W.W. Grainger, Inc. (NYSE:GWW) Q4 2022 Earnings Call Transcript

Pat Baumann: Great. And then my follow-up is just on — it’s also on gross margin, just to guide for ’23. Just wondering what the assumptions are kind of behind that modest contraction for some of these moving parts? Like is it price/cost negative which is offset by freight kind of those wash out and then kind of the decline is like just kind of segment mix related? Or is there anything in there for kind of the inventory adjustment dynamics to think about? Just wondering that year-over-year guide, how to think about the moving parts for that.

Dee Merriwether: No, I think you said it exactly right. I can repeat what you said, but we have some price/cost benefit timing. Some of that may fall away. We may have some freight efficiencies. Those may or may not cover that completely up. And then you’ve got the business unit mix between Endless Assortment and High-Touch and the fact that Endless Assortment is going to grow faster. So it has a negative impact.

Operator: And we have reached the end of our question-and-answer session today. I will now turn the call over to D.G. Macpherson for closing remarks.

D.G. Macpherson: Yes. Thanks for joining us today. I really appreciate you jumping on the call. Hopefully, you get a sense that we feel pretty good about the path we’re on. We’ve had at a really good year, but we’re more excited about the future and driving things to help our customers operate better and help them succeed. So with that, I’ll just say thanks for joining again, and hope you stay safe. If you’re going to get cold, I think, in the Northeast. So, hopefully, you don’t ice up too much. That does affect us too. But have a great rest of the week. Thank you.

Operator: Thank you. And this concludes today’s conference. You may disconnect your lines at this time. Thank you all for your participation.