The distributor of business and industrial supplies pointed to strong growth at Zoro.com and in sales to large and mid-size U.S. companies.

W.W. Grainger Inc. today reported a stronger than expected second quarter, with robust growth online and in sales to both large and mid-sized U.S. customers in the United States.

“The second quarter exceeded our expectations, with strong growth from U.S. large and medium customers,” CEO D.G. Macpherson said in the company’s earnings statement released today.

We continue to gain share across both large and medium customers.
D.G. Macpherson, CEO
W.W. Grainger Inc.

D.G. Macpherson, CEO, W.W. Grainger

Grainger’s Q2 financial report didn’t break out figures on e-commerce sales, but Macpherson noted that the company’s “single channel” e-commerce and international businesses “improved operating performance.” Grainger’s single-channel e-commerce business, which grew 25% year over year in the quarter, include Zoro.com and Japan-based MonotaRO.com.

Grainger’s other e-commerce portals include its flagship Grainger.com and Canada-based Acklands Grainger and a Zoro section on eBay Canada.

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Grainger—a distributor of maintenance, repair and operations (MRO) equipment and supplies that companies, government agencies and institutions use to operate their facilities—didn’t immediately respond to a request for information on its overall e-commerce sales. But it has said that 56% of its 2017 total revenue came in through its e-commerce channels, including websites, its KeepStock vending inventory service and e-procurement systems. At that rate, its Q2 e-commerce sales would come in at about $1.60 billion.

The company said it increased sales in Q2 to large and mid-sized companies. “We continue to gain share across both large and medium customers, and acquire medium customers amid a strong economy,” Macpherson said.

Grainger’s growth in recent quarters has followed the lower prices it set last year.

Regarding the trade war between the United States and China, Macpherson said on a conference call with stock analysts today that Grainger sources from China a large percentage of its products, both branded and its own private labels, but that it can shift to alternate sources for every product if necessary. But Grainger hasn’t yet had to shift to those alternate sources, he added.

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For the second quarter ended June 30, Grainger reported:

  • Total net sales of $2.860 billion, up 9.4% from $2.615 billion in the year-earlier period;
  • Gross profit of $1.111 billion, up 6.8% from $1.040 billion, resulting in a gross profit margin of 38.8%, down from 39.8%;
  • Net earnings of $236.98 million, up 142% from $97.92 million; it attributed much of the hike in earnings to lower cost of goods sold and lower taxes in Q2.

For the six months ended June 30, Grainger reported:

  • Net sales of $5.627 billion, up from 9.1% from $5.156 billion in the year-earlier period;
  • Gross profit of $2.203 billion, up 7.0% from $2.059 billion, resulting in a gross profit margin of 39.2%, down slightly from 39.9%;
  • Net earnings of $468.52 million, up 71.8% from $272.67 million.

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