Graco (GGG) Tops Q4 EPS by 10c, Revenues Beat

Graco (NYSE: GGG) reported Q4 EPS of $0.61, $0.10 better than the analyst estimate of $0.51. Revenue for the quarter came in at $470.3 million versus the consensus estimate of $426.52 million.

• Sales increased by 14 percent in the quarter, led by double-digit sales growth in the Contractor segment and Asia Pacific region.
• Gross profit margin rate for the quarter increased due to strong realized pricing, improved sales volume in the Industrial segment and favorable effects of changes in currency translation rates. Unfavorable product and channel mix in the Contractor segment softened the increase in the gross profit margin rate.
• Operating expense leverage for the quarter remained strong.
• The effective income tax rate for the quarter decreased 5 percentage points primarily due to increases in excess tax benefits related to stock option exercises.

“Sales in the fourth quarter grew double digits on improving Industrial demand and continued strength in the Contractor segment,” said Patrick J. McHale, Graco’s President and CEO. “While several end markets remain soft, we saw improvements in our spray foam, electronics, battery and systems end markets during the quarter. Improvements in these markets coupled with continued robust sales in our professional paint and home center channels resulted in record quarterly sales. Thanks to the hard work of our employees, suppliers and distributors during a challenging 2020, we were able to stick to our playbook and fully fund our growth strategies.”

Outlook

“Heading into 2021, we expect challenging end market conditions to remain in place for at least the first half in many of our end markets as lockdowns continue,” said McHale. “Our outlook for the Contractor segment remains positive as favorable conditions continue, and demand for our products is solid across major end markets and product categories.”

For earnings history and earnings-related data on Graco (GGG) click here.

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