W.W. Grainger, Inc. (GWW): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Grainger's second-quarter 2014 earnings per share increased 2% year over year to $3.09 per share. The company reduced its earnings per share guidance to the range of $12.20 to $12.60 on the back of 5 7% growth in sales. Grainger remains focused on expanding its product offerings, sales force as well as the share of its private label products which will lead to long-term growth. Grainger continues to invest in e-commerce and expects to increase the number of customers utilizing this channel and its percentage of overall sales. 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 $253.

Overview:

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 multiple websites.

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.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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