Bill Chapman, Director, Investor Relations
W.W. Grainger (GWW) July 2011 Sales Call August 10, 2011 8:00 AM ET
Hi, this is Bill Chapman, director of investor relations for Grainger. Thank you for accessing this recorded message with information regarding Grainger's July 2011 sales results. I'll begin by reminding you that certain statements and projections of future results made in this webcast constitute forward-looking information.
This information is based on current expectations of market conditions and competitive and regulatory environments and involves risks and uncertainty. Please see our Form 10-K for a discussion of factors as they relate to forward looking statements.
Let's now take a look at our sales results for July 2011, which had 20 selling days, one less than July 2010. Total company sales increased 10% on a daily basis versus July 2010. Included in these results were a 1% contribution from acquisitions and a 2% from foreign exchange.
Excluding these items, organization daily sales increased 7% on 8% volume growth and 2% from price, partially offset by a 3% headwind from the oil spill related sales in 2010. Please see the exhibit at end of this podcast script for a summary of the contribution from oil spill related sales in 2010.
Now let's turn our attention to sales results by segment. As a reminder, monthly sales history by segment for the prior two years is available on the Investor Relations website along with a summary of selling days by month and by business. Please note that although some of our businesses have a different number of selling days, due to local holidays we use the number of selling days in the United States as the basis for our calculation of daily sales.
I'll begin with our largest segment, the United States. Daily sales for the U.S. were up 5%, consisting of 6% volume growth and 3% from price. Oil spill related sales from 2010 resulted in a negative 4% effect for the month.
Daily sales to customer end markets were as follows. Heavy manufacturing was up in the mid-teens. Commercial, retail, and light manufacturing were up in the high single-digits. Contractor and government were up in the mid-single digits, and reseller was down in the mid-20s. 2010 sales related to the oil spill are included in the reseller category, a group made up of reseller and ag and mining customers, which includes Grainger's oil and gas customers.
In Canada, daily sales increased 18% in local currency, including a 3% contribution from acquisitions offset by a 1% drag from price. The price decline was largely driven by the strengthening Canadian dollar versus the U.S. dollar and its effect on cost plus contracts with customers.
Strong growth to customers in the heavy manufacturing, oil and gas, and retail wholesale end markets contributed to the strong sales performance. In U.S. dollars, daily sales for our business in Canada increased 30%.
Daily sales for our other businesses increased 59%, primarily driven by strong sales growth in Japan, Mexico, India, and China, as well as sales from our business in Colombia. As a reminder, starting in August, we passed the anniversary of the Colombian acquisition.
Looking forward, August will have 23 selling days, one more than August of last year. Daily sales growth in August is currently trending in line with our annual sales guidance range of 9-10%, adjusted for the 3% contribution from the oil spill in August of last year.
Please mark your calendar for Monday, September 12, when we'll report August sales. If you have any questions, please contact me at 847-535-0881. Thank you.
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