Grainger (NYSE: GWW), Chicago, IL, reported sales for the third quarter of $2.6 billion, a 7 percent increase over the same period a year ago. Profit increased slightly to $1.1 billion.
For the first nine months, sales were $7.5 billion, up 5.6 percent from the same period a year ago. Sales in the 2014 third quarter increased 7 percent, consisting of 2 percentage points from acquisitions, net of dispositions, and a 1 percentage point reduction from unfavorable foreign exchange.
"Strong volume growth and positive operating leverage in the U.S. business were the primary drivers of our results," said President and CEO Jim Ryan. "We were encouraged by better top line growth in Canada this quarter, but margins remain under pressure due to currency and additional investments. Outside of North America, we were disappointed with the performance of several multichannel businesses and are committed to improving or exiting those operations."
Excluding acquisitions and foreign exchange, organic sales in the third quarter increased 6 percent driven by 6 percentage points from volume and 1 percentage point from price, partially offset by a 1 percentage point decline from lower sales of seasonal products.
Sales for the U.S. segment increased 7 percent in the third quarter versus the prior year. Results for the quarter included 2 percentage points from acquisitions, net of dispositions. Excluding acquisitions, organic sales increased 5 percent, driven by 6 percentage points from volume, partially offset by 1 percentage point from lower sales of seasonal products. Sales growth to customers in the heavy and light manufacturing, commercial, retail and natural resources customer end markets contributed to the sales increase.
Canada sales in the third quarter increased 3 percent versus the prior year, 8 percent in local currency. The 8 percent increase in local currency consisted of 5 percentage points from volume, 2 percentage points from acquisitions and 1 percentage point from price. The sales increase for the quarter was led by solid growth to customers in the commercial, transportation, oil and gas, government, and heavy and light manufacturing end markets.
Sales for the other businesses increased 16 percent for the third quarter versus the prior year. This performance consisted of 18 percentage points of growth from volume and price, partially offset by a 2 percentage points decline from unfavorable foreign exchange. The sales increase was primarily driven by the single channel businesses, MonotaRO in Japan and Zoro in the U.S., and from the business in Mexico.
