W.W. Grainger, Inc. (NYSE:GWW) Q3 2019 Earnings Conference Call - Final Transcript

Oct 23, 2019 • 11:00 am ET

Previous

W.W. Grainger, Inc. (NYSE:GWW) Q3 2019 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Presentation
Operator
Operator

Greetings and welcome to the W.W. Grainger Third Quarter 2019 Earnings Conference Call. [Operator Instructions]. It is now my pleasure to introduce your host, Irene Holman, Vice President, Investor Relations. Please go ahead.

Executive
Irene Holman

Good morning, welcome to Grainger's Q3 earnings call. With me are DG Macpherson, Chairman and CEO and Tom Okray, CFO. As a reminder, some of our comments may be forward-looking based on our current view of future events. Actual results may differ materially as a result of various risks and uncertainties, including those detailed in our SEC filings. Reconciliations of any non-GAAP financial measures mentioned on today's call with their corresponding GAAP measures are at the end of this slide presentation and in our Q3 press release, both of which are available on our IR website.

This morning's call will focus on adjusted results. And now, I'll turn it over to DG.

Executive
DG Macpherson

Thanks, Irene. Good morning, thank you for joining us today. I'm going to discuss our Q3 results, ensure an update on the US and endless assortment growth initiatives that we introduced earlier this year, and Tom will provide details on the quarter, and we'll open it up for questions.

We have had solid results so far this year as we manage through the uncertainty of the current environment. Despite softening global demand, we have accelerated our sequential share gain in the US business and continue to invest for growth in our endless assortment business, Zoro. We've also been diligent in partnering with our suppliers to manage cost and a driven expense leverage across our US and Canadian businesses.

Year-to-date total company operating margin is up 30 basis points that we've driven incremental margin of 26%.

We've also maintained the guidance that we said on the Q4 call in January for total company gross profit margin, operating margin, and earnings per share. I want to commend our team members for all the work they've done to strive during this environment. From our recent US customer visits, it's clear that demand has slowed, but it's also clear that things are not falling off a cliff, and that we have great opportunities to continue to gain share.

Earlier this month, I spent time with a large manufacturer in the Southeast, they have seen strong growth due to their ability to innovate. Our team members have build solid relationships with leadership and operation staff and are delivering solutions that matter. This customer reviews Grainger's providing exceptional service for a part of their operation. We have leveraged our KeepStock inventory management system to make it easy for this customer to have what they need when they need it.

We only have a portion of this customer spend today. Because of our reliable partnership and our ability to deliver real value, we're exploring ways to expand our offer. This means finding ways for this customer to save more money by ensuring that they're using the right products, at the right cost, and managing usage and inventory effectively. When we do these things