Sales increased for Grainger in Q3, up 3% to $2.6 billion (versus $2.5 billion). Cromwell Group, acquired in September 2015, contributed a 2% point.
Excluding acquisitions and foreign exchange (which contributed 1%), organic sales were flat. Gross profit margin fell 1.9% to 40% in Q3, due to an “unfavourable customer mix” and price deflation exceeding product cost deflation. Operating expenses fell 1%.
Grainger now anticipates 2016 sales growth to reach between 1.5% to 2.5%.
“We continue to operate in a challenging economic environment,” said DG Macpherson, CEO. “The third quarter results were within our expectations. I’m pleased with our ability to continue to effectively manage costs in this low growth environment while still investing in our future success.
“During the quarter, we continued to see strong revenue and earnings growth in our single channel online businesses, and we started operations in our new 1.3 million square foot distribution center in New Jersey. We expect fourth quarter demand to remain challenged, and as a result, we have narrowed our guidance and lowered the midpoint for the full year. We remain committed to managing the company for long-term success with a focus on providing our customers an exceptional experience at every touch.”
Further details in the Q3 results revealed ‘Other Businesses’ saw sales increase 39% in Q3, consisting of 16% points from Cromwell.