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W.W. Grainger, Inc. (GWW)
February 2012 Sales Release Call
March 12, 2012 8:00 AM ET
Bill Chapman – Senior Director, IR
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I’ll begin by reminding you that certain statements and projections of future results made in this webcast constitute forward-looking information. This information is based on current expectations of market conditions and competitive and regulatory environments and involves risk and uncertainty. Please see our 2011 Form 10-K for a discussion of factors as they relate to forward-looking statements.
Let’s now take a look at our daily sales results for February 2012, which had 21 selling days, one more than February 2011. Total company sales increased 18% versus February 2011. These results include a 5 percentage point contribution from acquisitions, primarily due to the Fabory business acquired in the third quarter of 2011.
Daily organic sales increased 13%, including 12 percentage points from volume and 3 percentage points from price, offset by lower sales of seasonal products, which represented a 2 percentage point drag for the month.
Now let’s turn our attention to sales results by segment. As a reminder, monthly sales history by reporting segment for the prior two years is available on the Investor Relations Web site along with a summary of selling days by month and by business. Please note that although some of our businesses have a different number of selling days due to local holidays, we use the number of selling days in the United States as the basis for our calculation of daily sales.
I’ll begin with our largest segment, the United States. Daily sales for the U.S. segment increased 12%, consisting of 11 percentage points from volume and 3 percentage points from price, offset by a 2 percentage point drag from lower sales of seasonal products due to milder weather.
Price inflation in February was higher than the 2 percentage points reported in January. This sequential increase reflects our February 1st price increase, timed with the release of our new U.S. catalog, and higher product cost inflation.
Let’s review our customer end markets in the United States. As a reminder, beginning in January, we began to break out the Reseller end market into two parts: Reseller and Natural Resources, which was formerly Agriculture and Mining. A restatement of that history can be found on the Investor Relations Web site under the supporting materials section for February sales.
Daily sales in February for our customer end markets in the United States were as follows: Heavy Manufacturing and Retail were up in the mid teens; Light Manufacturing, Commercial and Natural Resources were up in the low double digits; Contractor, Government and Reseller were up in the high single digits.
In our Canadian segment, daily sales increased 13% in U.S. currency, including a 13 percentage point contribution from volume and 1 percentage point from price, offset by a 1 percentage point decline from foreign exchange. Strong growth to customers in the Construction, Retail and Utilities end markets contributed to this strong sales performance. In local currency, sales for the Canadian segment increased 14%.
Daily sales for our Other Businesses increased 100%, primarily due to the incremental sales from Fabory in Europe. Sales for Fabory continued to soften primarily due to the challenges with the European economy. Excluding acquisitions, sales for our Other Businesses increased 28% driven primarily by strong growth in Japan, Mexico, China and Colombia.
Looking forward, March will have 22 selling days, one less than March of last year and sales growth thus far in March is running in line with year-to-date sales results.
Please mark your calendar for Grainger’s first quarter earnings release on Tuesday, April 17th. If you have any questions, please contact Laura Brown, Senior Vice President of Communications and Investor Relations, at 847-535-0409 or me at 847-535-0881. Thank you.
[No Q&A session for this event]