W.W. Grainger Inc., Chicago, reported an 8 percent sales decline versus first quarter 2001, but its net earnings increased 39 percent to $58 million, for that period.
Sales in the 2002 first quarter were $1.1 billion, down from $1.2 billion in 2001's first quarter.
Richard L. Keyser, the company's chairman and CEO said, “Despite a difficult economic environment, we were able to grow earnings and expand operating margins. Because we do not expect to see a quick economic recovery, we anticipate the second quarter will be particularly challenging from an operating perspective. We are committed to making sustained productivity improvements and investments that will deliver better sales growth.”
Sales in the company's branch-based Distribution Businesses segment declined by 8 percent in the 2002 first quarter, a result of the economy, weak natural resource end markets in Canada, and one less selling day. While most customer segments were down, the company reported an 11 percent increase in sales to government customers in the United States. Also in the quarter, the company processed $95 million in sales through its primary Web site, grainger.com. This is an increase of 26 percent versus the 2001 first quarter.
Sales for Grainger Integrated Supply were up 36 percent, primarily because of the an increase in the number of locations it serves at existing customers. Operating earnings for this segment were $1.6 million as compared to $400 thousand in the 2001 first quarter, an increase of more than 300 percent. This improvement was the result of eliminating or restructuring unprofitable contracts throughout 2001 and productivity gains attained through leveraging the existing cost structure. During its first quarter, the company added more than $50 million in inventory in anticipation of an economic recovery.