W.W. Grainger ( GWW - Analyst Report ) reported year- over- year sales growth of 18% in February 2012, an upsurge from January sales growth of 17%. The sale growth recorded is the highest so far in 2012 and has also outperformed the 2011 peak of 16%.

Acquisitions added 5 percentage points to growth, mainly due to the Fabory business acquired in August 2011. Organic sales increased 13% with higher volume contributing 12 percentage points and pricing, adding 3 percentage points. However, a 2-percentage point dip from lower sales of seasonal products was a partial offset.

Geographically, daily sales in the United States increased 12%. Heavy Manufacturing and Retail were up in the mid-teens, Light Manufacturing, Commercial and Natural Resources were up in the low double digits, while Contractor, Government and Reseller were up in the high single digits. Canada saw an increase of 13% due to volume and price effects which were offset by negative foreign exchange.

Daily sales at the company's Other businesses, which include operations in Europe, Japan, Mexico, India, Puerto Rico, China, Dominican Republic and Panama, increased 100%, primarily due to incremental sales from Fabory. Excluding acquisitions, sales in other businesses increased 28%, driven primarily by strong growth in Japan, Mexico, China and Columbia.

Looking forward, March 2012 will have 22 selling days, 1 day less than last year. The first quarter 2012 will have 64 selling days, same as the prior year quarter.

Grainger’s earnings increased 19% year over year to $2.13 per share, beating the Zacks Consensus Estimate by 2 cents. Revenue reached a record $2.08 billion, increasing 13.7% from the year ago quarter and also surpassing the Zacks Consensus Estimate of $2.07 billion.

The company reiterated the sales growth in the range of 10%-14% in 2012. It expects EPS in the band of $9.90-$10.65 for the full year. The Zacks Consensus Estimate for earnings is at $10.52 per share.

Grainger remains focused on expanding its product offerings and growing the share of its private label products. In addition, E-commerce, which is one of Grainger’s most efficient channels and also considered to be the most profitable, is reportedly growing twice as fast as other channels. Moreover, the company expects that Fabory acquisition will provide a better earnings leverage in the next quarters.

Currently, the shares of Grainger have a Zacks #2 Rank, implying a short-term “Buy” recommendation. It competes with the companies like Applied Industrial Technologies Inc. ( AIT - Snapshot Report ) and WESCO International Inc. ( WCC - Analyst Report ) .

Illinois-based Grainger is a leading North American distributor of material handling equipment including safety and security supplies, lighting and electrical products, power and hand tools, pumps and plumbing supplies, etc. The company’s services comprise inventory management and energy efficiency solutions.