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GGG NYSE· Graco Inc.
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GGG NYSE· Graco Inc.
Earnings report Q4 2023

Graco Inc. Reports Strong Revenue Growth in Latest Quarter

Segments of revenue

Graco Inc. reported total net sales of $2.20 billion for the latest quarter, representing a significant increase compared to the same quarter in the previous year. The company's revenue growth was driven by strong performance across its various segments.

Strengths

Graco Inc. demonstrated robust revenue growth in the latest quarter, with net sales reaching $2.20 billion. This represents an increase of approximately $52 million compared to the previous year's quarter. The company's management attributed this growth to realized pricing, which contributed to a 4 percentage point increase in the gross profit margin rate. Graco Inc. also invested in new product development, allocating $83 million, or approximately 4 percent of sales, to drive future growth.

Challenges

While Graco Inc. experienced overall revenue growth, the company did face some challenges in the latest quarter. Operating expenses increased by $29 million compared to the previous year's quarter. This increase was primarily driven by higher spending on product development and other growth initiatives, incremental share-based compensation, and higher sales and earnings-based expenses. These increased expenses may put pressure on the company's profitability in the short term.

Noteworthy

Graco Inc. reported an 8 percent increase in operating earnings, driven by the strong sales growth. The operating earnings expressed as a percentage of sales also improved by 3 percentage points compared to the previous year's quarter, primarily due to realized pricing offsetting higher product costs and operating expenses. Additionally, the company's interest expense decreased by $5 million as private placement debt was repaid in the first quarter.

Summary

Graco Inc. delivered a strong performance in the latest quarter, with significant revenue growth driven by realized pricing and strong sales across its segments. The company's focus on new product development and growth initiatives demonstrates its commitment to driving future growth. However, increased operating expenses pose a challenge to the company's profitability. Overall, Graco Inc.'s solid revenue growth and improved operating earnings position it well for continued success in the future.

Source documents

Form 10-K  filed on Feb 20, 2024
134 pages scanned

Reference data

Company financials Q4 revenue 567M
Analyst estimates Q4 EPS beat by 9.44%
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