Grainger(GWW) - 2024 Q1 - Quarterly Report

Financial Performance - Net sales for Q1 2024 increased to $4,235 million, up 3.5$4,091 million in Q1 2023[11] - Gross profit for Q1 2024 was $1,668 million, compared to$1,634 million in Q1 2023, reflecting a gross margin of 39.4%[11] - Operating earnings decreased slightly to $669 million in Q1 2024 from$680 million in Q1 2023[11] - Net earnings attributable to W.W. Grainger, Inc. for Q1 2024 were $478 million, down from$488 million in Q1 2023[11] - Comprehensive earnings attributable to W.W. Grainger, Inc. for Q1 2024 were $443 million, down from$492 million in Q1 2023[14] - Diluted earnings per share for the three months ended March 31, 2024, was $9.62, slightly up from$9.61 in the same period of 2023[77] - Daily net sales for the three months ended March 31, 2024, were $66.2 million, reflecting a 3.5$63.9 million in the same period of 2023[72] - Daily organic constant currency net sales increased by 4.9% to $67.1 million in Q1 2024, compared to$65.2 million in Q1 2023[81] Cash Flow and Liquidity - Cash and cash equivalents increased to $804 million as of March 31, 2024, compared to$660 million at the end of 2023[17] - Net cash provided by operating activities for Q1 2024 was $661 million, significantly higher than$454 million in Q1 2023[19] - The company paid cash dividends of $105 million in Q1 2024, up from$87 million in Q1 2023[19] - Cash and cash equivalents as of March 31, 2024, were $804 million, up from$660 million as of December 31, 2023, with total available liquidity of approximately $2.1 billion[94] Assets and Liabilities - Total assets rose to$8,400 million as of March 31, 2024, up from $8,147 million at the end of 2023[17] - The Company reported a total debt of$2.284 billion as of March 31, 2024, compared to $2.300 billion as of December 31, 2023[42] - Total debt as a percentage of total capitalization was 39.4$3.754 billion as of March 31, 2024, an increase from $3.718 billion as of December 31, 2023[37] - Goodwill decreased to$364 million as of March 31, 2024, from 370 million as of December 31, 2023, with no impairments recorded during the period[39] Expenses - Selling, general and administrative (SG&A) expenses increased by 5% to 999 million for the three months ended March 31, 2024, compared to 954 million in the same period of 2023[75] - Selling, general and administrative (SG&A) expenses rose to 813 million, a 4.9% increase from $775 million in Q1 2023, primarily due to higher marketing and payroll expenses[86] Market and Economic Conditions - The Company continues to monitor macroeconomic conditions, including inflation and potential recession impacts, which may affect its operations and financial results[68] - The company continues to face risks from inflation, higher product costs, and macroeconomic pressures[110] - Grainger's responses to market pressures and competitive pricing are critical to maintaining gross profit margins[110] - The Company reported no changes in internal control over financial reporting for the quarter ended March 31, 2024[115] - There have been no material changes to the risk factors previously disclosed in the 2023 Form 10-K[119] Shareholder Returns - The Company declared a quarterly dividend of$2.05 per share, payable on June 1, 2024, to shareholders of record on May 13, 2024[61] - Grainger's share repurchase program authorized the repurchase of up to 5 million shares with no expiration date, replacing the previous program from April 2021[120] - A total of 300,443 shares were purchased in the first quarter of 2024 at an average price of $950.00 per share[120] Risk Management - Forward-looking statements indicate that the company expects to face risks and uncertainties that could impact future results[108][109] - Grainger's primary market risk exposures include changes in foreign currency exchange and interest rates, with no material changes reported from the previous year[113] - The company has not experienced any major loss of customers or disruption in supply sources recently[110] - Grainger is committed to executing its environmental, social, and governance initiatives despite ongoing market challenges[110]