WW GRAINGER INC
For the period ended Sep 30, 2024. Filed Oct 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 31, 2024
GWW$1,440.70-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0000277135-24-000133
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-31.
0000277135-24-000173
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 90 previous paragraphs and 88 current paragraphs.
49 unchanged; 24 reworded; 15 added; 16 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
Income tax expense of $166 million and $159 million represents effective tax rates of 24.8% and 24.4% for the three months ended September 30, 2024 and 2023, respectively.
Current report
Net sales of $3,515 million for the three months ended September 30, 2024 increased $112 million, or 3% on a reported and daily, organic constant currency basis, compared to the same period in 2023. The increase was primarily due to volume.
Current report
Operating earnings of $617 million for the three months ended September 30, 2024 increased $5 million, or 1%, compared to the same period in 2023.
Current report
Gross profit of $233 million for the three months ended September 30, 2024 increased $17 million, or 8%, and gross profit margin of 29.5% decreased 10 basis points compared to the same period in 2023.
Current report
SG&A of $163 million for the three months ended September 30, 2024 increased $2 million, or 1%, compared to the same period in 2023. SG&A leverage improved 140 basis points as sales growth outpaced SG&A expenses driven by occupancy efficiencies compared to the same period in 2023.
Current report
Operating earnings of $70 million for the three months ended September 30, 2024 increased $15 million, or 27%, compared to the same period in 2023.
Current report
Results of Operations – Nine Months Ended September 30, 2024
Current report
Net sales of $12,935 million for the nine months ended September 30, 2024 increased $454 million, or 4%, and on a daily, organic constant currency basis increased 5% compared to the same period in 2023. Both High-Touch
Current report
Net sales of $10,378 million for the nine months ended September 30, 2024 increased $326 million, or 3% on a reported and daily, organic constant currency basis, compared to the same period in 2023. The increase was primarily due to volume.
Current report
Gross profit of $4,328 million for the nine months ended September 30, 2024 increased $115 million, or 3%, and gross profit margin of 41.7% decreased 20 basis points compared to the same period in 2023.
Current report
Operating earnings of $1,818 million for the nine months ended September 30, 2024 decreased $15 million, or 1%, compared to the same period in 2023. Adjusted operating earnings of $1,833 million was the same as the prior year period.
Current report
SG&A of $492 million for the nine months ended September 30, 2024 increased $16 million, or 3%, compared to the same period in 2023. The increase was primarily due to higher marketing expenses in 2024. SG&A leverage increased 40 basis points compared to the same period in 2023.
Current report
Operating earnings of $190 million for the nine months ended September 30, 2024 increased $12 million, or 7% compared to the same period in 2023.
Current report
Net cash used in investing activities was $262 million and $307 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease was due to timing of capital expenditures driven by U.S. supply chain investments in the third quarter of 2024.
Current report
Net cash used in financing activities was $615 million and $839 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease in cash used in financing activities was primarily due to the issuance of long-term debt, which includes $500 million in unsecured senior notes partially offset by higher treasury stock repurchases in the third quarter of 2024.
Removed paragraphs (16)
Previous report
Income tax expense of $146 million and $155 million represents effective tax rates of 22.9% and 24.0% for the three months ended June 30, 2024 and 2023, respectively. Adjusted income tax expense of $150 million represents an adjusted effective tax rate of 22.9%. The decrease in the effective tax rate was primarily due to increased benefits from tax credits compared to the same period in 2023.
Previous report
Net sales of $3,458 million for the three months ended June 30, 2024 increased $103 million, or 3%, and on a daily, organic constant currency basis increased 4% compared to the same period in 2023. The increase was primarily due to volume.
Previous report
Operating earnings of $591 million for the three months ended June 30, 2024 decreased $9 million, or 2%, compared to the same period in 2023. Adjusted operating earnings of $606 million increased $6 million, or 1%.
Previous report
SG&A of $168 million for the three months ended June 30, 2024 increased $9 million, or 6%, compared to the same period in 2023. The increase was due to higher marketing expenses in the second quarter of 2024. SG&A leverage decreased 50 basis points compared to the same period in 2023.
Previous report
Results of Operations – Six Months Ended June 30, 2024
Previous report
Operating earnings of $1,318 million for the six months ended June 30, 2024 decreased $23 million, or 2%, compared to the same period in 2023. Adjusted operating earnings of $1,334 million decreased $7 million, or 1%.
Previous report
Net sales of $6,863 million for the six months ended June 30, 2024 increased $214 million, or 3%, and on a daily, organic constant currency basis increased 4% compared to the same period in 2023. The increase was primarily due to volume.
Previous report
Gross profit of $2,866 million for the six months ended June 30, 2024 increased $71 million, or 3%, and gross profit margin of 41.8% decreased 20 basis points compared to the same period in 2023. The decrease was primarily driven by negative price cost spread due to timing.
Previous report
Operating earnings of $1,201 million for the six months ended June 30, 2024 decreased $20 million, or 2%, compared to the same period in 2023. Adjusted operating earnings of $1,216 million decreased $5 million.
Previous report
Gross profit of $449 million for the six months ended June 30, 2024 increased $11 million, or 3%, and gross profit margin of 29.4% decreased 30 basis points compared to the same period in 2023. The decrease was driven by unfavorable product mix, partially offset by freight efficiencies.
Previous report
SG&A of $329 million for the six months ended June 30, 2024 increased $14 million, or 4%, compared to the same period in 2023. The increase was primarily due to higher marketing expenses in 2024. SG&A leverage decreased 20 basis points compared to the same period in 2023.
Previous report
Operating earnings of $120 million for the six months ended June 30, 2024 decreased $3 million, or 2% compared to the same period in 2023.
Previous report
Restructuring Actions
Previous report
In the second quarter of 2024, the Company recorded restructuring charges in SG&A of $15 million in the High-Touch Solutions N.A. segment and $1 million in Grainger's Other businesses. The charges consisted primarily of employee severance and benefit costs. The Company does not expect these actions to have a material effect on its future results of operations.
Previous report
Net cash used in investing activities was $177 million and $191 million for the six months ended June 30, 2024 and 2023, respectively.
Previous report
Net cash used in financing activities was $763 million and $521 million for the six months ended June 30, 2024 and 2023, respectively. The increase was primarily due to higher treasury stock purchases compared to the prior year period.
Reworded paragraphs (24)
Previous wording
Net sales of $4,312 million for the three months ended June 30, 2024 increased $130 million, or 3%, and on a daily, organic constant currency basis net sales increased 5% compared to the same period in 2023. Both High-Touch Solutions N.A. and the Endless Assortment segments contributed to sales growth in the second quarter of 2024. For further discussion on the Company's net sales, see the Segment Analysis section below.
Current wording
Net sales of $4,388 million for the three months ended September 30, 2024 increased $180 million, or 4% on a reported and daily, organic constant currency basis, compared to the same period in 2023. Both High-Touch Solutions N.A. and the Endless Assortment segments contributed to sales growth in the third quarter of 2024. For further discussion on the Company's net sales, see the Segment Analysis section below.
Previous wording
Gross profit of $1,694 million for the three months ended June 30, 2024 increased $50 million, or 3%. Gross profit margin was 39.3% for both the second quarter of 2024 and 2023. For further discussion on the Company's gross profit, see the Segment Analysis section below.
Current wording
Gross profit of $1,720 million for the three months ended September 30, 2024 increased $65 million, or 4%, and gross profit margin of 39.2% decreased 10 basis points compared to the same period in 2023. For further discussion on the Company's gross profit, see the Segment Analysis section below.
Previous wording
Selling, general and administrative (SG&A) expenses of $1,045 million for the three months ended June 30, 2024 increased $62 million, or 6%, compared to the same period in 2023. Adjusted SG&A of $1,029 million increased $46 million, or 5% driven by higher marketing and payroll and benefit expenses in the second quarter of 2024. Adjusted SG&A leverage decreased 40 basis points compared to the same period in 2023.
Current wording
Selling, general and administrative (SG&A) expenses of $1,034 million for the three months ended September 30, 2024 increased $46 million, or 5%, compared to the same period in 2023. The increase was primarily due to higher marketing and payroll and benefit expenses in the third quarter of 2024. SG&A leverage decreased 20 basis points compared to the same period in 2023.
Previous wording
Operating earnings of $649 million for the three months ended June 30, 2024 decreased $12 million, or 2%, compared to the same period in 2023. Adjusted operating earnings of $665 million increased $4 million, or 1%, due to higher gross profit dollars, partially offset by increased SG&A expenses in the second quarter of 2024.
Current wording
Operating earnings of $686 million for the three months ended September 30, 2024 increased $19 million, or 3%, compared to the same period in 2023. The increase was due to higher gross profit dollars, partially offset by increased SG&A expenses in the third quarter of 2024.
Previous wording
Diluted earnings per share was $9.51 and adjusted diluted earnings per share was $9.76 for the three months ended June 30, 2024. On an adjusted basis, this was an increase of 5.2% compared to $9.28 for the same period in 2023.
Current wording
Diluted earnings per share was $9.87 for the three months ended September 30, 2024, an increase of 5% compared to $9.43 for the same period in 2023.
Previous wording
Gross profit of $1,443 million for the three months ended June 30, 2024 increased $45 million, or 3%. Gross profit margin was 41.7% for both the second quarter of 2024 and 2023.
Current wording
Gross profit of $1,462 million for the three months ended September 30, 2024 increased $44 million, or 3%. Gross profit margin of 41.6% decreased 10 basis points compared to the same period in 2023.
Previous wording
SG&A of $852 million for the three months ended June 30, 2024 increased $54 million, or 7%, compared to the same period in 2023. Adjusted SG&A of $837 million increased $39 million, or 5%, primarily due to higher marketing and occupancy expenses in the second quarter of 2024. Adjusted SG&A leverage decreased 40 basis points compared to the same period in 2023.
Current wording
SG&A of $845 million for the three months ended September 30, 2024 increased $39 million, or 5%, compared to the same period in 2023. The increase was primarily due to higher marketing and payroll and benefit expenses. SG&A leverage decreased 30 basis points.
Previous wording
Net sales of $776 million for the three months ended June 30, 2024 increased $25 million, or 3%, and on a daily constant currency basis increased 12% compared to the same period in 2023. The increase was due to sales growth of 12%, driven by customer acquisition for the segment and enterprise growth at MonotaRO, partially offset by declining non-core, consumer-like customers at Zoro. Sales growth was offset by unfavorable currency exchange of 9% due to changes in the exchange rate between the U.S. dollar and the Japanese yen.
Current wording
Net sales of $791 million for the three months ended September 30, 2024 increased $59 million, or 8%, and on a daily constant currency basis increased 12% compared to the same period in 2023. The increase was due to sales growth of 13%, driven by customer acquisition for the segment and enterprise growth at MonotaRO. Sales growth was partially offset by unfavorable currency exchange of 5% due to changes in the exchange rate between the U.S. dollar and the Japanese yen.
Previous wording
The following table is included as an aid to understanding the changes of Grainger's total net sales, daily net sales and daily, organic constant currency net sales compared from the prior period for the six months ended June 30, 2024 and 2023 (in millions of dollars):
Current wording
The following table is included as an aid to understanding the changes of Grainger's total net sales, daily net sales and daily, organic constant currency net sales compared from the prior period for the nine months ended September 30, 2024 and 2023 (in millions of dollars):
Previous wording
Net sales of $8,547 million for the six months ended June 30, 2024 increased $274 million, or 3%, and on a daily, organic constant currency basis increased 5% compared to the same period in 2023. Both High-Touch Solutions N.A. and the Endless Assortment segments contributed to sales growth in the first half of 2024. For further discussion on the Company's net sales, see the Segment Analysis section below.
Current wording
Solutions N.A. and the Endless Assortment segments contributed to sales growth in the nine months ended September 30, 2024. For further discussion on the Company's net sales, see the Segment Analysis section below.
Previous wording
Gross profit of $3,362 million for the six months ended June 30, 2024 increased $84 million, or 3%, and gross profit margin of 39.3% decreased 30 basis points compared to the same period in 2023. For further discussion on the Company's gross profit, see the Segment Analysis section below.
Current wording
Gross profit of $5,082 million for the nine months ended September 30, 2024 increased $149 million, or 3%, and gross profit margin of 39.3% decreased 20 basis points compared to the same period in 2023. For further discussion on the Company's gross profit, see the Segment Analysis section below.
Previous wording
SG&A of $2,044 million for the six months ended June 30, 2024 increased $107 million, or 6%, compared to the same period in 2023. Adjusted SG&A of $2,028 million increased $91 million, or 5%, driven by higher marketing and payroll and benefit expenses in 2024. Adjusted SG&A leverage decreased 30 basis points compared to the same period in 2023.
Current wording
SG&A of $3,078 million for the nine months ended September 30, 2024 increased $153 million, or 5%, compared to the same period in 2023. Adjusted SG&A of $3,062 million increased $137 million, or 5%, driven by higher marketing and payroll and benefit expenses in 2024. SG&A leverage decreased 40 basis points and adjusted SG&A leverage decreased 30 basis points compared to the same period in 2023.
Previous wording
Operating earnings of $61 million for the three months ended June 30, 2024 decreased $4 million, or 6%, compared to the same period in 2023.
Current wording
Operating earnings of $2,004 million for the nine months ended September 30, 2024 decreased $4 million, compared to the same period in 2023. Adjusted operating earnings of $2,020 million increased $12 million, or 1%.
Previous wording
Income taxes of $304 million for the six months ended June 30, 2024 decreased $5 million or 2%, compared to the same period in 2023. Adjusted income taxes of $308 million decreased $1 million. Grainger's effective tax rates were 23.5% and 23.6% for the six months ended June 30, 2024 and 2023, respectively. The adjusted effective tax rate for the six months ended June 30, 2024 was 23.5%.
Current wording
Income taxes of $470 million for the nine months ended September 30, 2024 increased $2 million, compared to the same period in 2023. Adjusted income taxes of $474 million increased $6 million compared to the same period in 2023. Grainger's effective tax rates were 24.0% and 23.9% for the nine months ended September 30, 2024 and 2023, respectively. The adjusted effective tax rate for the nine months ended September 30, 2024 was 24.0%.
Previous wording
Diluted earnings per share was $19.13 and adjusted diluted earnings per share was $19.37 for the six months ended June 30, 2024. On an adjusted basis, this was an increase of 3% compared to $18.89 for the same period in 2023.
Current wording
Diluted earnings per share was $29.00 and adjusted diluted earnings per share was $29.25 for the nine months ended September 30, 2024. On an adjusted basis, this was an increase of 3% compared to $28.32 for the same period in 2023.
Previous wording
SG&A of $1,665 million for the six months ended June 30, 2024 increased $91 million, or 6%, compared to the same period in 2023. Adjusted SG&A of $1,650 million increased $76 million, or 5%. The increase was primarily due to higher marketing expenses in 2024. Adjusted SG&A leverage decreased 50 basis points compared to the same period in 2023.
Current wording
SG&A of $2,510 million for the nine months ended September 30, 2024 increased $130 million, or 6%, compared to the same period in 2023. Adjusted SG&A of $2,495 million increased $115 million, or 5%. The increase was primarily due to higher marketing and payroll and benefit expenses in 2024. SG&A leverage decreased 50 basis points and adjusted SG&A leverage decreased 30 basis points compared to the same period in 2023.
Previous wording
Net sales of $1,527 million for the six months ended June 30, 2024 increased $52 million, or 4% and on a daily constant currency basis increased 11% compared to the same period in 2023. The increase was due to sales growth of 11% driven by customer acquisition for the segment and enterprise growth at MonotaRO, partially offset by unfavorable foreign exchange of 7% due to changes in the exchange rate between the U.S. dollar and the Japanese yen.
Current wording
Net sales of $2,318 million for the nine months ended September 30, 2024 increased $111 million, or 5% and on a daily constant currency basis increased 11% compared to the same period in 2023. The increase was due to sales growth of 12%, driven by customer acquisition for the segment and enterprise growth at MonotaRO. Sales growth was partially offset by unfavorable currency exchange of 7% due to changes in the exchange rate between the U.S. dollar and the Japanese yen.
Previous wording
Gross profit of $229 million for the three months ended June 30, 2024 increased $5 million, or 2%, and gross profit margin of 29.5% decreased 20 basis points compared to the same period in 2023. The decrease was primarily driven by unfavorable product and customer mix.
Current wording
Gross profit of $682 million for the nine months ended September 30, 2024 increased $28 million, or 4%, and gross profit margin of 29.4% decreased 20 basis points compared to the same period in 2023. The decrease was driven by unfavorable product mix.
Previous wording
The following tables provide reconciliations of reported net sales growth from the prior year period in accordance with GAAP to the Company's non-GAAP measures daily net sales and daily, organic constant currency net salesfor the six months ended June 30, 2024 and 2023 (in millions of dollars):
Current wording
The following tables provide reconciliations of reported net sales growth from the prior year period in accordance with GAAP to the Company's non-GAAP measures daily net sales and daily, organic constant currency net salesfor the nine months ended September 30, 2024 and 2023 (in millions of dollars):
Previous wording
The following tables provide reconciliations of reported SG&A expenses, operating earnings, net earnings attributable to W.W. Grainger, Inc. and diluted earnings per share determined in accordance with GAAP to the Company's non-GAAP measures adjusted SG&A, adjusted operating earnings, adjusted net earnings attributable to W.W. Grainger, Inc. and adjusted diluted earnings per share for the three months ended June 30, 2024 and 2023 (in millions of dollars):
Current wording
The following tables provide reconciliations of reported SG&A expenses, operating earnings, net earnings attributable to W.W. Grainger, Inc. and diluted earnings per share determined in accordance with GAAP to the Company's non-GAAP measures adjusted SG&A, adjusted operating earnings, adjusted net earnings attributable to W.W. Grainger, Inc. and adjusted diluted earnings per share for the three and nine months ended September 30, 2024 and 2023 (in millions of dollars):
Previous wording
As of June 30, 2024 and December 31, 2023, Grainger had cash and cash equivalents of $769 million and $660 million, respectively. The Company had approximately $2.0 billion in available liquidity as of June 30, 2024.
Current wording
As of September 30, 2024 and December 31, 2023, Grainger had cash and cash equivalents of $1,448 million and $660 million, respectively. The Company had approximately $2.7 billion in available liquidity as of September 30, 2024.
Previous wording
Net cash provided by operating activities was $1,072 million and $904 million for the six months ended June 30, 2024 and 2023, respectively. The increase was driven by favorable changes in working capital and inventory management combined with supply chain efficiencies compared to the prior year period.
Current wording
Net cash provided by operating activities was $1,683 million and $1,427 million for the nine months ended September 30, 2024 and 2023, respectively. The increase was driven by favorable changes in working capital primarily due to decreased accounts receivable driven by value added services compared to the prior year period.
Previous wording
Working capital as of June 30, 2024 was $3,153 million, an increase of $75 million compared to $3,078 million as of December 31, 2023. The increase was driven by higher operating cash and increased accounts receivable. As of June 30, 2024 and December 31, 2023, the ratio of current assets to current liabilities was 2.7 and 2.8, respectively.
Current wording
Working capital as of September 30, 2024 was $3,112 million, an increase of $34 million compared to $3,078 million as of December 31, 2023. As of September 30, 2024 and December 31, 2023, the ratio of current assets to current liabilities was 2.7 and 2.8, respectively.
Previous wording
Total debt as a percent of total capitalization was 38.9% and 40.1% as of June 30, 2024 and December 31, 2023, respectively.
Current wording
Total debt as a percent of total capitalization was 41.9% and 40.1% as of September 30, 2024 and December 31, 2023, respectively.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The following tables provide reconciliations of reported SG&A expenses, operating earnings, net earnings attributable to W.W. Grainger, Inc. and diluted earnings per share determined in accordance with GAAP to the Company's non-GAAP measures adjusted SG&A, adjusted operating earnings, adjusted net earnings attributable to W.W. Grainger, Inc. and adjusted diluted earnings per share for the six months ended June 30, 2024 and 2023 (in millions of dollars):