W.W. Grainger (GWW) re-entered a buy zone after the industrial supplies retailer and distributor crushed on earnings and issued sunny guidance Thursday.

W.W. Grainger’s Q1 EPS shot up by 45% to $4.18 per share. This was far ahead of analyst views for $3.41 according to Zacks Investment Research.

In addition, the distributor of maintenance and repair supplies saw revenue swell 9% to $2.766 billion, which was modestly above views for $2.701 billion.

Earnings and sales growth were the best in years, both accelerating for the past two quarters. Grainger provides an indication about the health of the manufacturing and industrial sector.



Shares rose 5.3% to 299.88 on the stock market today, reclaiming a 292.57 buy point from a cup-with-handle base, MarketSmith analysis shows.

The stock is currently ranked 9th in the Retail/Wholesale-Building Products Group. Leader Floor & Decor (FND) was down 0.6%, industrial distributor HD Supply (HDS) dipped 0.3% and Applied Industrial Technologies (AIT) inched down 0.1%. Construction supplies giant Fastenal (FAST) fell 0.2%.

Grainger has a decent IBD Composite Rating of 85, which puts it in the top 15% of stocks tracked. Its relative strength line is near a 12-month high and it is trading above its 50-day line, a key technical support level.

While the S&P 500 index has increased by a bit more than 1% in the last 12 months, the distribution giant’s stock has soared 44%.

W.W. Grainger Guidance Upbeat

In its earnings release the company guided its 2018 sales and earnings per share upwards for the year. It expects sales growth of 5% to 8% and EPS of $14.30 to $15.30.

This is better than the previous 2018 guidance issued in January, which predicted sales growth of 3% to 7% and EPS of $12.95 to $14.15. Analysts had seen full-year EPS at $13.82.

Earlier this month Fastenal reported higher first-quarter earnings and sales, but only met analyst views. Investors were not happy, sending shares of the construction supply giant sharply lower.

W.W. Grainger’s revenue generally comes from business-to-business rather than retail sales.

It serves more than 3 million customers through its network of almost 600 branches, online channels and 33 distribution centers.