release for further information regarding the Company’s non-GAAP measures including reconciliations to the most directly comparable GAAP measure. 

Revenue
For the fourth quarter 2024, total Company sales were up 5.9%, or up 4.2% on a daily basis compared to the fourth quarter 2023. Normalizing for the impact of foreign currency exchange and the divestiture of the Company’s subsidiary, E & R Industrial Sales, Inc., sales on a daily, organic constant currency basis were up 4.7% versus the fourth quarter 2023.

In the High-Touch Solutions N.A. segment, sales were up 4.0%, or 3.0% on a daily, organic constant currency basis versus the fourth quarter 2023 driven by continued growth across all geographies. In the Endless Assortment segment, sales were up 15.1%, or 13.2% on a daily, constant currency basis versus the prior year quarter. Growth was driven by core B2B customers across the segment as well as enterprise customer growth at MonotaRO.

For the full year 2024, total Company sales increased 4.2% versus the full year 2023. Daily sales on an organic, constant currency basis increased 4.7% versus the prior year driven by growth in both segments.

Gross Profit Margin
For the fourth quarter 2024, total Company gross profit margin was 39.6%, up 50 basis points compared to the fourth quarter 2023.

In the High-Touch Solutions N.A. segment, gross margin increased 90 basis points compared to the fourth quarter 2023 driven by a lap of year-end inventory cost adjustments from the prior year period, as well as slight freight and mix favorability in the current year. In the Endless Assortment segment, gross margin declined by 10 basis points versus the fourth quarter 2023.

For the full year 2024, total Company gross profit margin was 39.4%, flat versus the prior year as various factors offset.

Earnings
For the fourth quarter 2024, reported operating earnings for the total Company were $633 million, up 13.6% over the fourth quarter 2023. Reported operating margin was 15.0%, a 110 basis point increase compared to the prior year quarter. On an adjusted basis, which excludes the impacts from the divestiture of the Company’s subsidiary, E & R Industrial Sales, Inc., fourth quarter 2024 operating earnings were up 8.6% and operating margin was up 40 basis points over the fourth quarter 2023. The increase in adjusted operating margin was driven by High-Touch Solutions N.A. gross margin favorability coupled with strong expense leverage in Endless Assortment.

Diluted EPS for the fourth quarter 2024 was $9.71, up 23.1% on a reported basis, or up 16.6% on an adjusted basis versus the prior year quarter. The increase in earnings per share was primarily due to strong operating performance, aided by a lower share count and favorable tax rate versus the fourth quarter 2023.

For the full year 2024, reported operating earnings for the total Company of $2.6 billion were up 2.8% versus the prior year, and resulted in reported operating margin of 15.4%, a decrease of 20 basis points over prior year. On an adjusted basis, 2024 operating earnings of $2.7 billion were up 2.4%, and resulted in adjusted operating margin of 15.5%, a decrease of 20 basis points compared to 2023 as stable gross margin was partially offset by continued demand generation investment.

Diluted EPS for the full year 2024 was $38.71 on a reported basis, up 6.8% versus 2023. On an adjusted basis, 2024 diluted EPS was $38.96, up 6.2% versus the prior year. The increase in earnings per share was due primarily to the strong operating performance in the year, aided by a lower share count and favorable tax rate versus 2023.

Tax Rate
For the fourth quarter 2024, the reported effective tax rate was 20.1% compared to 23.8% in the fourth quarter 2023. On an adjusted basis, the tax rate was 20.1% compared to 23.5% in the prior year quarter.

For the full year 2024, the reported effective tax rate was 23.0% versus 23.9% in 2023. On an adjusted basis, the full year effective tax rate was 23.0% versus 23.8% in the prior year.

The variance for both the fourth quarter and full year reported and adjusted tax rates was primarily driven by the expiration of a statute of limitation period in 2024.

Cash Flow
During the fourth quarter 2024, the Company generated $428 million of cash flow from operating activities as solid net earnings were partially offset by investments in working capital. The Company invested $258 million in capital expenditures which was higher than prior year driven by the purchase of a new bulk warehouse. This resulted in free cash flow for the period of $170 million. During the quarter, the Company returned $562 million to Grainger shareholders through dividends and share repurchases.

For the full year 2024, the Company generated $2.1 billion of cash flow from operating activities as solid net earnings were slightly offset by unfavorable working capital. As compared to 2023, operating cash flow increased $80 million, up 3.9%. The Company invested $541 million in capital expenditures, resulting in free cash flow of $1.6 billion in 2024. During the year, the Company returned $1.6 billion to Grainger shareholders through dividends and share repurchases.

2025 Company Guidance
The Company is providing the following outlook for 2025:

Total Company(1)

2025 Guidance Range

Net Sales

$17.6 – $18.1 billion

Sales growth

2.7% – 5.2%

Daily, constant currency sales growth

4.0% – 6.5%

Gross Profit Margin

39.1% – 39.4%

Operating Margin

15.1% – 15.5%

Diluted Earnings per Share

$39.00 – $41.50

Operating Cash Flow

$2.05 – $2.25 billion

CapEx (cash basis)

$0.45 – $0.55 billion

Share Buyback

$1.15 – $1.25 billion

Effective Tax Rate

~23.8%

Segment Operating Margin

High-Touch Solutions N.A.

17.0% – 17.4%

Endless Assortment

8.5% – 9.0%

(1)

Guidance provided is on an adjusted basis. Daily, constant currency sales growth is adjusted for the impact of one less selling day in 2025 as compared to 2024 and changes in foreign currency exchange. The Company does not reconcile forward-looking non-GAAP financial measures. For further details see the supplemental information of this release.
Tagged with ,

Comment on the story

Your email address will not be published. Required fields are marked *