W W Grainger Stock Surges As Q3 Earnings Top Estimates

W W Grainger Inc GWW reported third-quarter FY21 sales growth of 11.7% year-over-year to $3.37 billion, +11.9% on an organic basis, beating the consensus of $3.32 billion.
High-Touch Solutions segment daily sales were up 12%, and Endless Assortment segment daily sales growth was 12.7%.
Adjusted EPS improved to $5.65 (+25% Y/Y), beating the consensus of $5.30.
The gross margin expanded by 145 bps to 37.1%. The operating income increased by 15.3% Y/Y to $438 million, and the margin expanded by 40 bps to 13%.
Grainger generated cash from operating activities of $161 million, compared to $311 million a year ago.
The company returned $327 million to shareholders through dividends and share repurchases during the quarter.
"Demand for core products was very strong throughout the quarter, and Grainger gained share and expanded margins in both segments. Despite the current market and supply chain uncertainties, we are confident in our ability to deliver solid performance in the fourth quarter and into 2022," commented DG Macpherson, Chairman, and CEO.
FY21 Outlook: Grainger expects revenue to finish the year near the midpoint and expects all other metrics to fall between the low end and the midpoint of the range.
Net sales of $12.7 billion-$13 billion against the consensus of $12.83 billion. Gross Profit Margin of 36.1%-36.6%, Operating Margin of 11.8%-12.4%, and EPS of $19.00-$20.50, versus the consensus of $19.13.
Price Action: GWW shares are trading higher by 8.05% at $465.41 on the last check Friday.

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