Group 1 - The focus is on identifying exceptional companies with a market capitalization of less than $10 billion that can reinvest capital for impressive returns [1] - The ideal companies should demonstrate a long-term capability of capital compounding with a high compound annual growth rate, potentially delivering tenfold returns or greater [1] - A long-term investment perspective is emphasized to generate higher returns compared to market indices, especially in a rapidly evolving investment landscape [1] Group 2 - A conservative investment strategy is primarily adopted, with occasional pursuit of opportunities that have a favorable risk-reward ratio [1] - Careful consideration is given to ventures with substantial upside potential and limited downside, maintaining overall portfolio stability [1]

Company Overview - W.W. Grainger Inc. is a broad line, business-to-business distributor of maintenance, repair, and operating (MRO) products and services, incorporated in 1928 [11] - The company's operations are primarily in North America, Japan, and the U.K., serving a wide array of industries including government, manufacturing, transportation, commercial, and contractors [11] Investment Ratings - W.W. Grainger has a Zacks Rank of 3 (Hold) with a VGM Score of A, indicating a solid position in the market [12] - The company is considered a top pick for growth investors, with a Growth Style Score of B, forecasting year-over-year earnings growth of 5.7% for the current fiscal year [12] Earnings Estimates - One analyst revised their earnings estimate upwards in the last 60 days for fiscal 2024, with the Zacks Consensus Estimate increasing by $0.05 to $38.76 per share [12] - W.W. Grainger boasts an average earnings surprise of 1.2%, suggesting a positive trend in earnings performance [12] Conclusion - With a solid Zacks Rank and top-tier Growth and VGM Style Scores, W.W. Grainger should be on investors' short list for potential investment opportunities [13]

Core Insights - W.W. Grainger reported $4.39 billion in revenue for Q3 2024, a 4.3% year-over-year increase, but fell short of the Zacks Consensus Estimate by 0.38% [1] - The company's EPS for the quarter was $9.87, compared to $9.43 a year ago, but also missed the consensus estimate of $9.98 by 1.10% [1] Financial Performance Metrics - Total reported growth was 4.3%, matching the average estimate from six analysts [3] - Net Sales for High-Touch Solutions N.A. were $3.52 billion, slightly below the average estimate of $3.54 billion, reflecting a year-over-year increase of 3.3% [3] - Net Sales for Other segments reached $82 million, exceeding the average estimate of $76.12 million, with a year-over-year change of 12.3% [3] - Net Sales for Endless Assortment were $791 million, surpassing the average estimate of $786.37 million, marking an 8.1% year-over-year increase [3] - Operating earnings for High-Touch Solutions N.A. were $617 million, below the average estimate of $628.92 million [3] - Operating earnings for Endless Assortment were $70 million, exceeding the average estimate of $63.11 million [3] - Operating losses for Other segments were -$1 million, better than the average estimate of -$2.63 million [3] Stock Performance - W.W. Grainger's shares have returned +5.9% over the past month, outperforming the Zacks S&P 500 composite's +1% change [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [4]

Financial Performance - Net sales for Q3 2024 reached $4,388 million, a 4.3% increase from $4,208 million in Q3 2023[5] - Gross profit for Q3 2024 was $1,720 million, up from $1,655 million in Q3 2023, reflecting a gross margin of 39.2%[5] - Operating earnings increased to $686 million in Q3 2024, compared to $667 million in Q3 2023, with an operating margin of 15.6%[5] - Net earnings attributable to W.W. Grainger, Inc. for Q3 2024 were $486 million, a rise from $476 million in Q3 2023, resulting in diluted earnings per share of $9.87[5] - Comprehensive earnings attributable to W.W. Grainger, Inc. for Q3 2024 were $524 million, compared to $441 million in Q3 2023[7] - Net earnings for the three months ended September 30, 2023, were $493 million, compared to $490 million for the same period in 2022, representing a year-over-year increase of 0.6%[14] - Diluted earnings per share for Q3 2024 were $9.87, a 4.7% increase from $9.43 in Q3 2023[105] - For the nine months ended September 30, 2024, net earnings attributable to W.W. Grainger, Inc. were $1,446 million, reflecting a 0.8% increase compared to the prior year[107] - Diluted earnings per share for the same period increased by 3.3% to $29.25[107] Cash and Liquidity - Cash and cash equivalents at the end of Q3 2024 were $1,448 million, significantly higher than $660 million at the end of 2023[10] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $1,683 million, compared to $1,427 million for the same period in 2023[12] - The company reported a decrease in cash used in financing activities to $615 million for the nine months ended September 30, 2024, from $839 million in the prior year, primarily due to the issuance of long-term debt[113] - Working capital as of September 30, 2024, was $3,112 million, an increase of $34 million compared to $3,078 million as of December 31, 2023[114] - The company plans to return excess cash to shareholders through cash dividends and share repurchases, funded by cash flows generated from operations[109] Debt and Capital Structure - Total debt increased from $2,300 million as of December 31, 2023, to $2,776 million as of September 30, 2024, reflecting the issuance of $500 million in unsecured 4.45% senior notes[36][38] - Total debt as a percent of total capitalization increased to 41.9% as of September 30, 2024, from 40.1% as of December 31, 2023[115] - The company incurred debt issuance costs related to its Senior Notes, with cumulative unamortized costs of $23 million as of September 30, 2024[39] Shareholder Returns - The company declared a quarterly dividend of $2.05 per share, payable on December 1, 2024[57] - The company reported a total of $739 million in treasury stock purchases during Q3 2024[12] - Grainger repurchased a total of 233,609 shares in Q3 2024 at an average price of $961.49 per share[132] - The company has 4,746,710 shares remaining under its share repurchase program authorized on April 24, 2024[134] Operational Metrics - Daily net sales for Q3 2024 were $67.5 million, a slight decrease of 2.6% from $67.9 million in Q3 2023[69] - The revenue breakdown for the three months ended September 30, 2024, shows that manufacturing accounted for 30% of total company revenue, consistent with the previous year[26] - High-Touch Solutions N.A. segment reported net sales of $3,515 million, a 3.3% increase from $3,403 million in Q3 2023[76] - Endless Assortment segment achieved net sales of $791 million, up from $732 million, marking an increase of 8.1%[53] Expenses - Selling, general and administrative expenses rose to $1,034 million, a 4.7% increase compared to $988 million in the same quarter last year[72] - SG&A expenses for the nine months ended September 30, 2024, were $3,078 million, an increase of $153 million, or 5%, with SG&A leverage decreasing 40 basis points compared to the same period in 2023[88] Taxation - The effective tax rate for Q3 2024 was 24.8%, compared to 24.4% in Q3 2023[73] - Grainger's effective tax rate for the nine months ended September 30, 2024, was 24.0%[107] Corporate Governance and Risk Management - There were no material changes in Grainger's internal control over financial reporting for the quarter ended September 30, 2024[128] - Grainger's disclosure controls and procedures were evaluated as effective by the CEO and CFO as of the end of the reporting period[127] - There have been no material changes to the risk factors previously disclosed in the 2023 Form 10-K[131] - The company has not reported any legal proceedings updates in this quarter[130]

W.W. Grainger, Inc. (GWW) has reported earnings per share (EPS) of $9.87 in third-quarter 2024, missing the Zacks Consensus Estimate of $9.98. However, the bottom line improved 4.7% year over year, aided by the strong performances of the High-Touch Solutions N.A. and Endless Assortment segments.Grainger’s quarterly revenues rose 4.3% year over year to $4.39 billion. The top line, however, missed the Zacks Consensus Estimate of $4.41 billion. Daily sales increased 2.6% from the prior-year quarter. We had pre ...

Financial Data and Key Metrics Changes - Total company reported sales for Q3 2024 increased by 4.3% or 4% on a daily organic constant-currency basis, with operating margins remaining healthy at 15.6% and EPS rising by 4.7% to $9.87 [15][18] - Operating cash flow for the quarter was $611 million, allowing the company to return $328 million to shareholders through dividends and share repurchases [16] Business Line Data and Key Metrics Changes - High-Touch Solutions segment sales grew by 3.3% on a reported basis or 2.5% on a daily organic constant-currency basis, driven by solid volume growth and improved price contribution [19] - Endless Assortment segment sales increased by 8.1% or 11.5% on a daily constant-currency basis, with Zoro U.S. up 11.3% and MonotaRO achieving 15.4% growth in local constant currency [27][30] Market Data and Key Metrics Changes - The U.S. MRO market is estimated to have grown between 2% and 2.5% in the quarter, with price contributing nearly all of the market growth [23] - High-Touch Solutions U.S. business grew at 2.6% organically, resulting in a market outgrowth of approximately 50 basis points [24][26] Company Strategy and Development Direction - The company is focused on enhancing service capabilities and expanding its distribution center network, with construction beginning on a new distribution center in Houston [13] - Investments in demand generation activities, including marketing and seller headcount, are expected to create long-term advantages despite a sluggish macro environment [42][48] Management's Comments on Operating Environment and Future Outlook - Management noted that while the demand environment remains muted, the business continues to perform well, and they are confident in meeting their goals for the year [16][73] - The updated earnings guidance for 2024 includes daily organic constant-currency sales growth of between 4.5% and 5.25% and a diluted adjusted EPS range of $38.65 to $39.35 [31] Other Important Information - The company was recognized as the top-ranked company across all industries on the American Opportunity Index, highlighting its commitment to employee growth and development [36] Q&A Session Summary Question: What drove the acceleration in Endless Assortment growth this quarter? - Management attributed the growth to MonotaRO's success with enterprise customers and improvements with small businesses, along with strong B2B growth at Zoro [38][39] Question: How does the company balance investment spending in a sluggish macro environment? - Management believes that demand generation investments are crucial even in tough times, and they continue to drive productivity in core operations [42][43] Question: What are the thoughts on balance sheet options regarding stock buybacks or M&A? - The company plans to return excess cash to shareholders through share repurchases and does not envision changes to its capital allocation strategy [45] Question: What are the expectations for 2025 in terms of outgrowth? - Management expects 2025 to start similarly to the end of 2024, with continued investments in leveraging data assets for better customer solutions [50] Question: How is KeepStock performing and what are the implications of Amazon's new program? - KeepStock continues to grow faster than the overall business, and management feels confident in their ability to provide value despite Amazon's moves into higher-touch offerings [66][68]

W.W. Grainger (GWW) came out with quarterly earnings of $9.87 per share, missing the Zacks Consensus Estimate of $9.98 per share. This compares to earnings of $9.43 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -1.10%. A quarter ago, it was expected that this seller of maintenance and other supplies would post earnings of $9.58 per share when it actually produced earnings of $9.76, delivering a surprise of 1.88%.Over the las ...

GRAINGER REPORTS RESULTS FOR THE THIRD QUARTER 2024 Continued strong execution fueling results; Company narrows 2024 earnings outlook Third Quarter Highlights • Delivered sales of $4.4 billion, up 4.3%, or 4.0% on a daily, organic constant currency basis • Achieved operating margin of 15.6%, down 30 basis points • Generated diluted EPS of $9.87, up 4.7% • Produced $611 million in operating cash flow and returned $328 million to Grainger shareholders through dividends and share repurchases • Narrowing 2024 t ...

Continued strong execution fueling results;Company narrows 2024 earnings outlookThird Quarter Highlights Delivered sales of $4.4 billion, up 4.3%, or 4.0% on a daily, organic constant currency basis Achieved operating margin of 15.6%, down 30 basis points Generated diluted EPS of $9.87, up 4.7% Produced $611 million in operating cash flow and returned $328 million to Grainger shareholders through dividends and share repurchases Narrowing 2024 total Company earnings guidance ranges, including daily, organic ...

For Immediate Release Chicago, IL – October 30, 2024 – Today, Zacks Equity Research like Siemens (SIEGY) , W.W. Grainger, Inc. (GWW) and SiteOne Landscape Supply, Inc. (SITE) . Industry: Industrial Services Link: https://www.zacks.com/commentary/2359697/3-industrial-services-stocks-to-consider-amid-industrychallenges The Zacks Industrial Services industry has been bearing the brunt of the prolonged contraction in the manufacturing sector as customers remain cautious about spending. Flared-up input costs hav ...