Grainger reported results for the 2015 third quarter ended September 30, 2015. Sales of $2.5 billion declined 1 percent versus $2.6 billion in the 2014 third quarter.
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There were 64 selling days in the quarter, the same as in 2014. Net earnings for the third quarter were down 17 percent to $192 million versus $230 million in 2014. Earnings per share of $2.92 declined 12 percent versus $3.30 in 2014.
The 2015 third quarter included charges of $11 million, or $0.11 per share. These charges reflect cost actions begun in the third quarter related to the announcement of 26 branch closures in the United States and company restructuring, primarily related to payroll.
Sales in the 2015 third quarter declined 1 percent driven by a 3 percentage point reduction from foreign exchange and a 2 percentage point benefit from acquisitions.
Excluding foreign exchange and acquisitions, organic sales were flat and consisted of 1 percentage point from volume and a 1 percentage point decline in price.
The company's gross profit margin declined 1.1 percentage point to 41.9 percent versus 43.0 percent in the 2014 third quarter, due primarily to faster growth with lower gross margin customers, lower supplier rebates tied to lower-than-expected volume and price deflation versus slight cost inflation. Excluding the business in Canada, the company experienced slight product cost deflation versus the 2014 third quarter.
Operating expenses for the company increased 1 percent and included approximately $43 million in incremental growth and infrastructure spending versus the 2014 quarter.
Company operating earnings declined 12 percent to $341 million for the 2015 third quarter versus $386 million in the prior year.
The 12 percent decline was driven by the sales decline, lower gross profit margins and a 1 percent increase in operating expenses. Excluding the charges in the 2015 third quarter, operating expenses were down 1 percent and operating earnings declined 9 percent. ■