Grainger's first-quarter 2014 earnings per share (EPS) increased 4%
year over year to $3.07 per share, a first quarter record. The
company maintained its EPS guidance in the range of $12.10 $12.85
per share for 2014. Grainger will benefit in the long term from its
focus on expanding its sales force, product offerings and
acquisitions, as well as continued investment in e-commerce.
Furthermore, Grainger's sound balance sheet and cash flow allow it
to invest in growth opportunities, raise dividends and repurchase
shares. However, the Canada segment continues to be affected by a
weak macroeconomic environment and unfavorable currency exchange.
Taking into account these pros and cons, we have maintained our
Neutral recommendation with a target price of $265.
Incorporated in 1928, in the State of Illinois, W.W. Grainger
Inc. (GWW) is a leading North American distributor of material
handling equipment, safety and security supplies, lighting and
electrical products, power and hand tools, pumps and plumbing
supplies, cleaning and maintenance supplies, forestry and
agriculture equipment, building and home inspection supplies,
vehicle and fleet components, and various aftermarket components.
It also offers services comprising inventory management and energy
efficiency solutions. The company has a multi-channel business
model consisting of a network of branches, a field sales force,
direct marketing and Internet channels. Grainger has operating
facilities, both self-owned as well as leased across the U.S. and
Canada. It has nearly 710 branches, 33 distribution centers and
The company reports revenues under two business segments the
United States, which contributed 78% to total revenue in the first
quarter of 2014 and Canada with a contribution of 11%. The
businesses from operating units in Japan, Mexico, India, Puerto
Rico, China, Panama and Columbia and Fabory Group are all combined
and included in Other Businesses and are not individually
considered as reportable segments. The Other Businesses contributed
nearly 11% to the company's revenue for the quarter.
W.W. Grainger, Inc. (GWW): Read the Full Research
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