Grainger — No. 3 on Industrial Distribution's Big 50 List — reported its 2017 first quarter financials on Tuesday, led by a slight increase in year-over-year sales and a modest decline in profit, while the company detailed plans to accelerate changes to its pricing structure.
The company posted Q1 total sales of $2.54 billion, up 1.4 percent year-over-year. Operating profit of $295.5 million was down 6.8 percent, while total profit of $174.7 million declined 6.4 percent. Those figures follow a Q4 in which Grainger's sales declined 0.3 percent, operating profit declined 30.8 percent and total profit declined 58.2 percent.
Grainger primarily attributed the Q1 profit declines to changes in strategic pricing, which the company first described last November and CEO D.G. Macpherson discussed in-depth during the company's annual Grainger Show March 13 in Orlando.
"Overall, the first quarter clearly fell short of our expectations, driven primarily by the stronger than anticipated customer response to our U.S. strategic pricing actions, with a greater volume of products sold at more competitive prices," Macpherson said in Grainger's earnings release Tuesday, adding that the company will now accelerate those pricing changes going forward.
"Based on the positive customer response thus far, we are pulling forward the remaining pricing actions originally scheduled for 2018 into the third quarter of this year," Macpherson said. "This decision requires a significant change to our earnings per share guidance for the year but should enable us to accelerate growth with existing customers and attract new customers sooner than planned."