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Grainger (NYSE: GWW), Chicago, IL, reported sales for the first quarter of $2.4 billion, an increase of 5 percent compared to the first quarter of 2013. Net earnings for the quarter increased 2 percent to $217 million.
"We are encouraged by the strong finish in March and our solid operating performance in a quarter that was marked by several disruptions from severe winter weather in January and February," said Jim Ryan, president and CEO of Grainger. "We are particularly encouraged by the performance of our U.S. business, which was driven by continued market share gains with large customers. The performance of our online businesses in Japan and the United States also continues to be strong. We are facing near-term economic and foreign exchange headwinds in Canada and are unhappy with the current performance. However, we will continue to invest in the Canadian infrastructure as we are very optimistic about the business over the long term."
Excluding acquisitions and foreign exchange, organic sales increased 5 percent, driven by 4 percentage points from volume, 1 percentage point from price and 1 percentage point from higher sales of seasonal products, partially offset by a 1 percentage point decline from business disruptions due to the extreme weather that closed some customer and Grainger facilities across parts of North America during the months of January and February.
Sales for the U.S. segment increased 7 percent in the first quarter year-over-year. Excluding acquisitions, organic sales increased 5 percent, driven by 4 percentage points from volume, 1 percentage point from price and 1 percentage point from higher sales of seasonal products, partially offset by a 1 percentage point decline due to the extreme weather in January and February. Strong sales growth to customers in the heavy and light manufacturing, natural resources, retail and commercial customer end markets contributed to the sales increase in the quarter.
First quarter sales for Acklands-Grainger, the Canadian business segment, decreased 10 percent in U.S. dollars and were down 2 percent in local currency. The 2 percent sales decline consisted of a 4 percentage points decline from volume partially offset by a 2 percentage points benefit from the timing of Good Friday, which will fall in April this year. The business in Canada continues to be negatively affected by a weak macroeconomic environment, unfavorable currency exchange, lower commodity prices and a reduction of Canadian exports.
Sales for the Other Businesses, which includes operations primarily in Asia, Europe and Latin America, increased 11 percent for the first quarter compared to the prior year. This performance consisted of 18 percentage points of growth from volume and price, partially offset by a 7 percentage points decline from unfavorable foreign exchange. Sales growth in the Other Businesses was driven by Zoro Tools and the businesses in Mexico and Japan. Strong sales growth in Japan was partially offset by the weakness in the Japanese yen versus the U.S. dollar.