Shares in W.W. Grainger tumbled on Wednesday, apparently reflecting investor concern over the retirement of CFO Ron Jadin even though the industrial supplier’s latest quarterly earnings beat Wall Street estimates.
Jadin, 56, who joined the company in 1998 and has served as CFO since 2008, announced Wednesday he will be retiring at year-end. The news came as Grainger reported that its second-quarter profit fell 43% to $98 million from a year ago as it works to close unprofitable branches.
Excluding costs tied to restructuring and special items, the company posted adjusted earnings per share of $2.74, ahead of the $2.65 figure expected by analysts polled by Thomson Reuters. Revenue increased 2% to $2.62 billion.
“The second quarter was in line with our expectations, as we saw continued volume growth from our strategic pricing initiatives in the United States,” CEO D.G. Macpherson said in a news release,
Grainger also reiterated its full-year 2017 guidance of sales growth of 1% to 4% and adjusted earnings per share of $10.00 to $11.30. But in trading Wednesday, its shares fell just over 7% to $162.19.
Despite the earnings beat, profits were still down year-to-year and shareholders were “shocked to learn” of Jadin’s retirement, InvestorPlace reported, adding that “his exit will come at a time when the struggling company doesn’t need a disruption.”
The nation’s largest industrial distributor has been hurt by the shift of customers to online channels to buy maintenance, repair and operating supplies. As part of a restructuring plan that began two years ago, it has wound down its business in Colombia and closed 59 branches in Canada this year.
Grainger closed 159 branches in 2015 and 2016 combined, leaving about 600 branches at the end of last year, nearly half of them in the U.S.
Sales in Grainger’s U.S. segment were up 1% versus last year, while sales in Canada fell 3% and other segments increased 11%, largely driven by 23% sales growth in single-channel online businesses.