Grainger beats by $0.75, beats on revs; raises FY18 EPS above consensus, reaffirms FY18 revs guidance
- Reports Q4 (Dec) earnings of $2.94 per share, excluding non-recurring items, $0.75 better than the Capital IQ Consensus of $2.19; revenues rose 6.5% year/year to $2.63 bln vs the $2.57 bln Capital IQ Consensus. The sales increase consisted of an 11 percentage point increase from volume, partially offset by a 3 percentage point decline from price and a 1 percentage point decline from the divestiture of a specialty business. The company's gross profit margin for the quarter decreased 1.3 percentage points, primarily driven by price deflation in the United States, partially offset by higher gross profit margin in Canada.
- Co issues guidance for FY18, sees EPS of $12.95-14.15, excluding non-recurring items, vs. $11.41 Capital IQ Consensus; reaffirms revs +3-7% to ~$10.74-11.15 bln vs. $10.88 bln Capital IQ Consensus. The prior earnings per share guidance for 2018 was $10.60 to $11.80. The increase in the midpoint of the earnings per share guidance is composed of $0.50 from better than expected 2017 operating performance, $2.15 from a lower corporate tax rate under U.S. tax legislation and $0.06 from incremental share buybacks funded by the benefits of the tax legislation, partially offset by $0.10 of lower benefits from clean energy investments and $0.26 in increased investment in the business funded by the benefits of the tax legislation.
- "Overall we were pleased with the year. We made progress by removing the pricing barrier and improving service for customers while improving our cost structure. This continued in the fourth quarter with strong performance, as customers responded positively to our actions. We're encouraged that we remain on track with our volume growth and expense management goals in an improving demand environment," said DG Macpherson, Chairman and Chief Executive Officer. "In Canada, we are in the early stages of a business model reset and like the progress we are seeing."