W W Grainger (GWW) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales reached $4.31B, up 3.1% year-over-year, with both High-Touch Solutions and Endless Assortment segments contributing to growth.

• Adjusted diluted EPS was $9.76, up 5.2% year-over-year; reported diluted EPS was $9.51, up 2.5%.

• Operating margin was 15.1% reported (down 70 bps), or 15.4% adjusted (down 40 bps) year-over-year; gross margin held steady at 39.3%.

• $345 million returned to shareholders via dividends and share repurchases in Q2 2024.

• 2024 earnings outlook narrowed, with updated guidance for sales and EPS.

Financial highlights

• Q2 2024 sales were $4.31B, up 3.1% year-over-year (5.1% daily, organic constant currency).

• Gross profit margin held steady at 39.3% year-over-year.

• Adjusted operating earnings were $665M, up 0.6%; reported operating earnings were $649M, down 1.8%.

• Free cash flow for Q2 2024 was $335M; operating cash flow was $411M.

• ROIC was 42.6%; net leverage ratio at 0.55x as of June 30, 2024.

Outlook and guidance

• 2024 net sales guidance narrowed to $17.0–$17.3B, with daily, organic constant currency sales growth of 4.0%–6.0%.

• Adjusted diluted EPS guidance narrowed to $38.00–$39.50 for 2024.

• Gross profit margin expected between 39.2%–39.4%; operating margin 15.3%–15.7%.

• Operating cash flow forecasted at $1.95–$2.15B; capex $400–$475M.

• Guidance trimmed at the top end due to macro softness and JPY devaluation.