Grainger’s Q4: Sales up 14%, 2012 target is $9 billion

With $2.1 billion in Q4/11 sales (up 14% over Q4/10), Grainger finished 2011 with $8.1 billion—up 12% from one year earlier. By month, Grainger’s U.S. sales rose 9% in each of October and November, and 5% in December, compared to year-earlier numbers for the same months.

For this year, the company’s forecast is a sales gain of 10% to 14%. On the high end, Grainger’s 2012 sales would be more than $9.2 billion.

More impressive, perhaps, was the company’s simple statement of numbers for the past year. The company said,  “In 2011, Grainger introduced more than 80,000 new products, transacted more than $2 billion in sales through eCommerce and added more than 1,300 net new jobs, while delivering a total shareholder return of 38 percent.”

Additionally, the company paid out $181 million to shareholders last year in the form of dividends; it expended $151 million to buy back its own stock on the open market (roughly 1 million shares).

Also revealed in the company’s quarterly public disclosures:

  • 27 U.S. branches closed in Q4, one opened. That brings the total to 368. A check of the company’s 2007 10-K (annual report) filing with the SEC showed 434 branches in the 50 states.
  • Grainger has hired and is hiring more sales reps. The company said it was now hiring its “6th wave of Territory Sales Representatives or TSRs, and now have more than 500 of these new sales representatives calling on customers across the United States.”

Above: Graphic on the company’s expansion of “territory sales reps” from a Nov. 15, 2011 analyst meeting presentation from Grainger executives.

  • Sales notes:
    • U.S. segment sales made up 77% of the company’s 2011 total.
    • A breakdown of Q4 sales, as provided in a transcript of the company’s broadcast-only Q4 analyst conference call, revealed, “Heavy Manufacturing was up in the low double digits. Commercial and Retail were up in the high single digits. Light Manufacturing and Government were up in the mid single digits. Contractor was down in the low single digits…”
    • January 2012, in a glimpse: “With five selling days left in the month, daily sales growth in January is trending above December and slightly above the high-end of our 10% to 14% range for the full year.”

One final note, not necessarily made by Grainger in its release or podcast—the company’s (not-yet-audited) gross margin for 2011 came in at 43.5%, up from 2010’s 41.8%.

Perhaps more stunning are the raw numbers. Grainger increased sales by $896 million over 2010, while at the same time posting a gain of $505 million in gross profit.

A podcast, news release and presentation of Grainger’s earnings is available on the company’s website.

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