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Grainger(GWW) - 2024 Q3 - Quarterly Report
GWWGrainger(GWW)2024-10-31 20:32
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Financial Performance - Net sales for Q3 2024 reached 4,388million,a4.34,388 million, a 4.3% increase from 4,208 million in Q3 2023[5] - Gross profit for Q3 2024 was 1,720million,upfrom1,720 million, up from 1,655 million in Q3 2023, reflecting a gross margin of 39.2%[5] - Operating earnings increased to 686millioninQ32024,comparedto686 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 486million,arisefrom486 million, a rise from 476 million in Q3 2023, resulting in diluted earnings per share of 9.87[5]−ComprehensiveearningsattributabletoW.W.Grainger,Inc.forQ32024were9.87[5] - Comprehensive earnings attributable to W.W. Grainger, Inc. for Q3 2024 were 524 million, compared to 441millioninQ32023[7]−NetearningsforthethreemonthsendedSeptember30,2023,were441 million in Q3 2023[7] - Net earnings for the three months ended September 30, 2023, were 493 million, compared to 490millionforthesameperiodin2022,representingayear−over−yearincreaseof0.6490 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 9.43inQ32023[105]−FortheninemonthsendedSeptember30,2024,netearningsattributabletoW.W.Grainger,Inc.were9.43 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]CashandLiquidity−CashandcashequivalentsattheendofQ32024were29.25[107] Cash and Liquidity - Cash and cash equivalents at the end of Q3 2024 were 1,448 million, significantly higher than 660millionattheendof2023[10]−NetcashprovidedbyoperatingactivitiesfortheninemonthsendedSeptember30,2024,was660 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 1,427millionforthesameperiodin2023[12]−Thecompanyreportedadecreaseincashusedinfinancingactivitiesto1,427 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 839millionintheprioryear,primarilyduetotheissuanceoflong−termdebt[113]−WorkingcapitalasofSeptember30,2024,was839 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 34millioncomparedto34 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 2,300millionasofDecember31,2023,to2,300 million as of December 31, 2023, to 2,776 million as of September 30, 2024, reflecting the issuance of 500millioninunsecured4.45500 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 2.05pershare,payableonDecember1,2024[57]−Thecompanyreportedatotalof2.05 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 961.49pershare[132]−Thecompanyhas4,746,710sharesremainingunderitssharerepurchaseprogramauthorizedonApril24,2024[134]OperationalMetrics−DailynetsalesforQ32024were961.49 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 67.9millioninQ32023[69]−TherevenuebreakdownforthethreemonthsendedSeptember30,2024,showsthatmanufacturingaccountedfor3067.9 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 3,403millioninQ32023[76]−EndlessAssortmentsegmentachievednetsalesof3,403 million in Q3 2023[76] - Endless Assortment segment achieved net sales of 791 million, up from 732million,markinganincreaseof8.1732 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]