W.W. Grainger, Inc. (GWW Quick QuoteGWW - Free Report) reported a 3% year-over-year increase in sales in Jul 2016 – a tad improvement from the flat growth rate in June and the 1% sales dip recorded in Jul 2015. This led to a 4% rise in Grainger’s share price, which closed at $229.38 on Aug 11.

Jul 2016 had 20 selling days, two days lesser than last year. The sales upside last month was mainly attributed to positive contribution from the Cromwell acquisition (4 percentage points). Excluding acquisition-related impact, organic daily sales were down 1%, driven by flat volume and a 1 percentage point decline in price.

Geographically, daily sales in the U.S. during July dipped 2%, which included two percentage point decline in volume and a one percentage point decline in price, partially offset by a one percentage point contribution from inter-company sales to Zoro.

Among the end markets, the Government and Retail segments witnessed growth in the mid-single digits. Light Manufacturing was up in the low-single digits. However, Commercial witnessed a low-single digit decline, followed by Heavy Manufacturing which was down in the mid-single digits. Further, Contractor sales contracted in the high-single digits and Reseller was down in the low-double digits. Natural Resources dipped in the high-teens.

Daily sales in Canada plunged 19% in terms of the U.S. dollar. In local currency, sales were down 14%. Additionally, the drop was a result of a 15 percentage point decrease in volume partially offset by a 1 percentage point benefit from price.

Daily sales to all customer end markets fell except Utilities and Forestry. From a geographic standpoint, daily sales in Alberta plummeted about 20% in local currency, whereas sales in all other provinces in aggregate decreased 12% from the prior-year period.

Daily sales at Grainger’s other businesses, including operations in Asia, Europe and Latin America, surged 56% in July due to a contribution of 30 percentage points from the Cromwell buyout and 20 percentage points from volume and price, and 6 percentage point benefit from foreign exchange.

MonotaRO in Japan continued its solid growth and benefited from a difference in the number of local selling days. Zoro, in the U.S., advanced more than 30% and the business in Mexico grew low-double digits in local currency, partially offset by lower sales in Latin America and at Fabory.

According to Grainger, daily sales gain in August will be better than July. Aug 2016 will have 23 selling days, 2 more than last year.

Grainger’s revenues were up 2% year over year in second-quarter 2016. During its second quarter conference call, the company revised its sales growth guidance to 1%–4% for 2016 from the previous range of 0%–6%. It also revised its earnings per share outlook to $11.20–$12.20 from $11.00–$12.80.

Robust performance of single-channel online businesses and attractive growth opportunities in the large and fragmented MRO market augurs well for Grainger’s growth. However, its Canadian business continues to be hampered by low oil prices. Some other companies in the industrial products sector which will also remain challenged by choppy oil prices are Greif, Inc. (GEF Quick QuoteGEF - Free Report) , Lincoln Electric Holdings Inc. (LECO Quick QuoteLECO - Free Report) and Astec Industries, Inc. (ASTE Quick QuoteASTE - Free Report) .

W.W. Grainger is a leading North-American distributor of 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>