Grainger (NYSE: GWW), Chicago, IL, reported sales for the third quarter of $2.6 billion, a 1.5 percent increase over the same period a year ago. Profit decreased 12.8 percent to $162 million.
Sales for the U.S. segment declined 0.6 percent versus the 2016 third quarter and were up 1 percent on a daily basis. The increase was driven by a 7 percentage point increase in volume partially offset by declines of 5 percent from price and 1 percent from the divestiture of a specialty business. Other items that affected sales in the quarter included a 1 percent benefit from intercompany sales and a 1 percent increase from hurricane-related sales, offset by declines of 1 percent from the July 4 holiday timing and 1 percent from seasonal sales. Natural resources and reseller customers posted the strongest sales growth in the quarter for the segment.
Canada sales in the third quarter increased 5 percent in U.S. dollars and local currency and were up 7 percent on a daily basis versus the 2016 third quarter. Daily sales for the Canada segment increased 2 percent in local currency, consisting of volume. The business in Canada posted a $15 million operating loss in the 2017 third quarter, up 1 percent versus the prior year. The gross profit margin in Canada improved by 0.8 percent versus the prior year, primarily due to lower inventory reserve requirements. Operating expenses increased 6 percent in the quarter and included $5 million of restructuring charges related to facility and headcount reductions
Sales for other businesses increased 11.4 percent for the 2016 third quarter versus the prior year and were up 13 percent on a daily basis. The increase was driven by a 15 percent growth from volume and price, partially offset by a 2 percent decline from foreign exchange. Performance for the other businesses was driven by a 17 percent sales growth for the single channel online businesses and strong sales growth for the business in Mexico.
For the first nine months, sales were $7.8 billion, up 1.6 percent from the same period a year ago. Profit decreased 20.3 percent to $434.7 million.
"Our U.S. business had strong volume in the quarter driven by our strategic pricing initiatives and an improving demand environment. We saw a solid response from digital marketing activities that began in mid-August, particularly from our mid-sized customers. We continued to streamline our portfolio with the divestiture of a noncore U.S. specialty business, which affected sales in the quarter," said chairman and CEO DG Macpherson. "Our single channel online businesses continued their strong sales growth and improved profitability. Our Canadian business continues to be challenged as we execute our turnaround strategy."
