CHICAGO, Oct. 29, 2021 /PRNewswire/ --
Third Quarter Highlights
- Delivered sales of $3.4
billion, up 11.7%, compared to the third quarter of 2020; up
11.9% on an organic, daily, constant currency basis
- Expanded gross margin by 145 bps compared to the third
quarter of 2020, expanded by 205 bps sequentially
- Operating earnings of $438
million, up 17.4%, resulting in EPS of $5.65, growth of 25% versus the third quarter of
2020
- Returned $327 million to
shareholders through dividends and share repurchases
Grainger (NYSE: GWW) today reported results for the third
quarter 2021 with sales of $3.4
billion, up 11.7% and up 11.9% on an organic, daily,
constant currency basis compared to the third quarter 2020, driven
by strong performance in both the High-Touch Solutions N.A. and
Endless Assortment segments.
"During the third quarter, I spent significant time with
customers. They consistently commended Grainger on our ability to
fulfill orders and deliver products faster than others, and they
valued our teams' commitment to servicing their business needs,"
said DG Macpherson, Chairman and Chief Executive Officer. "Demand
for core products was very strong throughout the quarter, and
Grainger gained share and expanded margins in both segments.
Despite the current market and supply chain uncertainties, we are
confident in our ability to deliver solid performance in the fourth
quarter and into 2022."
2021 Third Quarter Financial Summary
($ in
millions)
|
Q3
2021
|
Q3
2020
|
Q3
Fav. (Unfav.) vs.
Prior
|
|
Reported
|
Adjusted1
|
Reported
|
Adjusted1
|
Reported
|
Adjusted1
|
Net
Sales
|
$3,372
|
$3,372
|
$3,018
|
$3,018
|
12%
|
12%
|
Gross
Profit
|
$1,250
|
$1,250
|
$1,074
|
$1,074
|
16%
|
16%
|
Operating
Earnings
|
$438
|
$438
|
$380
|
$374
|
16%
|
17%
|
Net Earnings
Attributable to
W.W. Grainger, Inc.
|
$297
|
$297
|
$240
|
$246
|
24%
|
21%
|
Diluted Earnings
Per Share
|
$5.65
|
$5.65
|
$4.41
|
$4.52
|
28%
|
25%
|
|
|
|
|
|
|
|
Gross
Margin
|
37.1%
|
37.1%
|
35.6%
|
35.6%
|
145 bps
|
145 bps
|
Operating
Margin
|
13.0%
|
13.0%
|
12.6%
|
12.4%
|
45 bps
|
65 bps
|
Tax
Rate
|
25.5%
|
25.5%
|
29.3%
|
26.5%
|
380 bps
|
100 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.
|
Revenue
Daily sales for the quarter increased 11.7% compared to the
third quarter of 2020 with the same number of selling days. On an
organic, constant currency basis, which excludes revenues from the
divested China business from the
prior year results, daily sales increased 11.9% as compared to the
third quarter of 2020. Foreign exchange contributed a 0.1%
favorable impact during the third quarter of 2021 compared to the
third quarter of 2020.
In the High-Touch Solutions N.A. segment, daily sales were up
12.0% versus the prior year third quarter due primarily to a strong
recovery in core, non-pandemic product growth, while pandemic
product sales remained elevated. In the Endless Assortment
segment, daily sales were up 12.7%, and up 14.9% on a daily,
constant currency basis, versus the third quarter of 2020. The
Endless Assortment revenue growth was solid, considering a very
strong third quarter 2020 comparison at Zoro U.S. and a
current challenging Japanese economy.
Gross Margin
Gross margin for the third quarter of 2021 was 37.1%, a 145
basis point increase over the prior year quarter driven by solid
margin expansion in both segments.
In the High-Touch Solutions N.A. segment, strong price
realization contributed to above neutral price/cost spread in the
third quarter 2021 and the company also continued to experience
improved pandemic-product mix over the prior year. In the Endless
Assortment segment, gross margin expanded by 115 basis points
versus the prior year third quarter primarily due to pricing
actions and freight efficiencies at Zoro U.S.
Earnings
Reported and adjusted operating earnings for the third quarter
of 2021 of $438 million were up 16%
on a reported basis, and up 17% on an adjusted basis, versus the
third quarter of 2020.
In the third quarter of 2021, reported and adjusted operating
margin of 13.0% increased 45 basis points on a reported basis, and
up 65 basis points on an adjusted basis, over the third quarter of
2020 on stronger margin in both segments.
Reported and adjusted earnings per share of $5.65 in the third quarter of 2021 increased 28%
on a reported basis, and increased 25% on an adjusted basis, versus
the third quarter of 2020. The increase in earnings per share was
due primarily to higher operating earnings.
Tax Rate
The third quarter 2021 reported tax rate was 25.5% versus 29.3%
in the third quarter of 2020; the adjusted tax rates were 25.5% and
26.5% for the third quarter of 2021 and 2020, respectively. The
variance in year over year reported tax rate was primarily driven
by the absence of tax impacts of the Company's investment in
Fabory, which the Company divested in the second quarter of
2020.
Cash Flow
Net cash provided by operating activities was $161 million and $311
million for the three months ended September 30, 2021 and 2020, respectively. The
decrease in cash from operating activities is primarily the result
of working capital investments. The company continued to build
core, non-pandemic inventory levels to support customer demand.
Lastly, distributions to shareholders through dividends and share
repurchases during the quarter totaled $327
million.
Guidance
The company is reaffirming the guidance ranges previously
provided for 2021. Given the solid results of the third
quarter, the company expects revenue to finish the year near the
midpoint and expects all other metrics to fall between the low end
and the midpoint of the range.
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 October 29, 2021 to discuss the third 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 third 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, including the Delta variant and any other variants that
may emerge (COVID-19), as well as the impact of actions taken or
contemplated by government authorities to mitigate the spread of
COVID-19 (such as vaccine mandates for certain Federal contractors
and anticipated Occupational Health and Safety Administration
safety directives, mask mandates, social distancing or other
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, the acquisition of excess inventory leading to additional
inventory carrying costs and inventory obsolescence, raw material,
inventory and labor shortages, continued strain on global supply
chains, and diminished transportation availability and efficiency,
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net sales
|
$
|
3,372
|
|
|
$
|
3,018
|
|
|
$
|
9,663
|
|
|
$
|
8,856
|
|
Cost of goods sold
|
2,122
|
|
|
1,944
|
|
|
6,196
|
|
|
5,645
|
|
Gross profit
|
1,250
|
|
|
1,074
|
|
|
3,467
|
|
|
3,211
|
|
Selling, general and
administrative expenses
|
812
|
|
|
694
|
|
|
2,337
|
|
|
2,467
|
|
Operating earnings
|
438
|
|
|
380
|
|
|
1,130
|
|
|
744
|
|
Other (income) expense:
|
|
|
|
|
|
|
|
Interest expense
– net
|
22
|
|
|
23
|
|
|
65
|
|
|
72
|
|
Other – net
|
(6)
|
|
|
(5)
|
|
|
(19)
|
|
|
(16)
|
|
Total other
expense – net
|
16
|
|
|
18
|
|
|
46
|
|
|
56
|
|
Earnings before income taxes
|
422
|
|
|
362
|
|
|
1,084
|
|
|
688
|
|
Income tax
provision
|
107
|
|
|
106
|
|
|
271
|
|
|
118
|
|
Net earnings
|
315
|
|
|
256
|
|
|
813
|
|
|
570
|
|
Less: Net earnings
attributable to noncontrolling
interest
|
18
|
|
|
16
|
|
|
53
|
|
|
43
|
|
Net earnings
attributable to W.W. Grainger, Inc.
|
$
|
297
|
|
|
$
|
240
|
|
|
$
|
760
|
|
|
$
|
527
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
5.68
|
|
|
$
|
4.43
|
|
|
$
|
14.48
|
|
|
$
|
9.74
|
|
Diluted
|
$
|
5.65
|
|
|
$
|
4.41
|
|
|
$
|
14.40
|
|
|
$
|
9.70
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
51.8
|
|
|
53.6
|
|
|
52.1
|
|
|
53.6
|
|
Diluted
|
52.1
|
|
|
53.9
|
|
|
52.4
|
|
|
53.8
|
|
Diluted Earnings Per
Share
|
|
|
|
|
|
|
|
Net earnings as
reported
|
$
|
297
|
|
|
$
|
240
|
|
|
$
|
760
|
|
|
$
|
527
|
|
Earnings allocated to
participating securities
|
(2)
|
|
|
(2)
|
|
|
(6)
|
|
|
(5)
|
|
Net earnings
available to common shareholders
|
$
|
295
|
|
|
$
|
238
|
|
|
$
|
754
|
|
|
$
|
522
|
|
Weighted average
shares adjusted for dilutive
securities
|
52.1
|
|
|
53.9
|
|
|
52.4
|
|
|
53.8
|
|
Diluted earnings per
share
|
$
|
5.65
|
|
|
$
|
4.41
|
|
|
$
|
14.40
|
|
|
$
|
9.70
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In millions of
dollars)
|
|
|
|
(Unaudited)
|
|
|
Assets
|
September 30,
2021
|
|
December 31,
2020
|
Cash and cash
equivalents
|
$
|
328
|
|
|
$
|
585
|
|
Accounts receivable –
net(1)
|
1,742
|
|
|
1,474
|
|
Inventories –
net
|
1,786
|
|
|
1,733
|
|
Prepaid expenses and
other current assets
|
149
|
|
|
127
|
|
Total current
assets
|
4,005
|
|
|
3,919
|
|
Property, buildings
and equipment – net
|
1,429
|
|
|
1,395
|
|
Goodwill
|
387
|
|
|
391
|
|
Intangibles –
net
|
233
|
|
|
228
|
|
Other
assets
|
336
|
|
|
362
|
|
Total
assets
|
$
|
6,390
|
|
|
$
|
6,295
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current maturities of
long-term debt
|
$
|
—
|
|
|
$
|
8
|
|
Trade accounts
payable(2)
|
933
|
|
|
779
|
|
Accrued compensation
and benefits
|
259
|
|
|
307
|
|
Accrued
expenses
|
336
|
|
|
305
|
|
Income taxes
payable
|
22
|
|
|
42
|
|
Total current
liabilities
|
1,550
|
|
|
1,441
|
|
Long-term debt – less
current maturities
|
2,372
|
|
|
2,389
|
|
Deferred income taxes
and tax uncertainties
|
88
|
|
|
110
|
|
Other non-current
liabilities
|
263
|
|
|
262
|
|
Shareholders'
equity(3)
|
2,117
|
|
|
2,093
|
|
Total liabilities and
shareholders' equity
|
$
|
6,390
|
|
|
$
|
6,295
|
|
|
|
(1)
|
Accounts receivable -
net increased $268 million driven by growth in credit
sales.
|
(2)
|
Trade accounts
payable increased $154 million primarily driven by
inventory purchases to support customers' return-to-work
needs.
|
(3)
|
Common stock
outstanding as of September 30, 2021 was 51,520,047
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
315
|
|
|
$
|
256
|
|
|
$
|
813
|
|
|
$
|
570
|
|
Provision for credit
losses
|
4
|
|
|
4
|
|
|
12
|
|
|
18
|
|
Deferred income taxes
and tax uncertainties
|
1
|
|
|
9
|
|
|
(7)
|
|
|
9
|
|
Depreciation and
amortization
|
45
|
|
|
42
|
|
|
137
|
|
|
137
|
|
Impairment of
goodwill, intangible and long-lived
assets
|
—
|
|
|
—
|
|
|
—
|
|
|
177
|
|
Net losses (gains)
from sale or redemption of assets
and business divestitures
|
1
|
|
|
(6)
|
|
|
(3)
|
|
|
104
|
|
Stock-based
compensation
|
8
|
|
|
10
|
|
|
33
|
|
|
36
|
|
Subtotal
|
59
|
|
|
59
|
|
|
172
|
|
|
481
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(118)
|
|
|
(32)
|
|
|
(298)
|
|
|
(145)
|
|
Inventories
|
(86)
|
|
|
(78)
|
|
|
(64)
|
|
|
(222)
|
|
Prepaid expenses and
other assets
|
7
|
|
|
8
|
|
|
(1)
|
|
|
(29)
|
|
Trade accounts
payable
|
(11)
|
|
|
66
|
|
|
167
|
|
|
145
|
|
Accrued
liabilities
|
(6)
|
|
|
19
|
|
|
(13)
|
|
|
(13)
|
|
Income taxes -
net
|
8
|
|
|
(1)
|
|
|
(42)
|
|
|
(19)
|
|
Other non-current
liabilities
|
(7)
|
|
|
14
|
|
|
(10)
|
|
|
19
|
|
Subtotal
|
(213)
|
|
|
(4)
|
|
|
(261)
|
|
|
(264)
|
|
Net cash provided by
operating activities
|
161
|
|
|
311
|
|
|
724
|
|
|
787
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Additions to property,
buildings, equipment and
intangibles
|
(50)
|
|
|
(59)
|
|
|
(197)
|
|
|
(152)
|
|
Proceeds from sale or
redemption of assets and
business divestitures
|
—
|
|
|
9
|
|
|
17
|
|
|
22
|
|
Other - net
|
—
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
Net cash used in
investing activities
|
(50)
|
|
|
(50)
|
|
|
(180)
|
|
|
(132)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Net decrease in lines
of credit
|
—
|
|
|
(15)
|
|
|
—
|
|
|
(53)
|
|
Net (decrease)
increase in long-term debt
|
—
|
|
|
(931)
|
|
|
(8)
|
|
|
222
|
|
Proceeds from stock
options exercised
|
1
|
|
|
19
|
|
|
31
|
|
|
47
|
|
Payments for employee
taxes withheld from stock
awards
|
(1)
|
|
|
(2)
|
|
|
(29)
|
|
|
(16)
|
|
Purchases of treasury
stock
|
(242)
|
|
|
—
|
|
|
(525)
|
|
|
(101)
|
|
Cash dividends
paid
|
(85)
|
|
|
(82)
|
|
|
(261)
|
|
|
(246)
|
|
Other - net
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
Net cash used in
financing activities
|
(327)
|
|
|
(1,011)
|
|
|
(790)
|
|
|
(147)
|
|
Exchange rate effect
on cash and cash equivalents
|
(3)
|
|
|
6
|
|
|
(11)
|
|
|
(9)
|
|
Net change in cash
and cash equivalents
|
(219)
|
|
|
(744)
|
|
|
(257)
|
|
|
499
|
|
Cash and cash
equivalents at beginning of period
|
547
|
|
|
1,603
|
|
|
585
|
|
|
360
|
|
Cash and cash
equivalents at end of period
|
$
|
328
|
|
|
$
|
859
|
|
|
$
|
328
|
|
|
$
|
859
|
|
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Reported
sales
|
11.7
|
%
|
|
2.4
|
%
|
|
9.1
|
%
|
|
2.5
|
%
|
Day impact
|
—
|
|
|
—
|
|
|
0.6
|
|
|
(0.5)
|
|
Daily sales
|
11.7
|
%
|
|
2.4
|
%
|
|
9.7
|
|
|
2.0
|
|
Business divestitures
¹
|
0.3
|
|
|
2.2
|
|
|
1.9
|
|
|
0.7
|
|
Organic daily
sales
|
12.0
|
%
|
|
4.6
|
%
|
|
11.6
|
%
|
|
2.7
|
%
|
Foreign
exchange
|
(0.1)
|
|
|
—
|
|
|
(0.7)
|
%
|
|
0.1
|
%
|
Organic daily,
constant currency
|
11.9
|
%
|
|
4.6
|
%
|
|
10.9
|
%
|
|
2.8
|
%
|
|
¹ 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
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
Gross
Margin
|
|
2020
|
Gross
Margin
|
|
2021
|
Gross
Margin
|
|
2020
|
Gross
Margin
|
Gross profit
reported
|
$
|
1,250
|
|
37.1
|
%
|
|
$
|
1,074
|
|
35.6
|
%
|
|
$
|
3,467
|
|
35.9
|
%
|
|
$
|
3,211
|
|
36.3
|
%
|
Gross profit
adjusted
|
$
|
1,250
|
|
37.1
|
%
|
|
$
|
1,074
|
|
35.6
|
%
|
|
$
|
3,467
|
|
35.9
|
%
|
|
$
|
3,211
|
|
36.3
|
%
|
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)
|
|
In
millions
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
Operating
Margin
|
|
2020
|
Operating
Margin
|
|
2021
|
Operating
Margin
|
|
2020
|
Operating
Margin
|
Operating earnings
reported
|
$
|
438
|
|
13.0
|
%
|
|
$
|
380
|
|
12.6
|
%
|
|
$
|
1,130
|
|
11.7
|
%
|
|
$
|
744
|
|
8.4
|
%
|
Restructuring, net,
impairment charges and business divestiture (gains)
losses
|
—
|
|
—
|
|
|
(6)
|
|
(0.2)
|
|
|
—
|
|
—
|
|
|
288
|
|
3.2
|
|
Operating earnings
adjusted
|
$
|
438
|
|
13.0
|
%
|
|
$
|
374
|
|
12.4
|
%
|
|
$
|
1,130
|
|
11.7
|
%
|
|
$
|
1,032
|
|
11.6
|
%
|
In
millions
|
Three Months
Ended
September 30,
|
|
|
Nine Months
Ended
September 30,
|
|
|
2021
|
|
2020
|
%
|
|
2021
|
|
2020
|
%
|
Net earnings
reported
|
$
|
297
|
|
|
$
|
240
|
|
24
|
%
|
|
$
|
760
|
|
|
$
|
527
|
|
44
|
%
|
Restructuring, net,
impairment charges and business divestiture (gains)
losses
|
—
|
|
|
6
|
|
|
|
—
|
|
|
153
|
|
|
Net earnings
adjusted
|
$
|
297
|
|
|
$
|
246
|
|
21
|
%
|
|
$
|
760
|
|
|
$
|
680
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share reported
|
$
|
5.65
|
|
|
$
|
4.41
|
|
28
|
%
|
|
$
|
14.40
|
|
|
$
|
9.70
|
|
48
|
%
|
Pretax restructuring,
net, impairment charges and business divestiture (gains)
losses
|
—
|
|
|
(0.10)
|
|
|
|
—
|
|
|
5.29
|
|
|
Tax effect
¹
|
—
|
|
|
0.21
|
|
|
|
—
|
|
|
(2.47)
|
|
|
Total, net of
tax
|
—
|
|
|
0.11
|
|
|
|
—
|
|
|
2.82
|
|
|
Diluted earnings per
share adjusted
|
$
|
5.65
|
|
|
$
|
4.52
|
|
25
|
%
|
|
$
|
14.40
|
|
|
$
|
12.52
|
|
15
|
%
|
|
¹ 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 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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2021
|
|
2020
|
|
Bps
impact
|
|
2021
|
|
2020
|
|
Bps
impact
|
Effective tax rate
reported
|
25.5
|
%
|
|
29.3
|
%
|
|
(380)
|
|
|
25.0
|
%
|
|
17.3
|
%
|
|
770
|
|
Tax benefit related to
the Fabory business
|
—
|
|
|
(3.3)
|
|
|
|
|
—
|
|
|
8.7
|
|
|
Tax impact of
restructuring, net, impairment charges and business divestitures
(gains) losses
|
—
|
|
|
0.5
|
|
|
|
|
—
|
|
|
—
|
|
|
|
Effective tax rate
adjusted
|
25.5
|
%
|
|
26.5
|
%
|
|
(100)
|
|
|
25.0
|
%
|
|
26.0
|
%
|
|
(100)
|
|
###
View original
content:https://www.prnewswire.com/news-releases/grainger-reports-results-for-the-third-quarter-2021-301411579.html
SOURCE W.W. Grainger, Inc.