Sales and Revenue - Grainger generated approximately 82% of its consolidated net sales from U.S. operations in 2023[40]. - The company reported net sales of $16,478 million for the year ended December 31, 2023, an increase of 8.2% compared to the previous year, driven by a 5% volume increase and a 4% price increase[153]. - Daily, organic constant currency net sales for the total company increased by 9.5% in 2023 compared to the previous year[153]. - Net sales for 2023 reached $16,478 million, a 8.2% increase from $15,228 million in 2022[205]. - Approximately 20% of 2023 sales were from private label MRO items bearing Grainger's registered trademarks[37]. Financial Performance - Gross profit for 2023 was $6,496 million, reflecting an 11.1% increase, with a gross profit margin of 39.4%, up 100 basis points from the previous year[145]. - Operating earnings rose to $2,565 million in 2023, a 15.8% increase, while adjusted operating earnings increased by 18% to $2,591 million[147]. - Diluted earnings per share for 2023 were $36.23, representing a 20.5% increase from $30.06 in 2022[148]. - Net earnings attributable to W.W. Grainger, Inc. were $1,829 million in 2023, a 17.9% increase from $1,547 million in 2022[205]. - Total shareholders' equity increased to $3,441 million in 2023, up from $2,735 million in 2022[210]. Operational Metrics - As of December 31, 2023, Grainger employed over 26,000 team members, with approximately 85% located in North America[43]. - The company serves over 4.5 million customers globally, with no single customer accounting for more than 10% of total sales in 2023[27]. - Grainger's High-Touch Solutions N.A. segment primarily serves mid-size and large businesses with complex purchasing needs[28]. - Grainger's Endless Assortment segment includes Zoro, offering over 13 million products, and MonotaRO, providing access to more than 22 million products[32]. Supply Chain and Risk Management - The company has more than 5,000 primary suppliers worldwide, with no single supplier comprising more than 5% of total purchases in 2023[33]. - Disruptions in Grainger's supply chain could adversely affect its ability to meet customer demand, impacting sales and financial performance[59]. - Geopolitical tensions and related international responses could exacerbate inflationary pressures, impacting Grainger's ability to manage costs effectively[60]. - Grainger's exposure to foreign currency fluctuations could impact reported net sales and net earnings, particularly with currencies like the Japanese yen and euro[69]. Investments and Growth Strategy - Grainger is increasing investments in eCommerce platforms, focusing on technology information systems and digital advertising to enhance customer interactions and retention[75]. - The company is investing in artificial intelligence, machine learning, and large language model technologies to improve its eCommerce capabilities[76]. - The company expects to continue investing in supply chain capacity and technology enhancements as part of its growth strategy[178]. Employee and Diversity Initiatives - The company is committed to diversity, with approximately 39% of U.S. team members being women and 37% being racially and ethnically diverse[49]. - Grainger's ability to attract and retain key team members is critical for maintaining competitive advantage, facing challenges from rising wage rates and talent shortages[98]. Regulatory and Compliance Risks - The company is subject to various regulatory risks, including compliance with laws related to data protection and environmental standards, which could increase operational costs[104]. - Grainger's cybersecurity team actively manages risks, but unauthorized access incidents have occurred, which could impact financial condition[119]. Capital Structure and Shareholder Returns - As of December 31, 2023, Grainger's consolidated indebtedness was approximately $2.3 billion[112]. - Share repurchases amounted to $850 million in 2023, an increase from $603 million in 2022, with 2024 repurchases expected to be between $900 million and $1,100 million[179]. - Dividends declared and paid in 2023 totaled $392 million, compared to $370 million in 2022[180]. Economic and Market Conditions - Economic downturns and market uncertainties could negatively impact Grainger's customers, leading to reduced demand for its products and services[61]. - The company faces competition from large manufacturers, wholesale distributors, and online businesses, necessitating a strong response to market pressures[71].

NYSE: GWW Q4 2023 Earnings Call February 2, 2024 © 2024 W.W. Grainger, Inc. 2 Opening Remarks D.G. Macpherson Chairman and CEO © 2024 W.W. Grainger, Inc. 3 © 2024 W.W. Grainger, Inc. 3 Large scale creates significant complexity Safe Harbor Statement and Non-GAAP Financial Measures | --- | --- | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - The company finished the year with over $16.5 billion in sales, up 8.6% on a daily basis, or 9.5% in daily organic constant currency [25] - Adjusted EPS was up over 23% to $36.67 per share, with operating cash flow exceeding $2 billion [27] - Total company gross margin for the fourth quarter was 39.1%, declining by 50 basis points year-over-year, while operating margin increased by 80 basis points to 15.7% [29][30] Business Line Data and Key Metrics Changes - The High-Touch Solutions segment saw sales up 4.7% on both a reported and daily organic constant currency basis, with strong volume growth across all geographies [37] - The Endless Assortment segment's sales increased 6% or 8.2% on a daily constant currency basis, with Zoro U.S. up 2.6% and MonotaRO achieving 9.9% growth in local currency [40] - Operating margins for the Endless Assortment segment expanded by 50 basis points to 7.8% [41] Market Data and Key Metrics Changes - The U.S. MRO market grew between 2.5% and 3% in the quarter, largely driven by price, with industrial production remaining flat year-over-year [31] - B2B customer growth remained steady in the high single digits, while noncore B2C and B2C light customer performance declined over 20% year-over-year [33] Company Strategy and Development Direction - The company is focused on enhancing customer experience through investments in technology, supply chain, and high-touch growth engines [6][8] - Strategic investments are being made in capacity, automation, and sustainability initiatives to strengthen service advantages [19][24] - The company aims to achieve 400 to 500 basis points of U.S. market outgrowth in 2024, with expectations for daily constant currency sales growth between 4% and 7% [34][42] Management's Comments on Operating Environment and Future Outlook - Management expects a more muted market in 2024 but remains confident in the company's ability to deliver strong results [57] - The company anticipates continued improvements in supply chain efficiencies and a return to normal service levels [66] - The outlook for 2024 includes revenue expectations between $17.2 billion and $17.7 billion, with stable gross margins and operating margins remaining healthy [42][44] Other Important Information - The company updated its 2030 sustainability target to reduce absolute Scope 1 and 2 emissions by 50% from a 2018 baseline [23][24] - Grainger ranked third in the American Opportunity Index for commitment to developing internal talent and was named Glassdoor's 2024 Best Places to Work [21][22] Q&A Session Summary Question: What are the drivers of gross margin improvement since 2019? - Management noted improvements in product gross margins, pricing strategy execution, and supply chain efficiencies as key drivers [60] Question: What offsets are expected for the flat gross margin guidance in 2024? - Management indicated that a faster pricing environment and normalization of supply chain disruptions would help offset the expected decline [61] Question: Can you elaborate on the investments being made? - Investments are categorized into demand generation (SG&A) and capacity additions (capital expenditures), with a focus on improving service and cost efficiency [80] Question: What is the expected pace of share buybacks in 2024? - The company plans to maintain a stable pace for share buybacks throughout the year [90] Question: How does the company view opportunistic M&A? - Management emphasized a focus on organic growth but remains open to technology investments that align with strategic goals [78]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______ Commission file number 1-5684 W.W. Grainger, Inc. (Exact name of registrant as specified in its charter) Illinois 36-1150280 (State or o ...

W.W. Grainger, Inc. (NYSE:GWW) Q3 2023 Earnings Conference Call October 26, 2023 11:00 AM ET Company Participants Kyle Bland - Vice President, Investor Relations D.G. Macpherson - Chairman and Chief Executive Officer Dee Merriwether - Senior Vice President and Chief Financial Officer Conference Call Participants Ryan Merkel - William Blair Tommy Moll - Stephens Inc. Jacob Levinson - Melius Research Christopher Glynn - Oppenheimer & Co. David Manthey - Robert W. Baird Nigel Coe - Wolfe Research Stephen Vo ...

(Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______ Commission file number 1-5684 W.W. Grainger, Inc. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Exact name of registrant as specified in its charter) Illinois 36-1150280 (State or other ...

| --- | --- | --- | |-------|---------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------| | | Progressing on our near-term ESG initiatives Customer sustainability solutions | $ 1 B Revenue from Environmentally Preferable Products in HTS – U.S. | | | Supplier diversity | $ 2 B Spent on products from underrepresented business (1) > | | | Energy and emissions | 26 % Reduction in t ...

Financial Data and Key Metrics Changes - The company reported strong daily sales growth of 10.1% on a daily constant currency basis for Q2 2023, although year-over-year growth rates have decelerated compared to Q1 [11][17] - Total company operating margin increased by 190 basis points to 15.8%, driven by improved gross margin performance and strong top-line growth [32][109] - Diluted EPS for the quarter was $9.28, reflecting a 29% increase compared to Q2 2022 [109] Business Line Data and Key Metrics Changes - The High-Touch Solutions segment saw daily sales growth of 9.9%, with revenue growth across all geographies, although year-over-year growth rates slowed [35] - The Endless Assortment segment experienced a sales increase of 4.5%, with Zoro U.S. up 2.8% and MonotaRO achieving 12.6% growth in local currency [38] - The High-Touch North American segment's gross profit margin finished at 41.7%, up 200 basis points year-over-year, while operating margin improved by 230 basis points [36][37] Market Data and Key Metrics Changes - The U.S. MRO market is estimated to have grown between 4.5% and 5%, with the company achieving approximately 525 basis points of outgrowth in the quarter [14] - Positive growth was noted in nearly all customer end segments, with strong performance in government and healthcare, countering softness in manufacturing and commercial services [12] Company Strategy and Development Direction - The company is focused on advancing its proprietary product and customer information management systems to fuel growth and enhance marketing and merchandising efforts [8] - Plans to construct a new 500,000 square foot distribution center in Oregon and three smaller distribution centers in Pennsylvania, Texas, and North Carolina are aimed at meeting strong customer demand and improving service capabilities [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve profitable growth and strong results for shareholders, raising the midpoint of the full-year 2023 outlook [17][19] - The company anticipates a decline in margin rates in Q3 due to the unwinding of a one-time supplier rebate and continued investments in demand generation [42] Other Important Information - The company returned a combined $265 million to shareholders through dividends and share repurchases in the quarter [32] - The company is committed to sustainability, having helped customers avoid approximately 4,000 tons of CO2 emissions through its sustainability services [6] Q&A Session All Questions and Answers Question: Can you provide details on the distribution center in Oregon? - The company plans to break ground in a couple of weeks, with the building expected to be fully operational by 2025. This expansion is necessary due to outgrowing existing facilities and aims to improve service and reduce transportation costs [47] Question: Can you elaborate on the B2B deceleration in Zoro? - The deceleration is attributed to Zoro's focus on smaller businesses, which are experiencing more softness compared to larger customers served by the High-Touch model. The company is working to increase repeat purchase rates among core B2B customers [70] Question: How should we think about price/cost dynamics moving forward? - Price/cost was slightly negative in the quarter, and the company expects this trend to continue into the second half of the year as favorable pricing from the previous year unwinds [56][78] Question: What is the outlook for gross margins in the second half? - The company expects gross margins to decline slightly due to the unwinding of price/cost dynamics, but remains confident in achieving long-term targets [72][76] Question: How are inventory levels being managed post-pandemic? - The company aims to maintain service levels while managing wasteful inventory, with expectations to return to historical inventory-to-revenue ratios as supply chain disruptions stabilize [87]

Safe Harbor Statement and Non-GAAP Financial Measures Additional information relating to certain non-GAAP financial measures referred to in this presentation including: daily sales; daily sales in constant currency; daily sales in constant currency and local days; free cash flow; adjusted return on invested capital; adjusted EBITDA; and net leverage ratio, is available in the appendix to this presentation. This communication also includes certain non-GAAP forward-looking information (including, but not limi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______ Commission file number 1-5684 W.W. Grainger, Inc. (Exact name of registrant as specified in its charter) Illinois 36-1150280 (State or other ...