Grainger reported results for the year ended December 31, 2014. Sales of $10 billion increased 6 percent versus $9.4 billion in 2013. Reported net earnings of $802 million increased 1 percent versus $797 million in 2013.
Article continues below
Reported earnings per share of $11.45 increased 3 percent versus $11.13 in 2013. Unfavorable foreign exchange represented a $0.07 reduction to earnings per share.
Sales for the 2014 fourth quarter of $2.5 billion increased 6 percent versus $2.4 billion in the 2013 fourth quarter. Reported net earnings of $149 million declined 5 percent versus $157 million in 2013. Reported fourth quarter earnings per share of $2.14 decreased 3 percent versus $2.20 in 2013.
During the quarter, the company recorded charges totaling $0.66 per share, including the items noted below, resulting in an adjusted EPS of $2.80.
In the 2013 fourth quarter, the company recorded impairment and restructuring charges totaling $0.39, resulting in adjusted EPS of $2.59. Excluding items noted above from both years, company net earnings for the quarter increased 6 percent and earnings per share increased 8 percent versus the prior year.
Company sales in the 2014 fourth quarter increased 6 percent. There were 64 selling days in both the 2014 and 2013 fourth quarters.
The 6 percent sales growth for the quarter consisted of 7 percentage points from volume, 1 percentage point from price and 1 percentage point from sales of Ebola related safety products, partially offset by a 2 percentage points decline from unfavorable foreign exchange and a 1 percentage point negative variance from lapping an extra month of sales from the E&R Industrial, Inc. acquisition.
E&R Industrial was acquired in the 2013 third quarter; results for four months of operations were first consolidated in the fourth quarter of 2013.
Company operating earnings of $267 million for the 2014 fourth quarter increased 4 percent versus the 2013 quarter. This increase was driven by the 6 percent sales growth and operating expense leverage as expenses, including $10 million in incremental growth-related spending, grew at a slower rate than sales, partially offset by lower gross profit margin.
The company's gross profit margin for the quarter declined 30 basis points, primarily driven by softer margins in Canada and Fabory. Excluding the items noted in the table above from both years, company operating earnings increased 9 percent.
The company has two reportable business segments, the United States and Canada, which represented approximately 88 percent of company sales for the quarter. The remaining operating units located primarily in Asia, Europe and Latin America are included in Other Businesses and are not reportable segments. Results for the company's single channel online model businesses are included in Other Businesses. ■