W.W. Grainger Cuts 2017 Outlook

(RTTNews) - W.W. Grainger Inc. (GWW) said that it lowered its 2017 sales and earnings per share guidance for the year and now expects sales growth of 1 to 4 percent and earnings per share of $10.00 to $11.30, which incorporates the effect of the pricing acceleration and a 1 percent reduction in sales from foreign exchange. The company's previous 2017 guidance, communicated on January 25, 2017, was sales growth of 2 to 6 percent and earnings per share of $11.30 to $12.40.

Analysts polled by Thomson Reuters expect the company to report earnings of $11.87 per share and revenues of $10.5 billion for fiscal year 2017. Analysts' estimates typically exclude special items.

Net earnings for the 2017 first quarter ended March 31, 2017 of $175 million were down 6 percent versus $187 million in 2016. Earnings per share of $2.93 declined 2 percent versus $2.98 in 2016.

Sales of $2.5 billion increased 1 percent versus $2.5 billion in the first quarter of 2016. There were 64 selling days in the 2017 first quarter, the same as the 2016 first quarter. Sales increased 1 percent in the 2017 first quarter versus the prior year, driven by a 5 percentage point increase from volume growth, partially offset by a 3 percentage point decline in price and a 1 percentage point decline from lower sales of seasonal products.

Analysts polled by Thomson Reuters expected the company to report earnings of $2.99 per share and revenues of $2.56 billion for the first-quarter. Analysts' estimates typically exclude special items.

The company noted that it will continue to aggressively take action to improve gross margins and reduce cost structure in Canada with the expectation of hitting break-even by the end of 2017.