W W Grainger Stock Slips After Missing Q2 Earnings Estimates

W W Grainger Inc GWW reported second-quarter sales growth of 13.1% year-over-year to $3.207 billion, missed the consensus of $3.22 billion. Sales rose 15.0% on an organic, daily, constant currency basis.
High-Touch Solutions segment sales were up 13.7% on a daily basis, and Endless Assortment segment daily sales growth was up 23%.
Adjusted EPS improved to $4.27 from $3.75 in 2Q20, missing consensus estimates of $4.58.
Gross profit improved 11% to $1.12 billion. The gross margin contracted by 75 bps to 35%.
The operating profit increased by 62.9Y/Y to $334 million, and the margin expanded by 315 bps to 10.4%. Adjusted operating margin contracted by 70 bps to 10.4%.
Grainger generated cash from operating activities of $269 million, compared to $232 million a year ago.
The company returned $203 million to shareholders through dividends and share repurchases during the quarter.
FY21 Outlook: Grainger maintained its outlook for net sales of $12.7 billion-$13 billion vs. the consensus of $12.85 billion.
Except for revenue, it expects FY21 results to trend towards the lower end of the guided ranges for 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 $19.84.
Price action: GWW shares are trading lower by 3.48% at $445.015 on the last check Friday.

Earnings Calendar