FAST Fastenal Company

W.W. Grainger Inc. (GWW) recently reported sales for the month of May. Daily sales in the month increased 11% on the year-over-year basis. These results include a 1% contribution from acquisition and 2% from foreign exchange.

Exclusive of the above items, organic sales during the month increased 8%, which includes a 7% contribution from volume and 2% from price, which were partially offset by a 1% decline from oil spill related sales in the Gulf of Mexico in 2010.

During fiscal 2010 Grainger provided safety and related products to clean up the oil spill, which contributed approximately 1% to total company sales in the year.

The month of May had 21 selling days, a day extra compared with the prior year period. However, the second quarter will have the same number of selling days as the corresponding period in 2010.

On the basis of segments, daily sales in the United States segment were up 8% on the year- over-year basis, while daily sales in the Canada segment rose 24%; 15% in local currency on a year-over-year basis. The Other business segment which includes sales from the acquired business in Columbia, reported the highest increase of 39% in daily sales.

Grainger’s prime competitors include Fastenal Co. (FAST), which reported net sales of $640.6 million during the first quarter of 2011, up 23% on a year-over-year basis, driven by an improvement in sales to the company’s manufacturing as well as non-residential construction customers. Grainger’s other competitors are Applied Industrial Technologies Inc. (AIT) and WESCO International Inc. (WCC). We currently have a Zacks #2 Rank (short-term Buy recommendation) on GWW stock.

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.

 
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