6309 Monarch Park Place, Suite 203
Niwot, CO 80503, USA
Phone (303) 443-5060
Toll free (888) 742-5060
Sales in the Branch-based Distribution Businesses segment were flat versus the prior year third quarter. Sales to government and national account customers grew during the third quarter as the company emphasized its nationwide branch network. The company also continued to enhance its website. Sales processed through grainger.com increased 29% to $110 million from $85 million in the 2001 third quarter; the current run rate is $445 million. Operating earnings for this segment increased 3% led by improvements in the U.S. and Mexico, partially offset by a decline in the operating performance of the Canadian business.
Sales for Lab Safety Supply, the company's direct marketer of safety and industrial products, declined 5% due to ongoing weakness in the industrial sector of the economy. Sales through its website continued to grow, representing 11% of sales for this business. Operating earnings increased 6% versus the 2001 third quarter benefiting from expense control measures and improved gross margins.
Sales for Grainger Integrated Supply increased 14% during the quarter, primarily due to growing relationships with existing customers. Operating earnings for this segment were $1.7 million versus a loss of $0.9 million in the 2001 third quarter. Last year's results were affected by one customer's bankruptcy filing.
'While operating performance of our three business segments improved, sales results for the quarter confirm that we are not yet seeing a recovery in the North American economy,' said Richard L. Keyser, Grainger's chairman and CEO. 'If economic trends continue, we would expect sales for the full year to be down 1% to 2%.
'Grainger's strong financial position enables us to strengthen our market share relative to our competitors,' Keyser added. 'Our additional investment in inventory should allow us to continue to provide superior service when the economy does recover.' The company increased inventory levels at its U.S. branches in the quarter providing customers with faster access to products during a period when many competitors cut back.