W.W. Grainger (GWW) 10-Q 25 Apr 24 2024 Q1 Quarterly report Financial data

COVER

COVER - shares	3 Months Ended
	Mar. 31, 2024	Apr. 18, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	1-5684
Entity Registrant Name	W.W. Grainger, Inc.
Entity Incorporation, State or Country Code	IL
Entity Tax Identification Number	36-1150280
Entity Address, Address Line One	100 Grainger Parkway
Entity Address, City or Town	Lake Forest,
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60045-5201
City Area Code	847
Local Phone Number	535-1000
Title of 12(b) Security	Common Stock
Trading Symbol	GWW
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		49,068,805
Entity Central Index Key	0000277135
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Statement [Abstract]
Net sales	$ 4,235	$ 4,091
Cost of goods sold	2,567	2,457
Gross profit	1,668	1,634
Selling, general and administrative expenses	999	954
Operating earnings	669	680
Other expense (income):
Interest expense – net	21	24
Other – net	(7)	(6)
Total other expense – net	14	18
Earnings before income taxes	655	662
Income tax provision	158	154
Net earnings	497	508
Less net earnings attributable to noncontrolling interest	19	20
Net earnings attributable to W.W. Grainger, Inc.	$ 478	$ 488
Earnings per share:
Basic (in dollars per share)	$ 9.65	$ 9.66
Diluted (in dollars per share)	$ 9.62	$ 9.61
Weighted average number of shares outstanding:
Basic (in shares)	49.2	50.2
Diluted (in shares)	49.4	50.5

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Comprehensive Income [Abstract]
Net earnings	$ 497	$ 508
Other comprehensive earnings (losses):
Foreign currency translation adjustments – net of reclassification to earnings	(54)	2
Postretirement benefit plan losses and other – net of tax benefit of $1 and $1, respectively	(3)	(3)
Total other comprehensive earnings (losses)	(57)	(1)
Comprehensive earnings – net of tax	440	507
Less comprehensive earnings (losses) attributable to noncontrolling interest
Net earnings	19	20
Foreign currency translation adjustments	(22)	(5)
Total comprehensive earnings (losses) attributable to noncontrolling interest	(3)	15
Comprehensive earnings attributable to W.W. Grainger, Inc.	$ 443	$ 492

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (PARENTHETICAL) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Comprehensive Income [Abstract]
Postretirement benefit plan reclassification, net of tax benefit	$ 1	$ 1

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Current assets
Cash and cash equivalents	$ 804	$ 660
Accounts receivable (less allowances for credit losses of $36 and $35, respectively)	2,330	2,192
Inventories – net	2,178	2,266
Prepaid expenses and other current assets	228	156
Total current assets	5,540	5,274
Property, buildings and equipment – net	1,667	1,658
Goodwill	364	370
Intangibles – net	236	234
Operating lease right-of-use	408	429
Other assets	185	182
Total assets	8,400	8,147
Current liabilities
Current maturities	501	34
Trade accounts payable	1,133	954
Accrued compensation and benefits	235	327
Operating lease liability	71	71
Accrued expenses	444	397
Income taxes payable	144	48
Total current liabilities	2,528	1,831
Long-term debt	1,783	2,266
Long-term operating lease liability	359	381
Deferred income taxes and tax uncertainties	101	104
Other non-current liabilities	120	124
Shareholders' equity
Cumulative preferred stock – $5 par value – 12,000,000 shares authorized; none issued or outstanding	0	0
Common Stock – $0.50 par value – 300,000,000 shares authorized; 109,659,219 shares issued	55	55
Additional contributed capital	1,363	1,355
Retained earnings	12,548	12,162
Accumulated other comprehensive losses	(207)	(172)
Treasury stock, at cost – 60,582,972 and 60,341,817 shares, respectively	(10,560)	(10,285)
Total W.W. Grainger, Inc. shareholders’ equity	3,199	3,115
Noncontrolling interest	310	326
Total shareholders' equity	3,509	3,441
Total liabilities and shareholders' equity	$ 8,400	$ 8,147

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 36	$ 35
Cumulative preferred stock, par value (in dollars per share)	$ 5	$ 5
Cumulative preferred stock, shares authorized	12,000,000	12,000,000
Cumulative preferred stock, shares issued	0	0
Cumulative preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.50	$ 0.50
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	109,659,219	109,659,219
Treasury stock, shares at cost	60,582,972	60,341,817

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net earnings	$ 497	$ 508
Adjustments to reconcile net earnings to net cash provided by operating activities:
Provision for credit losses	6	4
Deferred income taxes and tax uncertainties	(2)	10
Depreciation and amortization	56	50
Non-cash lease expense	21	17
Stock-based compensation	11	12
Change in operating assets and liabilities:
Accounts receivable	(163)	(162)
Inventories	76	4
Prepaid expenses and other assets	(85)	74
Trade accounts payable	202	53
Operating lease liabilities	(23)	(21)
Accrued liabilities	(35)	(193)
Income taxes – net	107	102
Other non-current liabilities	(7)	(4)
Net cash provided by operating activities	661	454
Cash flows from investing activities:
Capital expenditures	(119)	(98)
Proceeds from sale of assets	1	2
Net cash used in investing activities	(118)	(96)
Cash flows from financing activities:
Proceeds from debt	1	6
Payments of debt	(17)	(18)
Proceeds from stock options exercised	9	23
Payments for employee taxes withheld from stock awards	(10)	(3)
Purchases of treasury stock	(268)	(142)
Cash dividends paid	(105)	(87)
Other – net	(1)	(3)
Net cash used in financing activities	(391)	(224)
Exchange rate effect on cash and cash equivalents	(8)	2
Net change in cash and cash equivalents	144	136
Cash and cash equivalents at beginning of year	660	325
Cash and cash equivalents at end of period	$ 804	$ 461

CONDENSED CONSOLIDATED STATEM_5

CONDENSED CONSOLIDATED STATEMENT OF SHAREDHOLDERS' EQUITY - USD ($) $ in Millions	Total	Common Stock	Additional Contributed Capital	Retained Earnings	Accumulated Other Comprehensive Earnings (Losses)	Treasury Stock	Noncontrolling Interest
Beginning balance at Dec. 31, 2022	$ 2,735	$ 55	$ 1,310	$ 10,700	$ (180)	$ (9,445)	$ 295
Increase (Decrease) in Stockholders' Equity
Stock-based compensation	32		14			18
Purchases of treasury stock	(142)					(142)
Net earnings	508			488			20
Other comprehensive earnings (losses)	(1)				4		(5)
Cash dividends paid	(87)			(87)
Ending balance at Mar. 31, 2023	3,045	55	1,324	11,101	(176)	(9,569)	310
Beginning balance at Dec. 31, 2023	3,441	55	1,355	12,162	(172)	(10,285)	326
Increase (Decrease) in Stockholders' Equity
Stock-based compensation	10		8			2
Purchases of treasury stock	(277)					(277)
Net earnings	497			478			19
Other comprehensive earnings (losses)	(57)				(35)		(22)
Cash dividends paid	(105)			(92)			(13)
Ending balance at Mar. 31, 2024	$ 3,509	$ 55	$ 1,363	$ 12,548	$ (207)	$ (10,560)	$ 310

CONDENSED CONSOLIDATED STATEM_6

CONDENSED CONSOLIDATED STATEMENT OF SHAREDHOLDERS' EQUITY (PARENTHETICAL) - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Stockholders' Equity [Abstract]
Cash dividends paid per share (in dollars per share)	$ 1.86	$ 1.72

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES W.W. Grainger, Inc. is a broad line, business-to-business distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America (N.A.), Japan and the United Kingdom (U.K.). In this report, the words “Grainger” or “Company” mean W.W. Grainger, Inc. and its subsidiaries, except where the context makes it clear that the reference is only to W.W. Grainger, Inc. itself and not its subsidiaries. Basis of Presentation The Company's Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting and the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and therefore do not include all information and disclosures normally included in the annual Consolidated Financial Statements. The preparation of these Condensed Consolidated Financial Statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from these estimated amounts. In the opinion of the Company’s management, the Condensed Consolidated Financial Statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The Condensed Consolidated Balance Sheet at December 31, 2023, has been derived from the audited Consolidated Financial Statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 22, 2024 (2023 Form 10-K). There were no material changes to the Company’s significant accounting policies from those disclosed in Note 1 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data in the Company's 2023 Form 10-K.

REVENUE

REVENUE	3 Months Ended
	Mar. 31, 2024
Revenue from Contract with Customer [Abstract]
REVENUE	REVENUE Grainger serves a large number of customers in diverse industries, which are subject to different economic and market-specific factors. The Company's revenue is primarily comprised of M RO product sales and related activities. The Company's presentation of revenue by segment and customer industry most reasonably depicts how the nature, amount, timing and uncertainty of the Company's revenue and cash flows are affected by economic and market-specific factors. The majority of Company revenue originates from contracts with a single performance obligation to deliver products, whereby performance obligations are satisfied when control of the product is transferred to the customer per the arranged shipping terms. The following table presents the Company's percentage of revenue by reportable segment and by major customer industry: Three Months Ended March 31, 2024 2023 Customer Industry (1) High-Touch Solutions N.A. Endless Assortment Total Company (2) High-Touch Solutions N.A. Endless Assortment Total Company (2) Manufacturing 32 % 29 % 31 % 31 % 30 % 31 % Government 18 % 3 % 15 % 18 % 3 % 15 % Wholesale 8 % 18 % 9 % 7 % 17 % 9 % Commercial Services 7 % 11 % 8 % 7 % 12 % 8 % Contractors 5 % 11 % 6 % 5 % 12 % 6 % Healthcare 7 % 1 % 6 % 7 % 2 % 6 % Retail 4 % 4 % 4 % 4 % 4 % 4 % Transportation 4 % 2 % 4 % 4 % 2 % 4 % Utilities 3 % 2 % 3 % 3 % 2 % 3 % Warehousing 2 % — % 2 % 4 % — % 3 % Other (3) 10 % 19 % 12 % 10 % 16 % 11 % Total net sales 100 % 100 % 100 % 100 % 100 % 100 % Percent of total company revenue 80 % 18 % 100 % 81 % 18 % 100 % (1) Customer industry results for the three months ended March 31, 2024 and 2023 primarily use the North American Industry Classification System (NAICS). As customers' businesses evolve, industry classifications may change. When these changes occur, Grainger does not recast the customer classification for prior periods as the industry used in the prior period was appropriate at the point-in-time. As a result, year-over-year changes may be impacted. (2) Total Company includes other businesses, which includes the Company's Cromwell business. Other businesses account for approximately 2% an d 1% of total Company reven ue for the three months ended March 31, 2024 and 2023, respectively. (3) Other primarily includes revenue from industries and customers that are not material individually, including hospitality, restaurants, property management and natural resources. Total accrued sales incentives are recorded in Accrued expenses and were approximately $112 million and $114 million as of March 31, 2024 and December 31, 2023, respectively. The Compa ny had no material unsatisfied performance obligations, contract assets or liabilities as of March 31, 2024 and December 31, 2023.

PROPERTY, BUILDINGS AND EQUIPME

PROPERTY, BUILDINGS AND EQUIPMENT	3 Months Ended
	Mar. 31, 2024
Property, Plant and Equipment [Abstract]
PROPERTY, BUILDINGS AND EQUIPMENT	PROPERTY, BUILDINGS AND EQUIPMENT Property, buildings and equipment consisted of the following (in millions of dollars): As of March 31, 2024 December 31, 2023 Land and land improvements $ 397 $ 397 Building, structures and improvements 1,476 1,469 Furniture, fixtures, machinery and equipment 1,881 1,852 Property, buildings and equipment $ 3,754 $ 3,718 Less accumulated depreciation 2,087 2,060 Property, buildings and equipment – net $ 1,667 $ 1,658

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS	3 Months Ended
	Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL AND OTHER INTANGIBLE ASSETS	GOODWILL AND OTHER INTANGIBLE ASSETS The Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators during the three months ended March 31, 2024. As such, quantitative assessments were not required. The balances and changes in the carrying amount of goodwill by segment are as follows (in millions of dollars): High-Touch Solutions N.A. Endless Assortment Total Balance at January 1, 2023 $ 313 $ 58 $ 371 Translation 2 (3) (1) Balance at December 31, 2023 315 55 370 Translation (3) (3) (6) Balance at March 31, 2024 $ 312 $ 52 $ 364 The Company's cumulative goodwill impairments as of March 31, 2024 were $137 million. No g oodwill impairments were recorded for the three months ended March 31, 2024 and 2023. The balances and changes in intangible assets – net are as follows (in millions of dollars): As of March 31, 2024 December 31, 2023 Weighted average life Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Customer lists and relationships 10.7 years $ 165 $ 153 $ 12 $ 166 $ 153 $ 13 Trademarks, trade names and other 14.9 years 30 23 7 31 23 8 Non-amortized trade names and other Indefinite 19 — 19 20 — 20 Capitalized software 4.3 years 675 477 198 659 466 193 Total intangible assets 6.2 years $ 889 $ 653 $ 236 $ 876 $ 642 $ 234

DEBT

DEBT	3 Months Ended
	Mar. 31, 2024
Debt Disclosure [Abstract]
DEBT	DEBT Tota l debt, including long-term and cur rent maturities, consisted of the following (in millions of dollars): As of March 31, 2024 December 31, 2023 Carrying Value Fair Value Carrying Value Fair Value 4.60% senior notes due 2045 $ 1,000 $ 934 $ 1,000 $ 967 1.85% senior notes due 2025 — — 500 483 3.75% senior notes due 2046 400 328 400 336 4.20% senior notes due 2047 400 349 400 361 Debt issuance costs – net of amortization and other (17) (17) (34) (34) Long-term debt 1,783 1,594 2,266 2,113 1.85% senior notes due 2025 500 485 — — Japanese yen term loan 15 15 32 32 Other (14) (14) 2 2 Current maturities 501 486 34 34 Total debt $ 2,284 $ 2,080 $ 2,300 $ 2,147 Senior Notes Between 2015 and 2020, Grainger issue d $2.3 billion in unsecured debt (Senior Notes) primarily to provide flexibility in funding general working capital needs, share repurchases a nd long-term cash requirements. The Senior Notes require no principal payments until maturity and interest is paid semi-annually. The Company incurred debt issuance costs related to its Senior Notes , representing underwriting fees and other expenses. These costs were recorded as a contra-liability in Long-term debt and are being amortized over the term of the Senior Notes using the straight-line method to Interest expense – net. As of March 31, 2024 and December 31, 2023 , the unamortized costs were $18 million and $19 million, respectively. The Company uses interest rate swaps to manage the risks associated with its 1.85% Senior Notes. These swaps were designated for hedge accounting treatment as fair value hedges. The resulting carrying value adjustments are presented in Other in Current maturities as of March 31, 2024 and Other in Long-term debt as of December 31, 2023 in the table above. F or further discussion on the Company's hedge accounting policies, see Note 6. MonotaRO Term Loan In August 2020, MonotaRO Co., Ltd (MonotaRO) entered into a ¥9 billion te rm loan agreement to fund technology investments and the expansion of its distribution center (DC) network. As of March 31, 2024 and December 31, 2023, the carrying amount of the term loan in Current maturities was $15 million and $32 million, respectively. The term loan matures i n August 2024 and bears an average interest rate of 0.05%. Fair Value The estimated fair value of the Company’s Senior Notes was based on available external pricing data and current market rates for similar debt instruments, among other factors, which are classified as Level 2 inputs within the fair v

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS	3 Months Ended
	Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]
DERIVATIVE INSTRUMENTS	DERIVATIVE INSTRUMENTS The Company's earnings and cash flows are subject to fluctuations due to changes in foreign currency exchange and interest rates. Grainger currently enters into certain derivatives or other financial instruments to hedge against these risks. Fair Value Hedges The Company uses interest rate swaps to hedge a portion of its fixed-rate debt. These swaps are treated as fair value hedges and consequently the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item, are recognized in the Condensed Consolidated Statements of Earnings in Interest expense – net. The notional amount of the Company’s outstanding fair value hedges as of March 31, 2024 and December 31, 2023 wa s $450 million. Due to the high degree of effectiveness between the hedging instruments and the underlying exposures being hedged, no recognition of ineffectiveness was recorded for the three months ended March 31, 2024 and 2023. The liability hedged by the interest rate swaps is recorded in Current maturities as of March 31, 2024 and Long-term debt as of December 31, 2023 on the Condensed Consolidated Balance Sheets. The carrying amount of the hedged item, including the cumulative amount of fair value hedging adjustments was $434 million as of March 31, 2024 and $432 million as of December 31, 2023. The interest rate swaps are reported on the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 as shown in the following table (in millions of dollars): As of March 31, 2024 December 31, 2023 Accrued expenses $ 14 $ — Other non-current liabilities $ — $ 16 Fair Value The estimated fair values of the Company's derivative instruments were based on quoted market forward rates, which are classified as Level 2 inputs within the fair value hierarchy and reflect the present value of the amount that the Company would pay for contracts involving the same notional amounts and maturity dates. No adjustments were required during the current period to reflect the counterparty’s credit risk or t he Comp

SEGMENT INFORMATION

SEGMENT INFORMATION	3 Months Ended
	Mar. 31, 2024
Segment Reporting [Abstract]
SEGMENT INFORMATION	SEGMENT INFORMATION Grainger's two reportable segments are High-Touch Solutions N.A. and Endless Assortment. The remaining businesses, which include the Company's Cromwell business, are classified as Other to reconcile to consolidated results. These remaining businesses individually and in the aggregate do not meet the criteria of a reportable segment. The Company's corporate costs are allocated to each reportable segment based on benefits received. Additionally, intersegment sales transactions, which are sales between Grainger businesses in separate reportable segments, are eliminated within the segment to present only the impact of sales to external customers. Service fees for intersegment sales are included in each segment's Selling, general and administrative expenses and are also eliminated in the Company's Condensed Consolidated Financial Statements. Following is a summary of segment results (in millions of dollars): Three Months Ended March 31, 2024 2023 Net sales Operating earnings Net sales Operating earnings High-Touch Solutions N.A. $ 3,405 $ 610 $ 3,294 $ 621 Endless Assortment 751 59 724 58 Other 79 — 73 1 Total Company $ 4,235 $ 669 $ 4,091 $ 680 The Company is a broad line distributor of MRO products and services. Products are regularly added and removed from the Company's inventory. Accordingly, it would be impractical to provide sales information by product category due to the way the business is managed and the dynamic nature of the inventory offered, including the evolving list of products stocked and additional products available online but not stocked. Assets for reportable segments are not disclosed as such information is not regularly reviewed by the Company's Chief Operating Decision Maker.

CONTINGENCIES AND LEGAL MATTERS

CONTINGENCIES AND LEGAL MATTERS	3 Months Ended
	Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]
CONTINGENCIES AND LEGAL MATTERS	CONTINGENCIES AND LEGAL MATTERS From time to time the Company is involved in various legal and administrative proceedings, including claims related to: product liability, safety or compliance; privacy and cybersecurity matters; negligence; contract disputes; environmental issues; unclaimed property; wage and hour laws; intellectual property; advertising and marketing; consumer protection; pricing (including disaster or emergency declaration pricing statutes); employment practices; regulatory compliance, including trade and export matters; anti-bribery and corruption; and other matters and actions brought by team members, consumers, competitors, suppliers, customers, governmental entities and other third parties. The Company has been engaged in litigation involving KMCO, LLC (KMCO) as described in previous quarterly and annual reports. The Company has since settled several of the personal injury lawsuits. Those settlements had, and continue to have, no effect on net earnings or cash flows. The Company continues to contest the remaining KMCO-related lawsuits and cannot predict the timing, outcome or any estimate of possible loss or range of losses on the remaining KMCO lawsuits.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS On April 24, 2024, the Company’s Board of Directors declared a quarterly dividend of $2.05 per share, payable June 1, 2024, to shareholders of record on May 13, 2024.

Pay vs Performance Disclosure

Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net Income (Loss) Attributable to Parent	$ 478	$ 488

Insider Trading Arrangements

Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2024
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	None of the Company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company's quarter ended March 31, 2024.
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

REVENUE (Tables)

REVENUE (Tables)	3 Months Ended
	Mar. 31, 2024
Revenue from Contract with Customer [Abstract]
Schedule of Disaggregation of Revenues	The following table presents the Company's percentage of revenue by reportable segment and by major customer industry: Three Months Ended March 31, 2024 2023 Customer Industry (1) High-Touch Solutions N.A. Endless Assortment Total Company (2) High-Touch Solutions N.A. Endless Assortment Total Company (2) Manufacturing 32 % 29 % 31 % 31 % 30 % 31 % Government 18 % 3 % 15 % 18 % 3 % 15 % Wholesale 8 % 18 % 9 % 7 % 17 % 9 % Commercial Services 7 % 11 % 8 % 7 % 12 % 8 % Contractors 5 % 11 % 6 % 5 % 12 % 6 % Healthcare 7 % 1 % 6 % 7 % 2 % 6 % Retail 4 % 4 % 4 % 4 % 4 % 4 % Transportation 4 % 2 % 4 % 4 % 2 % 4 % Utilities 3 % 2 % 3 % 3 % 2 % 3 % Warehousing 2 % — % 2 % 4 % — % 3 % Other (3) 10 % 19 % 12 % 10 % 16 % 11 % Total net sales 100 % 100 % 100 % 100 % 100 % 100 % Percent of total company revenue 80 % 18 % 100 % 81 % 18 % 100 % (1) Customer industry results for the three months ended March 31, 2024 and 2023 primarily use the North American Industry Classification System (NAICS). As customers' businesses evolve, industry classifications may change. When these changes occur, Grainger does not recast the customer classification for prior periods as the industry used in the prior period was appropriate at the point-in-time. As a result, year-over-year changes may be impacted. (2) Total Company includes other businesses, which includes the Company's Cromwell business. Other businesses account for approximately 2% an d 1% of total Company reven ue for the three months ended March 31, 2024 and 2023, respectively. (3) Other primarily includes revenue from industries and customers that are not material individually, including hospitality, restaurants, property management and natural resources.

PROPERTY, BUILDINGS AND EQUIP_2

PROPERTY, BUILDINGS AND EQUIPMENT (Tables)	3 Months Ended
	Mar. 31, 2024
Property, Plant and Equipment [Abstract]
Schedule of Property, Buildings and Equipment	Property, buildings and equipment consisted of the following (in millions of dollars): As of March 31, 2024 December 31, 2023 Land and land improvements $ 397 $ 397 Building, structures and improvements 1,476 1,469 Furniture, fixtures, machinery and equipment 1,881 1,852 Property, buildings and equipment $ 3,754 $ 3,718 Less accumulated depreciation 2,087 2,060 Property, buildings and equipment – net $ 1,667 $ 1,658

GOODWILL AND OTHER INTANGIBLE_2

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	3 Months Ended
	Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Balances and Changes in Carrying Amounts of Goodwill	The balances and changes in the carrying amount of goodwill by segment are as follows (in millions of dollars): High-Touch Solutions N.A. Endless Assortment Total Balance at January 1, 2023 $ 313 $ 58 $ 371 Translation 2 (3) (1) Balance at December 31, 2023 315 55 370 Translation (3) (3) (6) Balance at March 31, 2024 $ 312 $ 52 $ 364
Schedule of Balance in Intangible Assets, Net	The balances and changes in intangible assets – net are as follows (in millions of dollars): As of March 31, 2024 December 31, 2023 Weighted average life Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Customer lists and relationships 10.7 years $ 165 $ 153 $ 12 $ 166 $ 153 $ 13 Trademarks, trade names and other 14.9 years 30 23 7 31 23 8 Non-amortized trade names and other Indefinite 19 — 19 20 — 20 Capitalized software 4.3 years 675 477 198 659 466 193 Total intangible assets 6.2 years $ 889 $ 653 $ 236 $ 876 $ 642 $ 234

DEBT (Tables)

DEBT (Tables)	3 Months Ended
	Mar. 31, 2024
Debt Disclosure [Abstract]
Schedule of Long-Term Debt Instruments	Tota l debt, including long-term and cur rent maturities, consisted of the following (in millions of dollars): As of March 31, 2024 December 31, 2023 Carrying Value Fair Value Carrying Value Fair Value 4.60% senior notes due 2045 $ 1,000 $ 934 $ 1,000 $ 967 1.85% senior notes due 2025 — — 500 483 3.75% senior notes due 2046 400 328 400 336 4.20% senior notes due 2047 400 349 400 361 Debt issuance costs – net of amortization and other (17) (17) (34) (34) Long-term debt 1,783 1,594 2,266 2,113 1.85% senior notes due 2025 500 485 — — Japanese yen term loan 15 15 32 32 Other (14) (14) 2 2 Current maturities 501 486 34 34 Total debt $ 2,284 $ 2,080 $ 2,300 $ 2,147

DERIVATIVE INSTRUMENTS (Tables)

DERIVATIVE INSTRUMENTS (Tables)	3 Months Ended
	Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of Fair Value and Carrying Amounts of Outstanding Derivative Instruments	The interest rate swaps are reported on the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 as shown in the following table (in millions of dollars): As of March 31, 2024 December 31, 2023 Accrued expenses $ 14 $ — Other non-current liabilities $ — $ 16

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	3 Months Ended
	Mar. 31, 2024
Segment Reporting [Abstract]
Summary of Segment Results	Following is a summary of segment results (in millions of dollars): Three Months Ended March 31, 2024 2023 Net sales Operating earnings Net sales Operating earnings High-Touch Solutions N.A. $ 3,405 $ 610 $ 3,294 $ 621 Endless Assortment 751 59 724 58 Other 79 — 73 1 Total Company $ 4,235 $ 669 $ 4,091 $ 680

REVENUE - Disaggregation of Rev

REVENUE - Disaggregation of Revenues (Details)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	100%	100%
Percent of total company revenue	100%	100%
Operating earnings (losses)
Disaggregation of Revenue [Line Items]
Total company revenue (as a percent)	2%	1%
Manufacturing
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	31%	31%
Government
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	15%	15%
Wholesale
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	9%	9%
Commercial Services
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	8%	8%
Contractors
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	6%	6%
Healthcare
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	6%	6%
Retail
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	4%	4%
Transportation
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	4%	4%
Utilities
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	3%	3%
Warehousing
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	2%	3%
Other
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	12%	11%
High-Touch Solutions N.A.
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	100%	100%
Percent of total company revenue	80%	81%
High-Touch Solutions N.A. | Manufacturing
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	32%	31%
High-Touch Solutions N.A. | Government
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	18%	18%
High-Touch Solutions N.A. | Wholesale
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	8%	7%
High-Touch Solutions N.A. | Commercial Services
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	7%	7%
High-Touch Solutions N.A. | Contractors
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	5%	5%
High-Touch Solutions N.A. | Healthcare
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	7%	7%
High-Touch Solutions N.A. | Retail
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	4%	4%
High-Touch Solutions N.A. | Transportation
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	4%	4%
High-Touch Solutions N.A. | Utilities
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	3%	3%
High-Touch Solutions N.A. | Warehousing
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	2%	4%
High-Touch Solutions N.A. | Other
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	10%	10%
Endless Assortment
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	100%	100%
Percent of total company revenue	18%	18%
Endless Assortment | Manufacturing
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	29%	30%
Endless Assortment | Government
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	3%	3%
Endless Assortment | Wholesale
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	18%	17%
Endless Assortment | Commercial Services
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	11%	12%
Endless Assortment | Contractors
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	11%	12%
Endless Assortment | Healthcare
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	1%	2%
Endless Assortment | Retail
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	4%	4%
Endless Assortment | Transportation
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	2%	2%
Endless Assortment | Utilities
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	2%	2%
Endless Assortment | Warehousing
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	0%	0%
Endless Assortment | Other
Disaggregation of Revenue [Line Items]
Total net sales (as a percent)	19%	16%

REVENUE - Narrative (Details)

REVENUE - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Accrued sales incentives	$ 112	$ 114

PROPERTY, BUILDINGS AND EQUIP_3

PROPERTY, BUILDINGS AND EQUIPMENT (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property, buildings and equipment	$ 3,754	$ 3,718
Less accumulated depreciation	2,087	2,060
Property, buildings and equipment – net	1,667	1,658
Land
Property, Plant and Equipment [Line Items]
Property, buildings and equipment	397	397
Building, Structures and Improvements
Property, Plant and Equipment [Line Items]
Property, buildings and equipment	1,476	1,469
Furniture, Fixtures, Machinery and Equipment
Property, Plant and Equipment [Line Items]
Property, buildings and equipment	$ 1,881	$ 1,852

GOODWILL AND OTHER INTANGIBLE_3

GOODWILL AND OTHER INTANGIBLE ASSETS - Balances and Changes in Carrying Amounts of Goodwill (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 370	$ 371
Translation	(6)	(1)
Goodwill, ending balance	364	370
High-Touch Solutions N.A. | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items
Goodwill [Roll Forward]
Goodwill, beginning balance	315	313
Translation	(3)	2
Goodwill, ending balance	312	315
Endless Assortment | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items
Goodwill [Roll Forward]
Goodwill, beginning balance	55	58
Translation	(3)	(3)
Goodwill, ending balance	$ 52	$ 55

GOODWILL AND OTHER INTANGIBLE_4

GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Segment Reporting Information [Line Items]
Translation	$ (6)	$ (1)
Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items
Segment Reporting Information [Line Items]
Cumulative goodwill impairments	137
High-Touch Solutions N.A. | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items
Segment Reporting Information [Line Items]
Translation	$ (3)	$ 2

GOODWILL AND OTHER INTANGIBLE_5

GOODWILL AND OTHER INTANGIBLE ASSETS - Balance in Intangible Assets, Net (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Intangible Assets, Gross (Excluding Goodwill), Total	$ 889	$ 876
Accumulated amortization	653	642
Total intangible assets, net	$ 236	$ 234
Weighted average life
Weighted average life	6 years 2 months 12 days	6 years 2 months 12 days
Customer lists and relationships
Gross carrying amount	$ 165	$ 166
Accumulated amortization	153	153
Net carrying amount	$ 12	$ 13
Customer lists and relationships | Weighted average life
Weighted average life	10 years 8 months 12 days	10 years 8 months 12 days
Trademarks, trade names and other
Gross carrying amount	$ 30	$ 31
Accumulated amortization	23	23
Net carrying amount	$ 7	$ 8
Trademarks, trade names and other | Weighted average life
Weighted average life	14 years 10 months 24 days	14 years 10 months 24 days
Non-amortized trade names and other
Gross carrying amount	$ 19	$ 20
Accumulated amortization	0	0
Non-amortized trade names and other	19	20
Capitalized software
Gross carrying amount	675	659
Accumulated amortization	477	466
Net carrying amount	$ 198	$ 193
Capitalized software | Weighted average life
Weighted average life	4 years 3 months 18 days	4 years 3 months 18 days

DEBT - Long-Term Debt Instrumen

DEBT - Long-Term Debt Instruments (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023	Feb. 29, 2020
Debt Instrument [Line Items]
Debt issuance costs – net of amortization and other	$ (17)	$ (34)
Long-term debt	1,783	2,266
Current maturities	501	34
Long-term debt	2,284	2,300
Long-term debt, fair value	1,594	2,113
Debt issuance costs – net of amortization and other, fair value	(17)	(34)
Current maturities, fair value	486	34
Long-term debt, excluding current maturities, , fair value	2,080	2,147
Japanese yen term loan
Debt Instrument [Line Items]
Short-term debt	15	32
Short-term debt, fair value	15	32
Other
Debt Instrument [Line Items]
Other	(14)	2
Other, fair value	(14)	2
Senior Notes
Debt Instrument [Line Items]
Debt issuance costs – net of amortization and other	(18)	(19)
4.60% senior notes due 2045 | Senior Notes
Debt Instrument [Line Items]
Long-term debt, gross	1,000	1,000
Long-term debt, fair value	$ 934	967
Interest rate	4.60%
1.85% senior notes due 2025 | Senior Notes
Debt Instrument [Line Items]
Short-term debt	$ 500	0
Short-term debt, fair value	485	0
1.85% senior notes due 2025 | Senior Notes
Debt Instrument [Line Items]
Long-term debt, gross	0	500
Long-term debt, fair value	$ 0	483
Interest rate	1.85%		1.85%
3.75% senior notes due 2046 | Senior Notes
Debt Instrument [Line Items]
Long-term debt, gross	$ 400	400
Long-term debt, fair value	$ 328	336
Interest rate	3.75%
4.20% senior notes due 2047 | Senior Notes
Debt Instrument [Line Items]
Long-term debt, gross	$ 400	400
Long-term debt, fair value	$ 349	$ 361
Interest rate	4.20%

DEBT - Narrative (Details)

DEBT - Narrative (Details)	1 Months Ended
	Aug. 31, 2020 JPY (¥)	Mar. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)	Feb. 29, 2020
Debt Instrument [Line Items]
Debt issuance costs – net of amortization and other		$ 17,000,000	$ 34,000,000
Senior Notes
Debt Instrument [Line Items]
Debt principal amount			2,300,000,000
Debt issuance costs – net of amortization and other		$ 18,000,000	19,000,000
1.85% senior notes due 2025 | Senior Notes
Debt Instrument [Line Items]
Interest rate		1.85%		1.85%
Long-term debt, gross		$ 0	500,000,000
Term Loan Agreement, 0.05% | Japanese yen term loan
Debt Instrument [Line Items]
Debt principal amount | ¥	¥ 9,000,000,000
Long-term debt, gross		$ 15,000,000	$ 32,000,000
Average interest rate	0.05%

DERIVATIVE INSTRUMENTS - Narrat

DERIVATIVE INSTRUMENTS - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Derivative [Line Items]
Derivative instruments and hedges, liabilities	$ 434	$ 432
Fair Value Hedging | Designated as Hedging Instrument
Derivative [Line Items]
Derivative, notional amount	$ 450

DERIVATIVE INSTRUMENTS - Fair V

DERIVATIVE INSTRUMENTS - Fair Value and Carrying Amounts of Outstanding Derivative Instruments (Details) - Interest rate swaps - Designated as Hedging Instrument - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Accrued Liabilities
Derivative [Line Items]
Other non-current liabilities	$ 14	$ 0
Other Noncurrent Liabilities
Derivative [Line Items]
Other non-current liabilities	$ 0	$ 16

SEGMENT INFORMATION - Narrative

SEGMENT INFORMATION - Narrative (Details)	3 Months Ended
	Mar. 31, 2024 segment
Segment Reporting [Abstract]
Number of reportable segments	2

SEGMENT INFORMATION - Summary o

SEGMENT INFORMATION - Summary of Segment Results (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Segment Reporting Information [Line Items]
Total net sales	$ 4,235	$ 4,091
Segment operating earnings	669	680
Other
Segment Reporting Information [Line Items]
Total net sales	79	73
Segment operating earnings	0	1
High-Touch Solutions N.A. | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items
Segment Reporting Information [Line Items]
Total net sales	3,405	3,294
Segment operating earnings	610	621
Endless Assortment | Segment Balances Before Intersegment Eliminations and Consolidation Reconciling Items
Segment Reporting Information [Line Items]
Total net sales	751	724
Segment operating earnings	$ 59	$ 58

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details)	Apr. 24, 2024 $ / shares
Subsequent event
Subsequent Event [Line Items]
Dividend declared (in dollars per share)	$ 2.05