Grainger(US:GWW)2025-05-01 20:53Financial Performance - Net sales for Q1 2025 were $4,306 million, a 1.7% increase from $4,235 million in Q1 2024[10] - Gross profit for Q1 2025 was $1,710 million, up from $1,668 million in Q1 2024, reflecting a gross margin of 39.7%[10] - Net earnings attributable to W.W. Grainger, Inc. for Q1 2025 were $479 million, compared to $478 million in Q1 2024, resulting in a diluted earnings per share of $9.86[10] - Total net sales for the three months ended March 31, 2025, were $4,306 million, an increase of 1.7% compared to $4,235 million in the same period of 2024[63] - Gross profit for the same period was $1,710 million, up $42 million or 3%, with a gross profit margin of 39.7%, an increase of 30 basis points year-over-year[65] - Operating earnings for the three months ended March 31, 2025, were $672 million, a slight increase of $3 million compared to $669 million in 2024[66] - Diluted earnings per share rose to $9.86 for the three months ended March 31, 2025, reflecting a 3% increase from $9.62 in the prior year[67] Cash Flow and Liquidity - Cash and cash equivalents at the end of Q1 2025 were $666 million, a decrease from $1,036 million at the beginning of the year[18] - Net cash provided by operating activities for Q1 2025 was $646 million, slightly down from $661 million in Q1 2024[18] - Total cash provided by operating activities was $646 million for the three months ended March 31, 2025, a decrease from $661 million in 2024, primarily due to unfavorable changes in working capital[84] - Cash and cash equivalents decreased to $666 million as of March 31, 2025, down from $1,036 million as of December 31, 2024, with total available liquidity of approximately $1.9 billion[83] Assets and Liabilities - Total assets decreased to $8,658 million as of March 31, 2025, down from $8,829 million at the end of 2024[16] - Total debt as of March 31, 2025, was $2,281 million, compared to $2,002 million as of December 31, 2024[40] - The Company issued $2.8 billion in unsecured debt (Senior Notes) between 2015 and 2024 to support working capital needs and share repurchases[41] - Total debt as a percent of total capitalization improved to 37.2% as of March 31, 2025, down from 42.9% as of December 31, 2024[88] Segment Performance - Total net sales for the three months ended March 31, 2025, were 100% comprised of High-Touch Solutions N.A. (79%) and Endless Assortment (19%)[33] - The High-Touch Solutions N.A. segment accounted for 31% of total revenue for the three months ended March 31, 2025, consistent with the previous year[33] - The Endless Assortment segment contributed 19% to total revenue for the three months ended March 31, 2025, compared to 18% in the same period of 2024[33] - Net sales for High-Touch Solutions N.A. were $3,397 million for the three months ended March 31, 2025, a decrease of 0.2% compared to $3,405 million in 2024, but a 2% increase on a daily, constant currency basis[69] - Net sales for Endless Assortment increased to $828 million, a rise of $77 million or 10.3%, with a 15% increase on a daily, constant currency basis, driven by repeat business and enterprise customer growth[73] Expenses - Selling, general and administrative expenses increased to $1,038 million, up $39 million or 4% compared to the previous year, primarily due to higher marketing expenses[66] - Selling, general and administrative (SG&A) expenses for High-Touch Solutions N.A. rose to $839 million, an increase of $26 million or 3% due to higher payroll and marketing expenses[71] Shareholder Returns - Cash dividends paid in Q1 2025 were $115 million, an increase from $105 million in Q1 2024[18] - The company plans to continue investing in its business and returning excess cash to shareholders through dividends and share repurchases, funded by cash flows from operations[82] - Grainger's share repurchase program authorized the repurchase of up to 5 million shares, with 277,166 shares purchased in Q1 2025 at an average price of $1,095.30 per share[107] - The total number of shares purchased as part of publicly announced plans was 276,803, leaving 4,103,056 shares available for future repurchases[107] Risk Factors - The company is actively monitoring macroeconomic conditions, including inflationary pressures and supply chain challenges, which may impact operations and financial results[59] - Grainger's management continues to monitor and respond to market pressures and regulatory changes affecting operations[97] - The company faces various risks including inflation, higher product costs, and competitive pricing pressures that could impact future results[97] - Grainger's primary market risk exposures include changes in foreign currency exchange and interest rates, with no material changes reported[100] - There were no material changes in Grainger's internal control over financial reporting for the quarter ended March 31, 2025[102] - The company has not experienced any material changes in risk factors as previously disclosed in its 2024 Form 10-K[106] Governance - Grainger's disclosure controls and procedures were evaluated as effective by the CEO and CFO, ensuring timely and accurate reporting[101] - Grainger's board member Susan Slavik Williams holds approximately 5.7% of the company's outstanding shares and has the right to nominate a director nominee annually[109] - There were no shares withheld to satisfy tax withholding obligations during the reporting period[110]