CHICAGO, July 30, 2021 /PRNewswire/ --
Second Quarter Highlights
- Delivered sales of $3.2
billion, up 13.1%, compared to the second quarter of 2020;
up 15.0% on an organic, daily, constant currency basis
- Generated $269 million in
operating cash flow and returned $203
million to shareholders through dividends and share
repurchases
- Earned 2021 Great Place to Work® Certification™
/PRNewswire/ -- Grainger (NYSE: GWW) today reported results for
the second quarter 2021 with sales of $3.2
billion, up 13.1% and up 15.0% on an organic, daily,
constant currency basis compared to the second quarter 2020. Both
the High-Touch Solutions N.A. and Endless Assortment segments
produced strong top-line growth.
"Grainger is uniquely positioned to navigate one of the most
challenging supply chain environments in recent history, with labor
shortages, material shortages and transportation challenges. I am
proud of how the Grainger team has remained committed to our
operating principles, served customers well during this period and
delivered strong top-line growth," said DG Macpherson, Chairman and
Chief Executive Officer. "As more of the U.S. became vaccinated,
and mask mandates were relaxed earlier than expected, demand for
pandemic products stalled, resulting in further inventory
adjustments and a negative impact to gross profit margin. Excluding
these adjustments, our underlying gross profit margin has improved
as customer demand has returned to a more normal mix. We remain
confident in our ability to achieve full year financial results
within our guidance range."
2021 Second Quarter Financial Summary
($ in
millions)
|
Q2
2021
|
Q2
2020
|
Q2
Fav. (Unfav.) vs.
Prior
|
|
Reported
|
Adjusted1
|
Reported
|
Adjusted1
|
Reported
|
Adjusted1
|
Net
Sales
|
$3,207
|
$3,207
|
$2,837
|
$2,837
|
13%
|
13%
|
Gross
Profit
|
$1,124
|
$1,124
|
$1,016
|
$1,016
|
11%
|
11%
|
Operating
Earnings
|
$334
|
$334
|
$205
|
$315
|
62%
|
6%
|
Net Earnings
Attributable to W.W. Grainger, Inc.
|
$225
|
$225
|
$114
|
$204
|
98%
|
11%
|
Diluted Earnings
Per Share
|
$4.27
|
$4.27
|
$2.10
|
$3.75
|
103%
|
14%
|
|
|
|
|
|
|
|
Gross
Margin
|
35.0%
|
35.0%
|
35.8%
|
35.8%
|
(75) bps
|
(75) bps
|
Operating
Margin
|
10.4%
|
10.4%
|
7.3%
|
11.1%
|
315 bps
|
(70) bps
|
Tax
Rate
|
23.6%
|
23.6%
|
30.2%
|
25.8%
|
660 bps
|
220 bps
|
1)
|
Results exclude
restructuring and income tax items as shown in the supplemental
information of this release. Reconciliations of the adjusted
measures reflected in this table to the most directly comparable
GAAP measures are provided in the supplemental information of this
release. During the second quarter of 2020, the company recorded a
$109 million pretax loss from the sale of the Fabory business which
was the largest contributor to the decline in reported operating
earnings.
|
Revenue
Daily sales for the quarter increased 13.1% as compared to the
second quarter of 2020 with the same number of selling days. On an
organic, constant currency basis, which excludes revenues from the
divested Fabory and China
businesses from the prior year results, daily sales increased 15.0%
as compared to the second quarter of 2020. Foreign exchange
contributed a 0.9% favorable impact during the second quarter of
2021 compared to the second quarter of 2020.
In the High-Touch Solutions N.A. segment, sales were up 13.7% on
a daily basis versus the prior year second quarter due primarily to
a strong recovery in non-pandemic product growth. In the Endless
Assortment segment, daily sales growth was up 23.0% versus the
second quarter of 2020 from strong customer acquisition in
both Zoro U.S. and MonotaRO.
Gross Margin
Gross margin for the second quarter of 2021 was 35.0%, a 75
basis point decline over the prior year quarter driven by
pandemic-related inventory adjustments recorded in the High-Touch
Solutions N.A. segment. Early in the pandemic, the Company
purchased a wide range of products to meet customer needs, but as
the pandemic evolved, demand for certain pandemic products weakened
and market prices lowered. During the second quarter of 2021, mask
demand declined abruptly when most local and federal mask mandates
were lifted in mid-May of 2021, earlier than the previously
expected re-openings. This change, along with vaccine availability
and general economic recovery, resulted in the Company recording
inventory adjustments totaling $63
million. It does not expect any further material
pandemic-related inventory adjustments. Excluding these
adjustments, gross margin for the total company would have been
37.0%, up 120 basis points compared to the second quarter of
2020.
The Endless Assortment segment continued to show positive gross
margin trends, expanding by 75 basis points versus the prior year
second quarter and growing gross profit dollars 26% in the second
quarter of 2021.
Earnings
Reported operating earnings for the second quarter of 2021 of
$334 million were up 62% versus the
second quarter of 2020, primarily due to losses taken in the second
quarter of 2020 related to the divested Fabory business. On an
adjusted basis, operating earnings for the quarter were
$334 million, up 6% versus the second
quarter of 2020.
In the second quarter of 2021, reported operating margin of
10.4% increased 315 basis points, driven by the $109 million pretax loss recorded on the sale of
Fabory in the second quarter of 2020. On an adjusted basis,
operating margin decreased 70 basis points versus the second
quarter of 2020 driven primarily by the decline in gross profit
margin, as SG&A leverage remained nearly flat year over
year.
Reported earnings per share of $4.27 in the second quarter of 2021 increased
103% versus the second quarter of 2020. Adjusted earnings per share
for the quarter of $4.27 increased
14% versus the second quarter of 2020. The increase in earnings per
share was due primarily to higher operating earnings and lower
average shares outstanding in the current period.
Tax Rate
The second quarter 2021 reported tax rate was 23.6% versus 30.2%
in the second quarter of 2020; the adjusted tax rates were 23.6%
and 25.8% for the second quarter of 2021 and 2020, respectively.
The variance in the reported tax rates resulted from the prior year
unfavorable impacts of the Fabory divestiture. Additionally, for
both the reported and adjusted tax rates, the second quarter of
2021 included a larger benefit from stock-based compensation as
compared to the prior year.
Cash Flow
Net cash provided by operating activities was $269 million and $232
million for the three months ended June 30, 2021 and 2020, respectively. The
increase in cash from operating activities is primarily the result
of higher net earnings and favorable working capital, partially
offset by the impacts from the divested Fabory business. The
company also returned $203 million to
shareholders through dividends and share repurchases during the
quarter.
Guidance
The Company is maintaining guidance ranges provided in the
previous quarter. Strong sales are expected to continue while gross
profit margin, operating margin and EPS will likely face pressure
from the incremental inventory adjustments and macroeconomic
factors. Outside of revenue, Company results are expected to trend
towards the low end of the guided ranges.
Total
Company
|
2021 Guidance
Range
|
Net Sales
|
$12.7 - 13.0
billion
|
Daily
growth
|
8.5 -
11.0%
|
Organic, daily
growth
|
10.0 -
12.5%
|
Gross Profit
Margin
|
36.1 -
36.6%
|
Operating
Margin
|
11.8 -
12.4%
|
Earnings per Share
(EPS)
|
$19.00 -
20.50
|
Tax Rate
|
25.0 -
26.0%
|
Webcast
Grainger will conduct a live conference call and webcast at
11:00 a.m. ET on July 30, 2021 to discuss the second quarter
results. The webcast will be hosted by DG Macpherson, Chairman and
CEO, and Deidra Merriwether, Senior
Vice President and CFO, and can be accessed at invest.grainger.com.
For those unable to participate in the live event, a webcast replay
will be available for 90 days at invest.grainger.com.
About Grainger
W.W. Grainger, Inc., with 2020 sales of $11.8 billion, is North
America's leading broad line supplier of maintenance, repair
and operating (MRO) products, with operations primarily in
North America (N.A.), Japan and the United
Kingdom.
Visit invest.grainger.com to view information about the
company, including a supplement regarding 2021 second quarter
results. Additional company information can be found on the
Grainger Investor Relations website
which includes our Fact Book and Corporate Responsibility
report.
Safe Harbor Statement
All statements in this communication, other than those relating to
historical facts, are "forward-looking statements." Forward-looking
statements can generally be identified by their use of terms such
as "anticipate," "estimate," "believe," "expect," "could,"
"forecast," "may," "intend," "plan," "predict," "project" "will" or
"would" and similar terms and phrases, including references to
assumptions. Forward-looking statements are not guarantees of
future performance and are subject to a number of assumptions,
risks and uncertainties, many of which are beyond our control,
which could cause actual results to differ materially from such
statements. Forward-looking statements include, but are not limited
to, statements about future strategic plans and future financial
and operating results. Important factors that could cause actual
results to differ materially from those presented or implied in the
forward-looking statements include, without limitation: the unknown
duration and health, economic, operational and financial impacts of
the global outbreak of the coronavirus disease 2019 and its
variants (COVID-19), as well as the impact of actions taken or
contemplated by government authorities to mitigate the spread of
COVID-19 (such as mask mandates or social distancing requirements)
and to promote economic stability and recovery, on the Company's
businesses, its employees, customers and suppliers, including
disruption to Grainger's operations resulting from employee
illnesses, the development, availability and usage of effective
treatment or vaccines, changes in customers' product needs, raw
material, inventory and labor shortages, continued strain on global
supply chains and diminished transportation carrier performance,
disruption caused by business responses to the COVID-19 pandemic,
including working remote arrangements, which may create increased
vulnerability to cybersecurity incidents, including breaches of
information systems security, adaptions to the Company's controls
and procedures required by working remote arrangements, including
financial reporting processes, which could impact the design or
operating effectiveness of such controls or procedures, and global
or regional economic downturns or recessions, which could result in
a decline in demand for the Company's products; higher product
costs or other expenses; a major loss of customers; loss or
disruption of sources of supply; changes in customer or product
mix; increased competitive pricing pressures; failure to sustain
contractual arrangements on a satisfactory basis with group
purchasing organizations; failure to develop or implement new
technology initiatives or business strategies; failure to
adequately protect intellectual property or successfully defend
against infringement claims; fluctuations or declines in the
Company's gross profit percentage; the Company's responses to
market pressures; the outcome of pending and future litigation or
governmental or regulatory proceedings, including with respect to
wage and hour, anti-bribery and corruption, environmental,
advertising and marketing, consumer protection, pricing (including
disaster or emergency declaration pricing statutes), product
liability, compliance or safety, trade and export compliance,
general commercial disputes, or privacy and cybersecurity matters;
investigations, inquiries, audits and changes in laws and
regulations; failure to comply with laws, regulations and
standards; government contract matters; disruption of information
technology or data security systems involving the Company or third
parties on which the Company depends; general industry, economic,
market or political conditions; general global economic conditions
including tariffs and trade issues and policies; currency exchange
rate fluctuations; market volatility, including price and trading
volume volatility or price declines of the Company's common stock;
commodity price volatility; facilities disruptions or shutdowns;
higher fuel costs or disruptions in transportation services; other
pandemic diseases or viral contagions; natural or human induced
disasters, extreme weather and other catastrophes or conditions;
failure to attract, retain, train, motivate, develop and transition
key employees; loss of key members of management or key employees;
changes in effective tax rates; changes in credit ratings or
outlook; the Company's incurrence of indebtedness and other factors
that can be found in our filings with the Securities and Exchange
Commission, including our most recent periodic reports filed on
Form 10-K and Form 10-Q, which are available on our Investor
Relations website. Forward-looking statements are given only as of
the date of this communication and we disclaim any obligation to
update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise, except as required
by law.
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
|
(In millions of
dollars, except for share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net sales
|
$
|
3,207
|
|
|
$
|
2,837
|
|
|
$
|
6,291
|
|
|
$
|
5,838
|
|
Cost of goods sold
|
2,083
|
|
|
1,821
|
|
|
4,074
|
|
|
3,701
|
|
Gross profit
|
1,124
|
|
|
1,016
|
|
|
2,217
|
|
|
2,137
|
|
Selling, general and
administrative expenses
|
790
|
|
|
811
|
|
|
1,525
|
|
|
1,773
|
|
Operating earnings
|
334
|
|
|
205
|
|
|
692
|
|
|
364
|
|
Other (income) expense:
|
|
|
|
|
|
|
|
Interest expense,
net
|
22
|
|
|
28
|
|
|
43
|
|
|
49
|
|
Other, net
|
(7)
|
|
|
(7)
|
|
|
(13)
|
|
|
(11)
|
|
Total other
expense, net
|
15
|
|
|
21
|
|
|
30
|
|
|
38
|
|
Earnings before income taxes
|
319
|
|
|
184
|
|
|
662
|
|
|
326
|
|
Income tax
provision
|
76
|
|
|
55
|
|
|
164
|
|
|
12
|
|
Net earnings
|
243
|
|
|
129
|
|
|
498
|
|
|
314
|
|
Less: Net earnings
attributable to noncontrolling
interest
|
18
|
|
|
15
|
|
|
35
|
|
|
27
|
|
Net earnings
attributable to W.W. Grainger, Inc.
|
$
|
225
|
|
|
$
|
114
|
|
|
$
|
463
|
|
|
$
|
287
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
4.30
|
|
|
$
|
2.11
|
|
|
$
|
8.80
|
|
|
$
|
5.31
|
|
Diluted
|
$
|
4.27
|
|
|
$
|
2.10
|
|
|
$
|
8.76
|
|
|
$
|
5.29
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
52.2
|
|
|
53.5
|
|
|
52.2
|
|
|
53.6
|
|
Diluted
|
52.5
|
|
|
53.7
|
|
|
52.5
|
|
|
53.8
|
|
Diluted Earnings Per
Share
|
|
|
|
|
|
|
|
Net earnings as
reported
|
$
|
225
|
|
|
$
|
114
|
|
|
$
|
463
|
|
|
$
|
287
|
|
Earnings allocated to
participating securities
|
(2)
|
|
|
(1)
|
|
|
(4)
|
|
|
(3)
|
|
Net earnings
available to common shareholders
|
$
|
223
|
|
|
$
|
113
|
|
|
$
|
459
|
|
|
$
|
284
|
|
Weighted average
shares adjusted for dilutive securities
|
52.5
|
|
|
53.7
|
|
|
52.5
|
|
|
53.8
|
|
Diluted earnings per
share
|
$
|
4.27
|
|
|
$
|
2.10
|
|
|
$
|
8.76
|
|
|
$
|
5.29
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In millions of
dollars)
|
|
|
|
(Unaudited)
|
|
|
Assets
|
June 30,
2021
|
|
December 31,
2020
|
Cash and cash
equivalents
|
$
|
547
|
|
|
$
|
585
|
|
Accounts receivable –
net
|
1,634
|
|
|
1,474
|
|
Inventories –
net
|
1,707
|
|
|
1,733
|
|
Prepaid expenses and
other current assets
|
169
|
|
|
127
|
|
Total current
assets
|
4,057
|
|
|
3,919
|
|
Property, buildings
and equipment – net
|
1,436
|
|
|
1,395
|
|
Goodwill
|
390
|
|
|
391
|
|
Intangibles –
net
|
232
|
|
|
228
|
|
Other
assets
|
347
|
|
|
362
|
|
Total
assets
|
$
|
6,462
|
|
|
$
|
6,295
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current maturities of
long-term debt
|
$
|
—
|
|
|
$
|
8
|
|
Trade accounts
payable(1)
|
954
|
|
|
779
|
|
Accrued compensation
and benefits
|
285
|
|
|
307
|
|
Accrued
expenses
|
321
|
|
|
305
|
|
Income taxes
payable
|
29
|
|
|
42
|
|
Total current
liabilities
|
1,589
|
|
|
1,441
|
|
Long-term debt – less
current maturities
|
2,375
|
|
|
2,389
|
|
Deferred income taxes
and tax uncertainties
|
88
|
|
|
110
|
|
Other non-current
liabilities
|
269
|
|
|
262
|
|
Shareholders'
equity(2)
|
2,141
|
|
|
2,093
|
|
Total liabilities and
shareholders' equity
|
$
|
6,462
|
|
|
$
|
6,295
|
|
|
(1) Trade
accounts payable increased $175 million primarily driven by
inventory purchases related to return-to-work items.
|
(2) Common stock outstanding as of
June 30, 2021 was 52,074,363 compared with 52,524,391 shares
at December 31, 2020, primarily due to share
repurchases.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
(In millions of
dollars)
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
243
|
|
|
$
|
129
|
|
|
$
|
498
|
|
|
$
|
314
|
|
Provision for credit
losses
|
4
|
|
|
8
|
|
|
8
|
|
|
14
|
|
Deferred income taxes
and tax uncertainties
|
3
|
|
|
7
|
|
|
(8)
|
|
|
—
|
|
Depreciation and
amortization
|
49
|
|
|
50
|
|
|
92
|
|
|
95
|
|
Impairment of
goodwill, intangible and long-lived
assets
|
—
|
|
|
—
|
|
|
—
|
|
|
177
|
|
Net losses (gains)
from sale or redemption of
assets
and business divestitures
|
1
|
|
|
107
|
|
|
(4)
|
|
|
110
|
|
Stock-based
compensation
|
17
|
|
|
17
|
|
|
25
|
|
|
26
|
|
Subtotal
|
74
|
|
|
189
|
|
|
113
|
|
|
422
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(59)
|
|
|
104
|
|
|
(180)
|
|
|
(113)
|
|
Inventories
|
(30)
|
|
|
(163)
|
|
|
22
|
|
|
(144)
|
|
Prepaid expenses and
other assets
|
(3)
|
|
|
(11)
|
|
|
(8)
|
|
|
(37)
|
|
Trade accounts
payable
|
93
|
|
|
(76)
|
|
|
178
|
|
|
79
|
|
Accrued
liabilities
|
54
|
|
|
4
|
|
|
(7)
|
|
|
(32)
|
|
Income taxes,
net
|
(105)
|
|
|
44
|
|
|
(50)
|
|
|
(18)
|
|
Other non-current
liabilities
|
2
|
|
|
12
|
|
|
(3)
|
|
|
5
|
|
Subtotal
|
(48)
|
|
|
(86)
|
|
|
(48)
|
|
|
(260)
|
|
Net cash provided by
operating activities
|
269
|
|
|
232
|
|
|
563
|
|
|
476
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Additions to property,
buildings, equipment and
intangibles
|
(74)
|
|
|
(43)
|
|
|
(147)
|
|
|
(93)
|
|
Proceeds from sale or
redemption of assets and
business divestitures
|
2
|
|
|
13
|
|
|
17
|
|
|
13
|
|
Other - net
|
—
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
Net cash used in
investing activities
|
(72)
|
|
|
(30)
|
|
|
(130)
|
|
|
(82)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Net decrease in lines
of credit
|
—
|
|
|
(2)
|
|
|
—
|
|
|
(38)
|
|
Net (decrease)
increase in long-term debt
|
(8)
|
|
|
(2)
|
|
|
(8)
|
|
|
1,153
|
|
Proceeds from stock
options exercised
|
22
|
|
|
9
|
|
|
30
|
|
|
28
|
|
Payments for employee
taxes withheld from stock
awards
|
(26)
|
|
|
(9)
|
|
|
(28)
|
|
|
(14)
|
|
Purchases of treasury
stock
|
(108)
|
|
|
(1)
|
|
|
(283)
|
|
|
(101)
|
|
Cash dividends
paid
|
(95)
|
|
|
(86)
|
|
|
(176)
|
|
|
(164)
|
|
Other - net
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
Net cash (used in)
provided by financing activities
|
(213)
|
|
|
(91)
|
|
|
(463)
|
|
|
864
|
|
Exchange rate effect
on cash and cash equivalents
|
1
|
|
|
—
|
|
|
(8)
|
|
|
(15)
|
|
Net change in cash
and cash equivalents
|
(15)
|
|
|
111
|
|
|
(38)
|
|
|
1,243
|
|
Cash and cash
equivalents at beginning of period
|
562
|
|
|
1,492
|
|
|
585
|
|
|
360
|
|
Cash and cash
equivalents at end of period
|
$
|
547
|
|
|
$
|
1,603
|
|
|
$
|
547
|
|
|
$
|
1,603
|
|
SUPPLEMENTAL INFORMATION - CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited)
(In millions
of dollars, except for per share amounts)
The company supplemented the reporting of financial information
determined under U.S. generally accepted accounting principles
(GAAP) with certain non-GAAP financial measures, which the company
refers to as "adjusted" measures, including sales on an organic
daily basis and constant currency basis, adjusted gross profit,
adjusted gross margin, adjusted operating earnings, adjusted
operating margin, adjusted net earnings, adjusted tax rate and
adjusted diluted earnings per share. The company believes that
these non-GAAP measures provide meaningful information to assist
shareholders in understanding financial results and assessing
prospects for future performance. Management believes sales on an
organic daily basis and constant currency basis, adjusted gross
profit, adjusted gross margin, adjusted operating earnings,
adjusted operating margin, adjusted net earnings, adjusted tax rate
and adjusted diluted earnings per share are important indicators of
operations because they exclude items that may not be indicative of
our core operating results, and provide a better baseline for
analyzing trends in our underlying businesses. Because non-GAAP
financial measures are not standardized, it may not be possible to
compare these financial measures with other companies' non-GAAP
financial measures having the same or similar names. These adjusted
financial measures should not be considered in isolation or as a
substitute for reported results. These non-GAAP financial measures
reflect an additional way of viewing aspects of operations that,
when viewed with GAAP results, provide a more complete
understanding of the business. The company strongly encourages
investors and shareholders to review company financial statements
and publicly filed reports in their entirety and not to rely on any
single financial measure.
This press release also includes certain non-GAAP
forward-looking information. The company believes that a
quantitative reconciliation of such forward-looking information to
the most comparable financial measure calculated and presented in
accordance with GAAP cannot be made available without unreasonable
efforts. A reconciliation of these non-GAAP financial measures
would require the company to predict the timing and likelihood of
future restructurings, asset impairments, and other charges.
Neither of these forward-looking measures, nor their probable
significance, can be quantified with a reasonable degree of
accuracy. Accordingly, a reconciliation of the most directly
comparable forward-looking GAAP measures is not provided.
The reconciliations provided below reconcile GAAP financial
measures to the non-GAAP financial measures: sales on an organic
daily basis and constant currency basis, adjusted gross profit,
adjusted gross profit margin, adjusted operating earnings, adjusted
operating margin, adjusted net earnings, adjusted tax rate and
adjusted diluted earnings per share:
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Reported
sales
|
13.1
|
%
|
|
(1.9)
|
%
|
|
7.8
|
%
|
|
2.6
|
%
|
Day impact
|
—
|
|
|
—
|
|
|
0.8
|
|
|
(0.8)
|
|
Daily sales
|
13.1
|
%
|
|
(1.9)
|
%
|
|
8.6
|
|
|
1.8
|
|
Business divestitures
Âą
|
2.8
|
|
|
—
|
|
|
2.7
|
|
|
—
|
|
Organic daily
sales
|
15.9
|
%
|
|
(1.9)
|
%
|
|
11.3
|
%
|
|
1.8
|
%
|
Foreign
exchange
|
(0.9)
|
|
|
0.1
|
|
|
(1.0)
|
%
|
|
0.1
|
%
|
Organic daily,
constant
currency
|
15.0
|
%
|
|
(1.8)
|
%
|
|
10.3
|
%
|
|
1.9
|
%
|
|
Âą Represents the
results of the Fabory business (divested on June 30, 2020) and the
Grainger China business (divested on August 21, 2020).
|
In
millions
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2021
|
Gross
Margin
|
|
2020
|
Gross
Margin
|
|
2021
|
Gross
Margin
|
|
2020
|
Gross
Margin
|
Gross profit
reported
|
$
|
1,124
|
|
35.0
|
%
|
|
$
|
1,016
|
|
35.8
|
%
|
|
$
|
2,217
|
|
35.2
|
%
|
|
$
|
2,137
|
|
36.6
|
%
|
Gross profit
adjusted
|
$
|
1,124
|
|
35.0
|
%
|
|
$
|
1,016
|
|
35.8
|
%
|
|
$
|
2,217
|
|
35.2
|
%
|
|
$
|
2,137
|
|
36.6
|
%
|
SUPPLEMENTAL
INFORMATION - CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES (Unaudited) (In millions of dollars, except for per
share amounts)
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
|
Bps
Impact
|
|
2021
|
|
2020
|
|
Bps
Impact
|
Gross margin
reported
|
35.0
|
%
|
|
35.8
|
%
|
|
(75)
|
|
|
35.2
|
%
|
|
36.6
|
%
|
|
(135)
|
|
Pandemic-related
inventory
adjustments
|
2.0
|
|
|
—
|
|
|
|
|
1.9
|
|
|
—
|
|
|
|
Gross margin
excluding
pandemic-related inventory
adjustments
|
37.0
|
%
|
|
35.8
|
%
|
|
120
|
|
|
37.1
|
%
|
|
36.6
|
%
|
|
50
|
|
In
millions
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2021
|
Operating
Margin
|
|
2020
|
Operating
Margin
|
|
2021
|
Operating
Margin
|
|
2020
|
Operating
Margin
|
Operating earnings
reported
|
$
|
334
|
|
10.4
|
%
|
|
$
|
205
|
|
7.3
|
%
|
|
$
|
692
|
|
11.0
|
%
|
|
$
|
364
|
|
6.2
|
%
|
Restructuring, net,
impairment charges and
business divestiture
|
—
|
|
—
|
|
|
110
|
|
3.8
|
|
|
—
|
|
—
|
|
|
294
|
|
5.1
|
|
Operating earnings
adjusted
|
$
|
334
|
|
10.4
|
%
|
|
$
|
315
|
|
11.1
|
%
|
|
$
|
692
|
|
11.0
|
%
|
|
$
|
658
|
|
11.3
|
%
|
In
millions
|
Three Months
Ended
June 30,
|
|
|
Six Months
Ended
June 30,
|
|
|
2021
|
|
2020
|
%
|
|
2021
|
|
2020
|
%
|
Net earnings
reported
|
$
|
225
|
|
|
$
|
114
|
|
98
|
%
|
|
$
|
463
|
|
|
$
|
287
|
|
62
|
%
|
Restructuring, net,
impairment
charges and business divestiture
|
—
|
|
|
90
|
|
|
|
—
|
|
|
147
|
|
|
Net earnings
adjusted
|
$
|
225
|
|
|
$
|
204
|
|
11
|
%
|
|
$
|
463
|
|
|
$
|
434
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share reported
|
$
|
4.27
|
|
|
$
|
2.10
|
|
103
|
%
|
|
$
|
8.76
|
|
|
$
|
5.29
|
|
66
|
%
|
Pretax restructuring,
net, impairment
charges and business divestiture
|
—
|
|
|
2.03
|
|
|
|
—
|
|
|
5.42
|
|
|
Tax effect
Âą
|
—
|
|
|
(0.38)
|
|
|
|
—
|
|
|
(2.71)
|
|
|
Total, net of
tax
|
—
|
|
|
1.65
|
|
|
|
—
|
|
|
2.71
|
|
|
Diluted earnings per
share adjusted
|
$
|
4.27
|
|
|
$
|
3.75
|
|
14
|
%
|
|
$
|
8.76
|
|
|
$
|
8.00
|
|
10
|
%
|
|
Âą The tax impact of
adjustments is calculated based on the income tax rate in each
applicable jurisdiction, subject to deductibility limitations and
the company's ability to realize the associated tax benefits. The
tax effect in the prior year quarter was primarily related to the
divested Fabory business (divested June 30, 2020).
|
SUPPLEMENTAL
INFORMATION - CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES (Unaudited) (In millions of dollars, except for per
share amounts)
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
|
Bps
impact
|
|
2021
|
|
2020
|
|
Bps
impact
|
Effective tax rate
reported
|
23.6
|
%
|
|
30.2
|
%
|
|
(660)
|
|
|
24.7
|
%
|
|
3.9
|
%
|
|
2,080
|
|
Tax benefit related to
the Fabory
business
|
—
|
|
|
(4.4)
|
|
|
|
|
—
|
|
|
21.8
|
|
|
Tax impact of
restructuring, net,
impairment charges and business
divestiture
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
|
Effective tax rate
adjusted
|
23.6
|
%
|
|
25.8
|
%
|
|
(220)
|
|
|
24.7
|
%
|
|
25.7
|
%
|
|
(100)
|
|
View original
content:https://www.prnewswire.com/news-releases/grainger-reports-results-for-the-second-quarter-2021-301344802.html
SOURCE W.W. Grainger, Inc.