Grainger Q4 2019 Earnings Report
Key Takeaways
Grainger reported a 3% increase in sales for Q4 2019, reaching $2.8 billion. However, reported operating earnings decreased by 37% to $181 million, and reported EPS decreased by 49% to $1.88. Adjusted EPS decreased 2% to $3.88.
Sales increased by 3.0 percent to $2.8 billion.
Reported operating earnings decreased by 37 percent to $181 million; adjusted operating earnings decreased by 1 percent to $307 million.
Reported EPS decreased by 49 percent to $1.88; adjusted EPS decreased by 2 percent to $3.88.
The company recorded a $120 million write-down of substantially all of the remaining intangible assets of the Cromwell business, which was the primary driver of the decline in reported operating earnings.
Grainger
Grainger
Forward Guidance
The company provided 2020 guidance, including net sales growth between 3.5% and 6.5% and earnings per share between $17.75 and $19.25.
Positive Outlook
- Net Sales 3.5% to 6.5% growth
- U.S. Sales 1.0% to 4.0% growth
- Gross Profit Margin 37.2% to 37.8%
- Operating Margin 11.7% to 12.5%
- Earnings per Share $17.75 to $19.25
Challenges Ahead
- U.S. Market Growth (nominal) -1.5% to 0.5%
- Canada Segment Operating Margin -2.0% to 2.0%
- CapEx ~$250 million
- Share Buyback $600 to $700 million
- Tax Rate 24.5% to 25.5%