NYSE$GWW

WW Grainger Inc · Q2 2021 earnings

Q2 2021 earnings · · Investor relations

Briefing

Reported strong revenue growth, performance aligned with expectations, gross profit affected by inventory adjustments due to easing mask mandates.

Grainger reported a strong second quarter with sales of $3.2 billion, up 13.1% compared to the second quarter of 2020. Both High-Touch Solutions N.A. and Endless Assortment segments showed robust top-line growth. However, gross profit was impacted by inventory adjustments related to pandemic products.

  • Sales reached $3.2 billion, a 13.1% increase compared to Q2 2020, and a 15.0% increase on an organic, daily, constant currency basis.
  • Generated $269 million in operating cash flow and returned $203 million to shareholders through dividends and share repurchases.
  • Experienced a 75 basis point decline in gross margin due to pandemic-related inventory adjustments.
  • Reported earnings per share increased 103% versus the second quarter of 2020.

Headline financials

Total Revenue

$3.21B

Previous: $2.84B+13.0%
EPS (adj)

$4.27

Previous: $3.75+13.9%
Operating margin

10.4%

No prior period
Effective tax rate

23.6%

No prior period
Capital Expenditures

-$147M

Previous: -$93M-58.1%
Free Cash Flow

$78M

Previous: $21M+271.4%
Net Income

$225M

Previous: $114M+97.4%
Operating Income

$334M

Previous: $205M+62.9%
Gross Profit

$1.12B

Previous: $1.02B+10.6%
Cash & Equivalents

$547M

Previous: $1.6B-65.9%
Total Assets

$6.46B

Previous: $7.19B-10.2%
Stock-Based Comp

$17M

Previous: $17M+0.0%

Revenue & EPS history

Grainger · Revenue · Quarterly

$3.21B

Q2 2021+13%vs Q2 2020
Beat estimate in 12 of 16 quarters(75%)
ActualEstimate

Forward guidance

The Company is maintaining guidance ranges provided in the previous quarter. Strong sales are expected to continue while gross profit margin, operating margin and EPS will likely face pressure from the incremental inventory adjustments and macroeconomic factors. Outside of revenue, Company results are expected to trend towards the low end of the guided ranges.

Tailwinds

  • Net Sales $12.7 - 13.0 billion
  • Daily growth 8.5 - 11.0%
  • Organic, daily growth 10.0 - 12.5%
  • Gross Profit Margin 36.1 - 36.6%
  • Operating Margin 11.8 - 12.4%

Headwinds

  • Earnings per Share (EPS) $19.00 - 20.50
  • Tax Rate 25.0 - 26.0%
  • gross profit margin will likely face pressure from the incremental inventory adjustments
  • operating margin will likely face pressure from the incremental inventory adjustments
  • EPS will likely face pressure from the incremental inventory adjustments

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2021

Historical avgQ2 2021

+0.5%

Avg return

Earnings day

+1.1%

Avg return

5 days after

+2.8%

Avg return

30 days after

55%

40 / 73 earnings

Positive

+24.8%

Q4 2017

Best reaction

-12.4%

Q1 2017

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+0.0%+6.9%+11.2%
Q4 2025+5.1%+9.3%+4.5%
Q3 2025+1.0%+0.6%-0.8%
Q2 2025-10.3%-7.6%-2.5%
Q1 2025+2.8%+1.7%+6.2%
Q4 2024-5.6%-7.4%-9.3%
Q3 2024+0.5%+2.1%+9.6%
Q2 2024-2.5%-2.5%+0.8%
Q1 2024-3.0%-3.9%+0.8%
Q4 2023+2.5%+2.4%+6.3%
Q3 2023+4.3%+7.7%+19.9%
Q2 2023-4.0%-4.8%-6.2%
Q1 2023+5.4%+4.4%+0.7%
Q4 2022+13.0%+13.4%+16.6%
Q3 2022+8.7%+8.6%+12.4%
Q2 2022+9.5%+8.2%+12.8%
Q1 2022+0.9%-2.4%-1.1%
Q4 2021-2.7%-3.8%-2.6%
Q3 2021+8.6%+10.1%+13.6%
Q2 2021-4.6%-4.7%-6.3%
Q1 2021+3.3%+7.1%+7.5%
Q4 2020-0.3%+1.5%+7.0%
Q3 2020-3.3%-4.2%+9.6%
Q2 2020+0.7%-1.6%+4.0%
Q1 2020-2.4%+3.6%+6.1%
Q4 2019-7.6%-5.9%-15.3%
Q3 2019-1.2%-0.9%-0.1%
Q2 2019+7.7%+4.6%-4.6%
Q1 2019-4.9%-5.3%-15.9%
Q4 2018-1.8%-0.3%+5.1%
Q3 2018-12.2%-13.1%-3.7%
Q2 2018+12.0%+12.4%+17.3%
Q1 2018+1.3%-1.8%+8.1%
Q4 2017+24.8%+19.6%+16.0%
Q3 2017+14.5%+14.0%+8.9%
Q2 2017-4.9%-4.4%-7.5%
Q1 2017-12.4%-12.5%-22.3%
Q4 2016+2.9%+2.2%+0.5%
Q3 2016-4.5%-5.0%+2.6%
Q2 2016-5.2%-4.8%+1.1%
Q1 2016-2.0%
Q4 2015-0.2%
Q3 2015-8.9%
Q2 2015+1.2%
Q1 2015-1.0%
Q4 2014-5.8%
Q3 2014-3.0%
Q2 2014-0.8%
Q1 2014+0.6%
Q4 2013-6.9%
Q3 2013+2.5%
Q2 2013+0.2%
Q1 2013+5.5%
Q4 2012+3.5%
Q3 2012-3.1%
Q2 2012+8.9%
Q1 2012+0.5%
Q4 2011-1.2%
Q3 2011+2.5%
Q2 2011-0.3%
Q1 2011+0.9%
Q4 2010+0.2%
Q3 2010+2.1%
Q2 2010+1.1%
Q1 2009+1.9%
Q1 2010+0.2%
Q4 2007-1.8%
Q4 2009-1.8%
Q3 2008+0.6%
Q3 2009+0.6%
Q4 2008+1.1%
Q2 2008+1.1%
Q2 2009+1.1%

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