On this page of StockholderLetter.com we present the 3/14/2024 shareholder letter from W.W. GRAINGER, INC. — ticker symbol GWW. Reading current and past GWW letters to shareholders can bring important insights into the investment thesis.
2023 Annual Report
About Us W.W. Grainger, Inc., is a leading broad line distributor with operations primarily in North America, Japan and the United Kingdom. At Grainger, We Keep The World Working by serving more than 4.5 million customers worldwide with products delivered through innovative technology and deep customer relationships. With 2023 sales of $16.5 billion, the Company operates two business models. In the High-Touch Solutions segment, Grainger offers approximately 2 million maintenance, repair and operating (MRO) products and services, including technical support and inventory management. In the Endless Assortment segment, Zoro.com offers customers access to more than 13 million products, and MonotaRO.com offers more than 22 million products. For more information, visit www.grainger.com. 2023 Financial Summary During the year, the Company continued to drive strategy forward by remaining focused on what matters most providing our customers with a great experience and exceptional service. The result of this focus delivered record sales and earnings for the year. High-Touch Solutions N.A. Endless Assortment Other 1 Total Company $13.3B $2.9B $0.3B $16.5B Daily sales growth 2 9.3% 5.1% 14.1% 8.6% Daily, organic constant currency sales growth 2 9.4% 10.4% 13.5% 9.5% 17.8% 8.0% (0.8)% 15.7% 42.8% Revenue Adjusted Operating Margin 2 Adjusted ROIC 2 1 2 Grainger s businesses reported in Other do not meet the criteria of a reportable segment. Includes the Cromwell business in the U.K. Reconciliations of the non-GAAP measures referenced in the table above to the most directly comparable GAAP measures are provide on page 82 of this report. More than More than 26,000 4.5 million team members active customers 52 consecutive years of dividend increases >30 million products offered globally $ 1.2 billion returned to Grainger shareholders through dividends and share repurchases $16.5 billion in sales in 2023 More than 5,000 primary suppliers Grainger s common stock is listed on the New York Stock Exchange under the trading symbol GWW
Our Purpose SM Our Aspiration Our Strategy We relentlessly expand our leadership position by being the go-to partner for people who build and run safe, sustainable and productive operations. High-Touch Solutions model Endless Assortment model We deliver compelling value-added MRO solutions through our teams of specialists and curated digital experiences. We make business supply purchasing remarkably easy through a streamlined and transparent online relationship that provides access to everything a customer needs. Advantaged MRO solutions Differentiated sales and services Expansive product assortment Unparalleled customer service Innovative customer acquisition and retention capabilities The following principles are at the heart of how we work with one another, our customers, suppliers and communities. Act with intent Start with the customer Our Principles Win as one team Embrace curiosity Invest in our success Compete with urgency Do the right thing The Grainger Edge W.W. GRAINGER, INC. AND SUBSIDIARIES i
Grainger Shareholders: At Grainger, we believe our success is measured by the positive impact we have on our customers, communities and team members. That is why our purpose, We Keep The World Working, is embedded in everything we do it shapes our decisions, fuels our performance and inspires our more than 26,000 team members each day. In 2023, the Grainger Team strengthened our operational and service advantage in both the High-Touch Solutions and Endless Assortment segments and once again showed that we can deliver strong results which include: Delivered daily sales growth of 8.6% (9.5% in daily, organic constant currency) D.G. Macpherson Chairman of the Board and Chief Executive Officer Outgrew the U.S. maintenance, repair and operating (MRO) market by approximately 525 basis points in the High-Touch Solutions U.S. business Increased registered users by 14% in the total Endless Assortment model Expanded operating margins by 130 basis points to 15.7% Produced adjusted ROIC of 42.8%, up more than 200 basis points versus prior year Generated record operating cash flow of more than $2.0 billion Returned $1.2 billion to shareholders through dividends and share repurchases While proud of what we accomplished in 2023, we remain committed to winning for the long term. Over the past few years, we ve set out to accelerate our investments in supply chain capacity and technology to further strengthen our competitive advantage. The expansion of our supply chain network, including the recently announced distribution centers in Oregon and Texas as well as three new bulk warehouses, will contribute an additional 3.5 million square feet to the U.S. network a more than 35% increase from the start of the year. This expansion enhances our operational efficiency and supports our ability to meet the evolving needs of our customers. In addition to our supply chain expansion, we continue to build key technology infrastructure capabilities focused on two main domains that affect the customer experience: 1. Product Information Management, knowing our products better than anyone else, and 2. Customer Information Management, knowing our customers better than anyone else. These assets store, codify and scale our data, allowing us to leverage our deep product knowledge and understanding of the customer to enhance ii W.W. GRAINGER, INC. AND SUBSIDIARIES
... We Keep The World Working, is embedded in everything we do it shapes our decisions, fuels our performance and inspires our more than 26,000 team members each day. the Grainger experience. Along with this, we have invested in additional technology talent who partner with our MRO subject matter experts to bring Grainger s industry know-how to life. This partnership is yielding significant benefit and helping Grainger execute on our growth engines. Above all else, our success is intricately tied to the engagement of our team members to live our purpose. We received numerous workplace recognitions in 2023, which highlight the positive impact of the Grainger Edge on our team member experience and enhance our reputation as a great employer. These achievements are a testament to our unwavering commitment to creating a work environment that fosters growth, collaboration and a shared sense of purpose. As we close out 2023, I want to acknowledge someone who has made a meaningful impact on the Grainger culture. This year, Ann Hailey will retire from the Grainger Board of Directors after 18 years of service. I would like to thank Ann for her leadership, service, strategic counsel and the significant contributions she has provided to Grainger. It has been a true privilege to serve alongside her, and I wish her the very best in retirement. Since opening our doors in 1927, Grainger has built a deep trust with our customers as we strive to be their go-to partner to fulfill their MRO needs. As we look to 2024 and beyond, our team will advance the Grainger Edge to remain focused on what matters: delivering on our growth drivers to improve the customer experience, providing exceptional service, strengthening our culture and meeting our financial goals across both models. Thank you for your continued support, investment and trust in Grainger. D.G. Macpherson Chairman of the Board and Chief Executive Officer February 22, 2024 W.W. GRAINGER, INC. AND SUBSIDIARIES iii
 • shareholder letter icon 3/14/2024 Letter Continued (Full PDF)
 • stockholder letter icon 3/16/2023 GWW Stockholder Letter
 • stockholder letter icon 3/7/2025 GWW Stockholder Letter
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GWW 3/14/2024 Shareholder/Stockholder Letter Transcript:

2023
Annual Report

About Us
W.W. Grainger, Inc., is a leading broad line distributor with operations primarily in North America, Japan and the United Kingdom.
At Grainger, We Keep The World Working   by serving more than 4.5 million customers worldwide with products delivered through
innovative technology and deep customer relationships. With 2023 sales of $16.5 billion, the Company operates two business
models. In the High-Touch Solutions segment, Grainger offers approximately 2 million maintenance, repair and operating (MRO)
products and services, including technical support and inventory management. In the Endless Assortment segment, Zoro.com
offers customers access to more than 13 million products, and MonotaRO.com offers more than 22 million products. For more
information, visit www.grainger.com.
2023 Financial Summary
During the year, the Company continued to drive strategy forward by remaining focused on what matters most   providing our customers with a
great experience and exceptional service. The result of this focus delivered record sales and earnings for the year.
High-Touch Solutions N.A.
Endless Assortment
Other 1
Total Company
$13.3B
$2.9B
$0.3B
$16.5B
Daily sales growth 2
9.3%
5.1%
14.1%
8.6%
Daily, organic constant currency sales growth 2
9.4%
10.4%
13.5%
9.5%
17.8%
8.0%
(0.8)%
15.7%



42.8%
Revenue
Adjusted Operating Margin 2
Adjusted ROIC 2
1
2
Grainger   s businesses reported in    Other    do not meet the criteria of a reportable segment. Includes the Cromwell business in the U.K.
Reconciliations of the non-GAAP measures referenced in the table above to the most directly comparable GAAP measures are provide on page 82 of this report.
More than
More than
26,000
4.5 million
team members
active customers
52
consecutive years of
dividend increases
>30 million
products offered
globally
$ 1.2 billion
returned to Grainger
shareholders through dividends
and share repurchases
$16.5 billion
in sales in 2023
More than
5,000
primary suppliers
Grainger   s common stock is listed
on the New York Stock Exchange
under the trading symbol
GWW

Our Purpose
SM
Our Aspiration
Our Strategy
We relentlessly expand our leadership position by being the go-to partner
for people who build and run safe, sustainable and productive operations.
High-Touch Solutions model
Endless Assortment model
We deliver compelling value-added MRO
solutions through our teams of specialists
and curated digital experiences.
We make business supply purchasing
remarkably easy through a streamlined and
transparent online relationship that provides
access to everything a customer needs.
    Advantaged MRO solutions
    Differentiated sales and services
    Expansive product assortment
    Unparalleled customer service
    Innovative customer acquisition
and retention capabilities
The following principles are at the heart of how we work    with one another,
our customers, suppliers and communities.
Act with
intent
Start with the
customer
Our Principles
Win as
one team
Embrace
curiosity
Invest in our
success
Compete with
urgency
Do the
right thing
The Grainger Edge
W.W. GRAINGER, INC. AND SUBSIDIARIES i

Grainger Shareholders:
At Grainger, we believe our success is measured by the positive impact we have
on our customers, communities and team members. That is why our purpose,
We Keep The World Working,   is embedded in everything we do     it shapes our
decisions, fuels our performance and inspires our more than 26,000 team
members each day.
In 2023, the Grainger Team strengthened our operational and service advantage in
both the High-Touch Solutions and Endless Assortment segments and once again
showed that we can deliver strong results which include:
    Delivered daily sales growth of 8.6% (9.5% in daily, organic constant currency)
D.G. Macpherson
Chairman of the Board and
Chief Executive Officer
    Outgrew the U.S. maintenance, repair and operating (MRO) market by
approximately 525 basis points in the High-Touch Solutions U.S. business
    Increased registered users by 14% in the total Endless Assortment model
    Expanded operating margins by 130 basis points to 15.7%
    Produced adjusted ROIC of 42.8%, up more than 200 basis points versus prior year
    Generated record operating cash flow of more than $2.0 billion
    Returned $1.2 billion to shareholders through dividends and share repurchases
While proud of what we accomplished in 2023, we remain committed to winning for
the long term.
Over the past few years, we   ve set out to accelerate our investments in supply
chain capacity and technology to further strengthen our competitive advantage. The
expansion of our supply chain network, including the recently announced distribution
centers in Oregon and Texas as well as three new bulk warehouses, will contribute
an additional 3.5 million square feet to the U.S. network     a more than 35% increase
from the start of the year. This expansion enhances our operational efficiency
and supports our ability to meet the evolving needs of our customers.
In addition to our supply chain expansion, we continue to build key technology
infrastructure capabilities focused on two main domains that affect the customer
experience: 1. Product Information Management, knowing our products better than
anyone else, and 2. Customer Information Management, knowing our customers
better than anyone else. These assets store, codify and scale our data, allowing us to
leverage our deep product knowledge and understanding of the customer to enhance
ii W.W. GRAINGER, INC. AND SUBSIDIARIES

   ... We Keep The World Working, is embedded in everything we do   

it shapes our decisions, fuels our performance and inspires our
more than 26,000 team members each day.   
the Grainger experience. Along with this, we have invested in additional technology talent
who partner with our MRO subject matter experts to bring Grainger   s industry know-how
to life. This partnership is yielding significant benefit and helping Grainger execute on our
growth engines.
Above all else, our success is intricately tied to the engagement of our team members to
live our purpose. We received numerous workplace recognitions in 2023, which highlight
the positive impact of the Grainger Edge on our team member experience and enhance our
reputation as a great employer. These achievements are a testament to our unwavering
commitment to creating a work environment that fosters growth, collaboration and a
shared sense of purpose.
As we close out 2023, I want to acknowledge someone who has made a meaningful
impact on the Grainger culture. This year, Ann Hailey will retire from the Grainger Board
of Directors after 18 years of service. I would like to thank Ann for her leadership, service,
strategic counsel and the significant contributions she has provided to Grainger. It has
been a true privilege to serve alongside her, and I wish her the very best in retirement.
Since opening our doors in 1927, Grainger has built a deep trust with our customers as we
strive to be their go-to partner to fulfill their MRO needs. As we look to 2024 and beyond,
our team will advance the Grainger Edge to remain focused on what matters: delivering
on our growth drivers to improve the customer experience, providing exceptional service,
strengthening our culture and meeting our financial goals across both models.
Thank you for your continued support, investment and trust in Grainger.
D.G. Macpherson
Chairman of the Board and Chief Executive Officer
February 22, 2024
W.W. GRAINGER, INC. AND SUBSIDIARIES iii



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