Economic Headwinds Impact Grainger's Top Line: Q2 Results Mixed

W.W. Grainger Inc GWW shares are trading lower after it reported second-quarter 2024 results.

Sales of $4.312 billion, up 3.1% Y/Y, missed the consensus of $4.348 billion.

In Q2 2024, High-Touch Solutions – N.A. saw a 3.1% Y/Y increase in sales, or 3.7% in constant currency, driven by higher volumes and gains across most markets.

Endless Assortment segment sales rose 3.3%, or 11.7% in constant currency, thanks to strong core B2B growth at Zoro and MonotaRO.

Adjusted gross profit increased 3.0% Y/Y to $1.694 billion, with a margin remained flat Y/Y at 39.3%. Adjusted operating profit increased 0.6% Y/Y to $665 million, with the margin at 15.4%, down 40 basis points Y/Y.

Adjusted EPS rose 5.2% Y/Y to $9.76, beating the consensus of $9.58.

In Q2 2024, the company generated $411 million in operating cash flow, with strong net earnings tempered by unfavorable working capital.

During the quarter, the company returned $345 million to shareholders via dividends and share repurchases.

Outlook: Grainger narrows FY24 net sales outlook to $17 billion-$17.3 billion (from  $17.2 billion-$17.7 billion) vs. $17.37 billion estimate and EPS of $38.00-$39.50 (from $38.00-$40.50) vs. street view of $39.15.

The company now projects buyback of $1 billion – $1.2 billion in FY24 (vs. $900 million – $1.1 billion earlier).

Investors can gain exposure to the stock via Franklin Disruptive Commerce ETF BUYZ and SMI 3Fourteen Full-Cycle Trend ETF FCTE.

Price Action: GWW shares are down 5.30% at $925.00 premarket at the last check Thursday.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.