Grainger(US:GWW)2023-10-26 20:06Financial Performance - Net sales for Q3 2023 reached $4,208 million, a 6.7% increase from $3,942 million in Q3 2022[11] - Gross profit for the nine months ended September 30, 2023, was $4,933 million, up 13.6% from $4,343 million in the same period of 2022[11] - Operating earnings for Q3 2023 were $667 million, representing a 10.6% increase compared to $603 million in Q3 2022[11] - Net earnings attributable to W.W. Grainger, Inc. for the nine months ended September 30, 2023, were $1,434 million, a 23.3% increase from $1,163 million in the same period of 2022[11] - Earnings per share (diluted) for Q3 2023 was $9.43, compared to $8.27 in Q3 2022, reflecting a 14.0% increase[11] - Comprehensive earnings attributable to W.W. Grainger, Inc. for the nine months ended September 30, 2023, were $1,395 million, compared to $1,034 million in the same period of 2022, reflecting a 35.0% increase[14] - Net earnings for the three months ended June 30, 2023, were $493 million, compared to $508 million for the same period in 2022[24] - Net earnings attributable to W.W. Grainger, Inc. for the three months ended September 30, 2023, were $476 million, an increase of $50 million or 12% from the previous year[76] Assets and Equity - Total assets as of September 30, 2023, increased to $8,140 million from $7,588 million at the end of 2022, marking a 7.3% growth[16] - As of September 30, 2023, the total shareholders' equity was $3,382 million, an increase from $2,735 million at the beginning of 2023[24] - The company reported a total of $11,859 million in retained earnings as of September 30, 2023, up from $10,700 million at the beginning of 2023[24] - Cash and cash equivalents at the end of Q3 2023 were $601 million, up from $325 million at the end of 2022[16] Cash Flow and Expenditures - Net cash provided by operating activities for the nine months ended September 30, 2023, was $1,427 million, compared to $973 million in the same period of 2022[19] - Capital expenditures for the nine months ended September 30, 2023, totaled $318 million, an increase from $208 million in the same period of 2022[19] - Cash dividends paid in the third quarter of 2023 were $106 million, with a dividend of $1.86 per share[24] Segment Performance - The High-Touch Solutions N.A. segment accounted for 81% of total company revenue for the three months ended September 30, 2023[33] - The Endless Assortment segment contributed 17% to total company revenue for the three months ended September 30, 2023[33] - Total net sales for the nine months ended September 30, 2023, accounted for 81% from High-Touch Solutions N.A. and 18% from Endless Assortment, compared to 80% and 18% respectively in 2022[35] - High-Touch Solutions N.A. segment net sales were $3,403 million, a 7% increase from $3,180 million in 2022, driven by a 3% price increase and a 6% volume increase[78] - Gross profit for the High-Touch Solutions N.A. segment was $1,418 million, up $127 million or 10%, with a gross profit margin of 41.7%[79] Expenses - Selling, general and administrative expenses for the three months ended September 30, 2023, were $988 million, an increase of $72 million or 8% compared to the same period in 2022[74] - SG&A expenses for the nine months increased to $2,925 million, up $253 million, or 9%, driven by higher marketing and payroll expenses[92] Debt and Financial Obligations - The Company’s total debt as of September 30, 2023, was $2,313 million, up from $1,972 million as of December 31, 2022[43] - The carrying amount of the MonotaRO term loan was $34 million as of September 30, 2023, down from $69 million as of December 31, 2022[47] - The estimated fair value of the Company's Senior Notes was based on external pricing data, with a carrying value of $2,260 million as of September 30, 2023[48] Shareholder Actions - The company repurchased a total of 285,565 shares in Q3 2023, with an average price of $732.26 per share in July, $714.07 in August, and $693.55 in September[129] - A quarterly dividend of $1.86 per share was declared on October 25, 2023, payable on December 1, 2023, to shareholders of record on November 13, 2023[61] - The maximum number of shares that may yet be purchased under the repurchase program is 1,987,944[129] Risk and Compliance - The company continues to face market risks related to foreign currency exchange and interest rates, with no material changes reported[123] - The company emphasizes that forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially[120] - The company has not experienced any material changes in its critical accounting estimates from the previous year[116] - There were no changes in the company's internal control over financial reporting that materially affected its reporting[125] Credit Ratings - As of September 30, 2023, the company's credit ratings are A2 from Moody's and A+ from S&P for corporate and senior unsecured ratings[113] Miscellaneous - The company has adopted a written plan for the sale of shares related to an equity award, set to expire on December 31, 2023[130] - There were no material changes to the company's commitments and other contractual obligations from the previous year[114] - The company’s management evaluated the effectiveness of its disclosure controls and procedures, concluding they were effective as of the end of the reporting period[124]