W.W. Grainger, Inc. (NYSE:GWW) early Tuesday posted weaker than expected first quarter earnings results and slashed its full-year outlook, as it’s been forced to cut prices on various items in order to better compete in a tough business landscape.

Written by StockNews.com

The Lake Forest, IL-based maintenance supplies giant reported:

• Q1 earnings per share (EPS) of $2.88, which was $0.11 worse than the Wall Street consensus estimate of $2.99.
• Revenues rose 1.4% from last year to $2.54 billion, also falling short of analysts’ view for $2.57 billion.

Looking ahead, GWW cut its full-year earnings outlook.

• It now expects 2017 EPS of $10.00 to $11.30, down substantially from its prior view of $11.30 to $12.40 and well below the $11.85 Wall Street consensus estimate.
• It also sees full-year revenue growth of just 1% to 4% (down from +2% to +6%), implying sales of $10.24 to $10.54 billion. That could also miss analysts’ current view of $10.5 billion.

Despite the lackluster results and guidance, Chief Executive Officer DG Macpherson attempted to spin things in a positive light:

“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.

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. 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.”

W.W. Grainger Inc. shares were unchanged in premarket trading Tuesday, but it’s reasonable to expect a large gap down this morning when they do open for trading. Year-to-date, GWW had declined -3.53% prior to today’s report, versus a 5.40% rise in the benchmark S&P 500 index during the same period.

GWW currently has a StockNews.com POWR Rating of C (Neutral), and is ranked #26 of 56 stocks in the Industrial – Equipment category.