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W W Grainger Inc (NYSE: GWW) reported second-quarter FY22 sales grew 19.6% year-over-year to $3.84 billion, +22% on a daily, constant currency basis, beating the consensus of $3.70 billion.
EPS improved to $7.19 (+68.4% Y/Y), beating the consensus of $6.65.
High-Touch Solutions N.A. segment, daily sales were up 22.2% Y/Y, and Endless Assortment segment, daily sales were up 11.4% Y/Y or up 21.1% on a daily, constant currency basis, reflecting the significant impact of the depreciating Japanese yen.
The gross margin expanded by 255 bps to 37.6%. The operating income increased by 60% Y/Y to $534 million, and the margin expanded by 350 bps to 13.9%.
Grainger generated cash from operating activities year-to-date of $593 million, compared to $563 million a year ago. Cash and equivalents stood at $262 million at the end of the quarter.
During the quarter GWW returned $219 million to shareholders through dividends and share repurchases.
"Our execution on our strategic initiatives is driving sustained growth and share gain across the business. After another quarter that exceeded expectations, we are increasing our 2022 outlook and remain well-positioned to deliver an exceptionally strong year," commented DG Macpherson, Chairman, and CEO.
FY22 Outlook: Grainger expects net sales of $15 billion-15.2 billion (prior guidance $14.5 billion - $14.9 billion) against the consensus of $14.74 billion.
It expects gross profit margin of 37.2% - 37.5% (prior 36.8%-37.3%), operating margin of 13.6%-14% (prior 13% - 13.6%).
It expects EPS of $27.25 - $28.75 (prior $25.00 - $27.00), versus the consensus of $26.56.
The company forecasts an operating cash flow of $1.25 billion-$1.35 billion (prior $1.15 billion-$1.35 billion) and a share buyback of $600 million-$700 million.
Price Action: GWW shares are trading higher by 6.72% at $535.59 on the last check Friday.
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