Grainger reported fourth-quarter adjusted earnings of $2.80 per
share, which was up 8% year over year. Revenues rose 6%. Grainger
remains optimistic about its opportunities in the MRO market and
single channel online model businesses. Additionally, the company
will benefit from continued investment. However, Grainger lowered
its 2015 guidance and now expects sales growth of 3 7% and earnings
per share at $12.60 to $13.60. This reflects foreign currency
translation due to further weakening of the Canadian and Japanese
currencies, as well as the low inflationary environment in the U.S.
Thus, we are reaffirming our Neutral recommendation on Grainger
with a target price of $247.
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
The company reports revenues under two business segments the
United States, which contributed 78% to total revenue in the third
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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