W. W. Grainger, Inc. (NYSE:GWW)
Octobers Sales Call
November 11, 2011 8:00 am ET
Laura D. Brown – Senior Vice President Communications & Investor Relations
Laura D. Brown
This is Laura Brown, Senior Vice President Communications and investor relations for Grainger. Thank you for accessing this recorded message with information regarding Grainger’s October 2011 sales results. I’ll begin by reminding you that 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 risk and uncertainty. Please see our 2010 Form 10K for a discussion of factors as they relate to forward-looking statements.
Let’s now take a look at our sales results for October, 2011 which had 21 selling days, the same as October, 2010. Total company sales increased 16% versus October 2010. Included in these results was a five percentage point contribution from acquisitions, primarily the Fabory business acquired August 31st. Excluding acquisitions, organic sales increased 11% including nine percentage points from volume and three percentage points from price partially offset by a one percentage point decline from 2010 oil spill related sales. The exhibit at the end of this podcast script provides a summary of the contribution from oil spill related sales last year.
Now, let’s turn our attention to sales results by segment. As a reminder, monthly sales history by reporting 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. Sales for the US segment were up 9% consisting of seven percentage points from volume and three percentage points from price, partially offset by a one percentage point decline from oil spill related sales in 2010. Sales were up in all of our customer end markets in the United States as follows: heavy manufacturing was up in the mid teens; commercial was up in the low double digits; light manufacturing and retail was up in the high single digits; contractor was up in the mid single digits; and government and reseller were up in the low single digits.
As a reminder, sales related to the oil spill in 2010 are included in the reseller category, a group made up of reseller and agriculture mining and markets which includes Grainger’s oil and gas customers.
In our Canadian segment sales increased 16% in local currency including a 14 percentage point contribution from volume and a two percentage point contribution from acquisitions. Strong growth to customers in the construction, agriculture and mining, heavy manufacturing and government end markets contributed to this strong sales performance. With no material contribution from foreign exchange in the month, sales for the Canadian segment increased 16% in US dollars.
Sales for our other businesses increased 110% primarily driven by incremental sales from Fabory. In addition, strong sales growth in Japan and Columbia contributed to the sales growth for the month. Looking forward, November will have 21 selling days, the same as November last year. Trends to date in November are running slightly below October results. We are seeing continued strength in North America, Latin America and Asia but that is partially offset by some recent economic weakening in Europe as well as the two percentage point headwind from oil spill related sales in November of last year.
Finally, please mark your calendar for the following upcoming events. Grainger’s annual analyst day which will be held at our Lake Forest headquarters on Wednesday November 16th from 11 am to 4 pm. Registration closes today, Friday, November 11th at Noon Central Standard Time. November 2011 sales results are scheduled to be reported on Monday, December 12th.
If you have any questions, please contact Bill Chapman, Director Investor Relations at 847-535-0881 or me at 847-535-0409. Thank you.
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