After a strong finish to 2022, Grainger maintained that momentum in 2023’s first quarter, according to its latest earnings report.
After a strong finish to fiscal 2022, Grainger has maintained that momentum in 2023’s first quarter.
On April 27, the Lake Forest, Illinois-based industrial distributor reported 1Q sales of $4.1 billion, a 12.2% increase year-over-year and up 14.5% on a daily, constant-currency basis. Sales were up from $3.8 billion in 4Q, though 1Q sales growth of 12.2% slowed slightly from 13.2% in 4Q.
Grainger generated operating earnings of $680 million, up 27.4% year-over-year, with operating margin of 16.6%, an increase of 200 basis points from a year ago. Diluted earnings per share were $9.61, a 36% increase year-over-year. Gross profit margin was 39.9%, up 200 basis points year-over-year.
Daily sales in Grainger’s High-Touch Solutions N.A. segment were up 14.5% compared to 1Q 2022, primarily due to strong price realization and continued volume growth, the company said. The segment’s gross profit margin expanded by 195 basis points year-over-year in 1Q, benefiting from freight and supply chain efficiencies and continued favorable product mix.
Grainger’s daily sales in its Endless Assortment segment increased 3.8% year-over-year and were up 14% on a daily, constant-currency basis. Gross profit margin for the Endless Assortment segment expanded by 140 basis points in 1Q, driven by strong price realization, continued freight efficiencies and favorable business unit mix.
Revenue growth in 1Q was driven by core small business growth with new and repeat customers at Zoro U.S., as well as new customer acquisition, repeat business and enterprise customer growth at MonotaRO, Grainger said. 1Q revenue growth at MonotaRO was negatively impacted by winter weather and a slower return to work after the New Year holiday.
“The team continues to perform well amidst a resilient demand environment,” Grainger Chairman and CEO D.G. Macpherson said in a news release. “Both segments delivered strong growth and expanded margins, while we continued to invest in our growth engines and provide exceptional customer service. Given the strong, profitable growth in the quarter, we are raising our earnings outlook for the full year 2023.”
Grainger has updated its full-year outlook for 2023, including daily sales growth of 7% to 11%.
Grainger ranked as both the No. 1 Industrial Distributor and No. 1 MRO Industrial Distributor on MDM’s 2022 Top Distributors list.
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Brad Star is an Associate Editor at MDM, having joined the company in August 2022. He spent most of the previous two years as a Business Reporter for USA-Today Network-Wisconsin’s Appleton Post-Crescent, writing its Buzz column that covered local retail and consumer service businesses in the Fox Cities. Star has a degree in economics from Beloit College.
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