MRO products distribution giant Grainger — No. 1 on MDM’s 2022 Top Industrial Distributors list — held its annual Investor Day on Sept. 21 at the company’s Northeast Distribution Center in Bordentown, New Jersey, where executives presented an update on the company’s strategy that included new three-year financial targets through 2025.

Those targets were led by the company forecasting continued strong sales growth over the next three years, approximating full-year sales of $19 billion to $20 billion by 2025, assuming normal economic growth. That would equate to 8% to 10% compound annual growth compared to Grainger’s mid-point of 2022 guidance of $15.1 billion. Grainger had 2021 total sales of $13.0 billion.

The company’s 2025 full-year performance targets also include adjusted operating margin of approximately 14.5%, representing 70 basis points of improvement compared to 2022 mid-point guidance of 13.8%; operating cash flow of approximately $2 billion — a 54% increase from 2022’s mid-point guidance of $1.3 billion; expected annual capital expenditures between $500 million to $600 million per year for 2023 through 2025; and adjusted earnings per share of approximately $40 — a 43% increase compared to 2022’s mid-point guidance of $28.

“We have made significant progress over the last several years by starting with the customer and focusing on what matters to drive strong results,” Grainger chairman and CEO D.G. Macpherson said in a news release ahead of the Investor Day event. “With a commitment to provide a flawless experience and tangible value for our customers, we are gaining momentum and remain well-positioned to create significant shareholder value by delivering on our financial targets over the next three years.”

The release noted that executive presenters would highlight the following expectations during the event:

• In Grainger’s High-Touch Solutions N.A. segment, due to strong execution on its strategic growth engines, the company increases its U.S. market outgrowth target to 400 to 500 basis points per year 
• In Grainger’s Endless Assortment segment, the company outlines key tenets of its flywheel and expectations for annual high-teens sales growth in local currency for both Zoro and MonotaRO through 2025
• Grainger provides insights into its supply chain advantage and outlines plans to invest in Distribution Center capacity, automation, and environmental, social and governance (ESG) initiatives to support future growth expectation.

Grainger also reaffirmed the full-year 2022 guidance issued in its 2022 2Q earnings report that included daily sales growth of 14.5% to 16.5%.