Grainger(GWW) - 2025 Q1 - Quarterly Results

Financial Performance - Sales for Q1 2025 were $4.3 billion, an increase of 1.7% year-over-year, or 4.4% on a daily, constant currency basis[3] - Operating earnings reached$ 672 million, up 0.4% compared to Q1 2024, with an operating margin of 15.6%, a decrease of 20 basis points[11] - Diluted earnings per share (EPS) for Q1 2025 were $9.86, reflecting a 2.5% increase from Q1 2024[12] - Gross profit margin improved to 39.7%, up 30 basis points from the prior year[9] - Net earnings for Q1 2025 were$ 500 million, a slight increase from $497 million in Q1 2024, reflecting a growth of 0.6%[28] - Reported sales growth for the total company in Q1 2025 was 1.7%, with daily sales growth at 3.3% compared to the prior year period[38] Segment Performance - The High-Touch Solutions - N.A. segment saw a sales decline of 0.2%, but a 1.9% increase on a daily, constant currency basis, while the Endless Assortment segment grew by 10.3%[8] - The Endless Assortment segment's gross profit margin increased by 30 basis points due to margin improvements at Zoro[10] Cash Flow and Shareholder Returns - Generated$ 646 million in operating cash flow, with free cash flow of $521 million after$ 125 million in capital expenditures[14] - The company returned $380 million to shareholders through dividends and share repurchases, with a quarterly dividend increase of 10%[5] - Free cash flow for Q1 2025 was$ 521 million, calculated as net cash provided by operating activities of $646 million minus capital expenditures of$ 125 million[39] Guidance and Projections - Full year 2025 guidance reaffirms net sales between $17.6 billion and$ 18.1 billion, with sales growth projected at 2.7% to 5.2%[16] Tax and Liabilities - The effective tax rate for Q1 2025 was 23.9%, down from 24.2% in Q1 2024[13] - Current liabilities decreased from $2,305 million in December 2024 to$ 2,017 million in March 2025, a reduction of approximately 12.5%[26] Assets and Debt - Total assets decreased from $8,829 million as of December 31, 2024, to$ 8,658 million as of March 31, 2025, representing a decline of approximately 1.9%[26] - Cash and cash equivalents at the end of Q1 2025 were $666 million, down from$ 1,036 million at the beginning of the period, marking a decrease of 35.6%[28] - Trade accounts payable increased from $952 million in December 2024 to$ 1,114 million in March 2025, an increase of approximately 17%[26] - The company’s long-term debt remained stable at $2,278 million as of March 31, 2025, compared to$ 2,279 million at the end of 2024[26] Credit Losses - The company reported a provision for credit losses of $7 million in Q1 2025, compared to$ 6 million in Q1 2024, reflecting a 16.7% increase[28]