Grainger(US:GWW)2023-07-27 20:30Financial Performance - Net sales for Q2 2023 reached $4,182 million, a 9% increase from $3,837 million in Q2 2022[11] - Gross profit for the first half of 2023 was $3,278 million, up 16% from $2,824 million in the same period last year[11] - Net earnings attributable to W.W. Grainger, Inc. for Q2 2023 were $470 million, a 27% increase compared to $371 million in Q2 2022[11] - Earnings per share (diluted) for the first half of 2023 were $18.89, up 32% from $14.26 in the same period last year[11] - For the three months ended June 30, 2023, net sales increased to $4,182 million, up from $3,837 million in the same period of 2022, reflecting a growth of about 9%[56] - Gross profit for the same period was $1,644 million, up $203 million or 14%, with a gross profit margin of 39.3%, an increase of 170 basis points year-over-year[72] - Operating earnings for the three months ended June 30, 2023, were $661 million, reflecting a $127 million or 24% increase compared to the prior year[74] - For the six months ended June 30, 2023, net sales reached $8,273 million, an increase of $789 million or 10.6% compared to the same period in 2022[88] - Gross profit for the six months ended June 30, 2023, was $3,278 million, up $454 million or 16%, with a gross profit margin of 39.6%, an increase of 190 basis points year-over-year[89] - Net earnings attributable to W.W. Grainger, Inc. for the six months ended June 30, 2023, were $958 million, an increase of $221 million or 30% compared to the same period in 2022[93] Cash and Assets - Total assets as of June 30, 2023, increased to $8,031 million from $7,588 million at the end of 2022[17] - Cash and cash equivalents at the end of Q2 2023 were $515 million, compared to $325 million at the end of 2022[17] - Net cash provided by operating activities for the first half of 2023 was $904 million, an increase from $593 million in the same period last year[19] - Working capital as of June 30, 2023, was $3,144 million, an increase of $280 million compared to $2,864 million as of December 31, 2022[109] - As of June 30, 2023, property, buildings, and equipment net value was $1,485 million, an increase from $1,461 million as of December 31, 2022[38] - The balance of retained earnings increased to $11,477 million as of June 30, 2023, from $10,700 million at the beginning of the year[24] Segment Performance - The High-Touch Solutions N.A. segment accounted for 80% of total company revenue in the first half of 2023, while the Endless Assortment segment contributed 18%[36] - Net sales for the High-Touch Solutions segment for the six months ended June 30, 2023, were $6,649 million, an increase of $718 million or 12% compared to the same period in 2022[95] - Gross profit for the High-Touch Solutions segment for the six months ended June 30, 2023, was $2,795 million, an increase of $420 million or 18% compared to the same period in 2022[96] - Net sales for the Endless Assortment segment for the six months ended June 30, 2023, were $1,475 million, an increase of $59 million or 4% compared to the same period in 2022[100] Debt and Equity - The carrying value of total debt as of June 30, 2023, was $2,275 million, compared to $2,284 million as of December 31, 2022, indicating a slight decrease of about 0.4%[44] - The Company issued $2.3 billion in unsecured long-term debt (Senior Notes) between 2015 and 2020 to support working capital needs and share repurchases[45] - Total debt as a percent of total capitalization was 46.3% as of June 30, 2023, down from 49.9% as of December 31, 2022[110] - A total of 244,299 shares were repurchased in Q2 2023, with an average price of $671.69 per share[131] - The maximum number of shares that may yet be purchased under the share repurchase program is 2,273,085[131] - The share repurchase program authorized the repurchase of up to 5 million shares with no expiration date[131] Operational Insights - The increase in SG&A expenses for the three months ended June 30, 2023, was primarily due to higher marketing and payroll expenses, totaling $983 million, an increase of 8.4% from the previous year[74] - SG&A expenses for the six months ended June 30, 2023, were $1,937 million, an increase of $181 million or 10% compared to the same period in 2022[91] - The Company has implemented strategies to mitigate the adverse effects of inflation and maintain market price competitiveness[68] - The Company continues to monitor macroeconomic pressures, including inflation and recession fears, which may impact its business operations[68] Compliance and Controls - Grainger's disclosure controls and procedures were evaluated as effective by the CEO and CFO as of the end of the reporting period[125] - There were no changes in Grainger's internal control over financial reporting for the quarter ended June 30, 2023[126]