W.W. Grainger Inc. (GWW) continued its streak of strong monthly sales, with August sales growing 20% year over year, riding on the wave of record sales in July that saw a 21% hike, the highest in the year so far.
Acquisitions made by Grainger contributed 5 percentage points to the growth with favorable foreign exchange adding another percentage point. Excluding the impacts of acquisitions and foreign currency exchange rates, daily sales increased 14% during the month.
The higher demand for safety and other related products needed for clean-up of the oil spill in the Gulf of Mexico contributed 3 percentage points of sales growth. The warm weather experienced across the United States during August also resulted in the sale of seasonal products, adding a further 1% percentage point to sales growth.
Geographically, daily sales in the United States rose 15%, while Canada saw a 19% increase (14% increase in local currency). Daily sales for the company's Other Businesses segment, which includes operations in Japan, Mexico, India, Puerto Rico, China and Panama, shot up 198%.
The higher number of selling days also benefited the company. In August 2010, Grainger had 22 selling days, while there were 21 selling days in August 2009. September 2010 will, however, not have this competitive edge compared to the year-ago month, with 21 selling working days, at par with September 2009.
Grainger continues to benefit from organic growth, sales from acquired businesses and a positive foreign exchange impact. However, the benefits from foreign exchange and sales relating to oil spill clean-up are expected to die down through the remainder of the year.
Grainger currently retains a Zacks #2 Rank (short-term Buy rating). We also maintain a Neutral rating on the stock.
Based in Lake Forest, Illinois, Grainger is a distributor of facilities maintenance and other related products and services. The company distributes 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.
GRAINGER W W (GWW): Free Stock Analysis Report
Zacks Investment Research
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The higher demand for safety and other related products needed for clean-up of the oil spill in the Gulf of Mexico contributed 3 percentage points of sales growth. The warm weather experienced across the United States during August also resulted in the sale of seasonal products, adding a further 1% percentage point to sales growth.
Geographically, daily sales in the United States rose 15%, while Canada saw a 19% increase (14% increase in local currency). Daily sales for the company's Other Businesses segment, which includes operations in Japan, Mexico, India, Puerto Rico, China and Panama, shot up 198%.
The higher number of selling days also benefited the company. In August 2010, Grainger had 22 selling days, while there were 21 selling days in August 2009. September 2010 will, however, not have this competitive edge compared to the year-ago month, with 21 selling working days, at par with September 2009.
Grainger continues to benefit from organic growth, sales from acquired businesses and a positive foreign exchange impact. However, the benefits from foreign exchange and sales relating to oil spill clean-up are expected to die down through the remainder of the year.
Grainger currently retains a Zacks #2 Rank (short-term Buy rating). We also maintain a Neutral rating on the stock.
Based in Lake Forest, Illinois, Grainger is a distributor of facilities maintenance and other related products and services. The company distributes 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.
GRAINGER W W (GWW): Free Stock Analysis Report
Zacks Investment Research
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