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Grainger (GWW) Q3 Earnings & Sales Top Estimates, Up Y/Y

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W.W. Grainger, Inc. (GWW - Free Report) reported third-quarter 2021 adjusted earnings per share (EPS) of $5.65, beating the Zacks Consensus Estimate of $5.31. The bottom line also increased 25%, year over year, primarily on higher operating earnings.

Including one-time items, earnings came in at $5.65 in the reported quarter. The figure climbed 28% from the year-ago quarter.

Grainger’s quarterly revenues went up 12% year over year to $3,372 million. The top line also surpassed the Zacks Consensus Estimate of $3,330 million.

Daily sales for the quarter increased 11.7% compared with the prior-year period. This increase in sales was driven by a strong performance in both the High-Touch Solutions North America (N.A.) and Endless Assortment segments.

Operational Update

Cost of sales rose 9.2% year over year to $2,122 million. The gross profit climbed 16% year over year to $1,250 million. The gross margin came in at 37.1% in the quarter, marginally up from the prior-year period’s 35.6%.

Grainger’s adjusted operating income in the third quarter was up 17% year on year to $438 million. The adjusted operating margin came in at 13% compared with the prior-year quarter’s 12.4%.

W.W. Grainger, Inc. Price, Consensus and EPS Surprise

W.W. Grainger, Inc. Price, Consensus and EPS Surprise

W.W. Grainger, Inc. price-consensus-eps-surprise-chart | W.W. Grainger, Inc. Quote

Financial Position

The company had cash and cash equivalents of $328 million as of Sep 30, 2021, down from $585 million as of Dec 31, 2020. Cash flow from operating activities decreased to $161 million in third-quarter 2021 from the prior-year quarter’s $311 million.

Long-term debt was $2,372 million as of Sep 30, 2021, compared with $2,389 million as of Dec 31, 2020. During the third quarter, the company returned $327 million to shareholders through dividends and share buybacks.

2021 Outlook

Grainger projects net sales for the current year to lie between $12.7 billion and $13 billion. The company anticipates earnings per share in the band of $19.00-$20.50 for 2021.

Price Performance

So far this year, Grainger’s shares have gained 6.7% as against the industry’s loss of 16.3%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Zacks Rank and Stocks to Consider

Grainger currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the Industrial Products sector include Nordson Corporation (NDSN - Free Report) , Worthington Industries, Inc. (WOR - Free Report) and DXP Enterprises, Inc. (DXPE - Free Report) . All of these stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nordson has an anticipated earnings growth rate of 45.2% for fiscal 2021. The company’s shares have rallied around 22%, year to date.

Worthington has an estimated earnings growth rate of 3.6% for fiscal 2022. Year to date, the company’s shares have gained 9.8%.

DXP Enterprises has a projected earnings growth rate of 77.6% for the current year. The stock has appreciated around 49%, so far this year.