Grainger (GWW) Set to Report Q1 Earnings: What's in Store?

Zacks Equity Research

April 22, 2024 at 11:47 a.m.·4 min read

W.W. Grainger, Inc. GWW is scheduled to report first-quarter 2024 results on Apr 25, before the opening bell.

Q1 Estimates

The Zacks Consensus Estimate for GWW’s first-quarter revenues is pegged at $4.28 billion, indicating growth of 4.6% from the year-ago quarter’s reported figure. The consensus mark for earnings per share is pegged at $9.58, implying a dip of 0.3% from the prior-year quarter's reported level.

W.W. Grainger, Inc. Price and EPS Surprise

W.W. Grainger, Inc. price-eps-surprise | W.W. Grainger, Inc. Quote

Q4 Results

In the last reported quarter, Grainger’s earnings surpassed the Zacks Consensus Estimate, while revenues missed the same. The top and bottom lines increased year over year. GWW's earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 6.5%.

What the Zacks Model Indicates

Our proven model does not conclusively predict an earnings beat for Grainger this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here.

Earnings ESP: Grainger has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: GWW currently carries a Zacks Rank #2.

Factors to Note

Grainger has been witnessing strong growth in core and non-pandemic product sales for the past few quarters. The company’s product mix has been stabilizing as customers are returning to normal operations post-pandemic.

Also, GWW has been focusing on improving the end-to-end customer experience by making investments in its e-commerce and digital capabilities, and executing improvement initiatives within its supply chain. These factors are likely to have contributed to the company’s first-quarter performance. We expect organic daily sales growth of 4.6% for the quarter.

The company’s High-Touch Solutions North America segment is expected to have benefited from strength in commercial, transportation and heavy manufacturing, strong revenue growth across its North America regions, and an expansion in the number of large and midsize customers. Our model projects quarterly organic daily sales to grow 3.7% from the year-ago quarter's reported level.

Grainger has been witnessing market-beating growth in the High-Touch Solutions segment compared with the U.S. MRO (maintenance, repair and operating) market. This outperformance can be attributed to strategic activities, such as building advantaged MRO solutions, delivering unparalleled customer services, and offering differentiated sales and services.

We expect the segment’s revenues to be $3.4 billion for the first quarter of 2024, up 3.2% from the first-quarter 2023 reported level.

GWW’s Endless Assortment segment is likely to have benefited from strong customer acquisition and repeat business in the quarter to be reported. Our model predicts quarterly organic daily sales to grow 8.1% from the prior-year reported level.

Customer growth at MonotaRO is expected to have positively impacted the segment’s revenues. Our model predicts the Endless Assortment segment’s revenues to be $783 million, up 8.1% from the prior-year quarter’s reported figure.

However, GWW has been witnessing elevated material and freight costs for some time. This, coupled with higher operating costs and incremental SG&A expenses due to higher technology investments, is likely to have negatively impacted its margins in the quarter under review.

Price Performance

Grainger's shares have risen 41% in a year compared with the industry’s growth of 8.2%.

Image Source: Zacks Investment Research

Stocks to Consider

Here are some companies with the right combination of elements to post an earnings beat in their upcoming releases.

Eaton Corporation plc ETN, expected to release earnings soon, has an Earnings ESP of +1.95%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Eaton’s earnings for the first quarter of 2024 is pegged at $2.28 per share. ETN currently carries a Zacks Rank of 2. It has a trailing four-quarter average surprise of 4.8%

Ingersoll Rand Inc. IR, scheduled to release its first-quarter 2024 on May 2, has an Earnings ESP of +1.82% and a Zacks Rank of 2.

The Zacks Consensus Estimate for Ingersoll Rand’s first-quarter 2024 earnings is pegged at 69 cents per share. It has a trailing four-quarter average surprise of 15.9%.

AptarGroup, Inc. ATR is scheduled to release its first-quarter 2024 results on Apr 25. It has an Earnings ESP of +0.59% and a Zacks Rank #3 at present.

The Zacks Consensus Estimate for ATR’s first-quarter earnings is pegged at $1.13 per share. It has a trailing four-quarter average surprise of 7.8%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Eaton Corporation, PLC (ETN) : Free Stock Analysis Report

W.W. Grainger, Inc. (GWW) : Free Stock Analysis Report

Ingersoll Rand Inc. (IR) : Free Stock Analysis Report

AptarGroup, Inc. (ATR) : Free Stock Analysis Report

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