The 2020 Mid-Year Economic Update_long

Grainger Sales Flat in 2015

Fourth quarter sales down 1 percent year-over-year.

Grainger (NYSE: GWW), Chicago, IL, reported sales for 2015 of $10 billion, flat compared to the prior year. Profit decreased 4 percent to $769 million.

"This was a challenging year for us and for most industrial companies, with an unprecedented combination of declining oil and commodity prices, low inflation and a strong U.S. dollar," said President and CEO Jim Ryan. "We took action in 2015 by restructuring several of our businesses, resulting in a leaner cost structure. As previously communicated, we will continue to execute changes in the United States and Canada in 2016. We also continued to invest for the future by expanding and upgrading our industry-leading supply chain, digital capabilities, sales force productivity tools and KeepStock, which enables us to serve customers the way they want to be served."

Company sales in the fourth quarter decreased 1 percent year-over-year to $2.5 billion. Profit decreased 2.4 percent to $145.2 million.

Sales in the United States segment decreased 3 percent in the fourth quarter compared to the prior year. The decline was driven by a 2 percentage point decline from volume, a 1 percentage point decline from price, a 1 percentage point decline from lower sales of seasonal products and a 1 percentage point decline from sales of Ebola related safety products in 2014 that did not repeat, partially offset by 1 percentage point from higher intercompany sales to Zoro and 1 percentage point from the favorable timing of the Christmas holiday. Retail and government customers had the strongest sales performance in the quarter.

Sales in Canada decreased 27 percent in U.S. dollars and 14 percent in local currency in the fourth quarter. The decrease consisted of a 17 percentage point decrease from volume and a 1 percentage point decrease from lower sales of seasonal products, offset by a 4 percentage point contribution from price. Weakness in the oil and gas industries continued to affect sales to Canada's customers. Sales to all customer end markets except Government and Forestry were down versus the prior year.

Sales for the other businesses increased 41 percent for the 2015 fourth quarter versus the prior year. This performance consisted of 33 percentage points from Cromwell, acquired on September 1, 2015, and 18 percentage points of growth from volume and price, partially offset by a 10 percentage point decline from unfavorable foreign exchange. Organic sales growth in the Other Businesses was primarily driven by MonotaRO in Japan and Zoro in the United States.  

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