Grainger (NYSE: GWW) reported sales of $2.5 billion during the second quarter of 2014, up 5 percent compared to the same period in 2013. The company’s net earnings for the quarter decreased 5 percent to $206 million, versus $218 million in 2013. Earnings per share of $2.94 decreased 3 percent versus $3.03 in 2013.
During the quarter, Grainger recorded a $10 million after-tax, or $0.15 per share, charge related to the transition of its employee retirement plan in Europe from a defined benefit plan to a defined contribution plan, while simultaneously transferring the existing defined benefit obligation to a third party.
“We continue to be pleased with the performance of our U.S. business, including our three most recent acquisitions,” said Jim Ryan, president and CEO, in a company press release. “The investments we are making in growth and infrastructure continue to drive share gain, particularly among our large, more complex customers who have fully embraced our value proposition.”
Grainger’s gross profit margin for the quarter decreased by 0.9 percent versus the prior year to 43.1 percent, due primarily to unfavorable mix from the acquired businesses, faster growth with lower gross margin customers and lower gross profit margins from the international businesses. During the quarter, the company made the decision to extend its U.S. ERP system across North America as opposed to the previous plan to run two separate ERP instances. The decision to implement a single ERP instance led to the write-off of $7 million, or $0.06 per share, of capitalized software development costs tied to the multiple instance approach.
Sales for Grainger’s U.S. segment increased 7 percent in the second quarter versus the prior year. Canadian sales decreased 9 percent (in U.S. dollars) and Grainger’s other businesses posted a 14 percent increase over the second quarter of 2013.
For the six months ended June 30, 2014, Grainger posted $4.9 billion in sales for an increase of 5 percent (versus $4.7 billion in the six months ended June 30, 2013). There were 127 selling days in the first six months of 2014, the same number of selling days in 2013. Grainger’s net earnings decreased 2 percent to $423 million versus $429 million in the first half of 2013, and the distributor’s earnings per share for the six months increased 1 percent to $6.00 versus $5.97 for 2013.Tagged with tED