Grainger (GWW) Set to Report Q3 Earnings: What's in Store?
W.W. Grainger, Inc. GWW is scheduled to report third-quarter 2023 results on Oct 26, before the opening bell.
Q3 Estimates
The Zacks Consensus Estimate for GWW’s third-quarter revenues is pegged at $4.2 billion, indicating growth of 7.3% from the year-ago quarter’s reported figure. Organic growth for the quarter is expected to be 8.3%. The consensus mark for earnings per share is pegged at $8.85, suggesting an improvement of 7% from the prior-year quarter.
W.W. Grainger, Inc. Price and EPS Surprise
W.W. Grainger, Inc. price-eps-surprise | W.W. Grainger, Inc. Quote
Q2 Results
In the last reported quarter, Grainger’s earnings surpassed the Zacks Consensus Estimate, while revenues missed the same. The top and bottom lines increased year over year. GWW has an impressive earnings surprise history, having surpassed estimates in the trailing four quarters, the average beat being 8.3%.
What the Zacks Model Indicates
Our proven model doesn’t conclusively predict an earnings beat for Grainger this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
Earnings ESP: Grainger has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Factors to Note
Grainger has been witnessing strong growth in core and non-pandemic product sales for the past few quarters. The company’s product mix has been stabilizing, as customers have been returning to normal operations post-pandemic.
Also, GWW has been focusing on improving the end-to-end customer experience by making investments in its e-commerce and digital capabilities, and executing improvement initiatives within its supply chain. These factors are likely to have contributed to the company’s third-quarter performance. We expect an organic daily sales growth of 8.1% in the quarter.
Grainger’s High-Touch Solutions North America segment is expected to have benefited from strength in commercial, transportation and heavy manufacturing, strong revenue growth across the company’s North American regions, and an expansion in large and midsize customers. Our model predicts year-over-year organic daily sales growth of 6.4% in the quarter.
Notably, Grainger has been witnessing market-beating growth in the High-Touch Solutions market compared with the U.S. MRO (maintenance, repair and operating) market. This outperformance can be attributed to strategic activities, such as building advantaged MRO solutions, delivering unparalleled customer services, and offering differentiated sales and services.
We expect the segment’s revenues to be $3,383 million, up 6.4% from the third-quarter 2022 reported level.
GWW’s Endless Assortment segment is likely to have benefited from strong customer acquisition and repeat business in the quarter to be reported. Our model predicts year-over-year organic daily sales growth of 6.9% for the quarter.
Customer growth at MonotaRO is expected to have positively impacted the segment’s revenues. Our model predicts the segment’s revenues to be $749 million, up 6.9% from the prior-year quarter’s reported figure.
However, the company has been witnessing elevated material and freight costs for some time. This, coupled with higher operating costs and incremental SG&A expenses due to higher technology investments, is likely to have impacted its margins in the quarter under review.
Price Performance
Grainger shares have improved 38.1% in a year compared with the industry’s growth of 20.1%.
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Stocks to Consider
Here are some stocks with the right combination of elements to post an earnings beat in their upcoming releases.
ESAB Corporation ESAB, scheduled to release earnings on Nov 1, has an Earnings ESP of +0.81% and sports a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ESAB’s third-quarter earnings is pegged at 92 cents per share. Earnings estimates have been unchanged in the past 60 days. It has an average trailing four-quarter earnings surprise of 13.6%.
H&E Equipment Services, Inc. HEES, expected to release earnings on Oct 26, has an Earnings ESP of +14.79% and a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for HEES’ earnings for the third quarter is pegged at $1.31 per share. The consensus estimate for 2023 earnings has moved 8% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 24.1%.
Ingersoll Rand Inc. IR, expected to release earnings on Nov 1, has an Earnings ESP of +1.00%. IR currently carries a Zacks Rank of 3.
The consensus estimate for Ingersoll Rand’s earnings for the third quarter is pegged at 70 cents per share. Earnings estimates have been unchanged in the past 60 days. It has an average trailing four-quarter earnings surprise of 14.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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W.W. Grainger, Inc. (GWW) : Free Stock Analysis Report
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