W.W. Grainger, Inc. (GWW) on April 18, 2016 reported results for the 2016 first quarter ended March 31, 2016. Sales of $2.5 billion increased 3 percent versus $2.4 billion in the first quarter of 2015. There were 64 selling days in the 2016 first quarter, one more than the 2015 first quarter. On a daily basis, sales in the quarter increased 1 percent versus the prior year. Net earnings for the quarter of $187 million were down 12 percent versus $211 million in 2015. Earnings per share of $2.98 declined 3 percent versus $3.07 in 2015.
“Revenue and share gains are tracking as we expected given the tough economic environment,” said Chairman, President and Chief Executive Officer Jim Ryan. “In our U.S. business, share gains with large and small businesses continue to outpace our performance with medium-sized customers. We continue to see price and gross margin pressure driven primarily by the low inflation economic environment and faster growth from lower gross margin customers. At the same time, we have reduced our operating expenses to offset some of the gross margin decline. In early February, we reached a significant milestone, successfully implementing SAP in Canada. We now have our North American business running on one platform, which will drive better service and increased productivity over time. In addition, I continue to be very pleased with the strong growth of our single channel businesses.” Ryan concluded, “Despite the current short-term uncertainty, we will continue to invest in the business to drive long term results.”
The company also narrowed its 2016 sales and earnings per share guidance for the year and now expects sales growth of 0 to 6 percent and earnings per share of $11.00 to $12.80. The company’s previous 2016 guidance, communicated on January 26, 2016, was sales growth of -1 to 7 percent and earnings per share of $10.80 to $13.00.
W.W. Grainger, Inc. earnings per share showed an increasing trend of 1.1% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 1295%.Analysts project EPS growth over the next 5 years at 5.25%. It has EPS annual growth over the past 5 fiscal years of 10.8% when sales grew 6.8. It reported 2.7% sales growth, and -3% EPS decline in the last quarter.
The stock is trading at $228.35, up 30.59% from 52-week low of $176.85. The stock trades down -5.12% from its peak of $246 and -0.59% below the consensus price target of $227. Its volume clocked up at 0.73 million shares which is higher than the average volume of 0.59 million shares. Its market capitalization currently stands at $13.85B.
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