Graco Inc. reported a decline in financial performance for the nine months ended September 27, 2024, with net earnings of $377.4 million, down 5% from $396.6 million in the same period of 2023. Net sales also decreased by 4%, totaling $1,564.6 million compared to $1,628.9 million in the prior year. The company's operating earnings for the nine months were $440.1 million, an 8% decrease from $476.9 million in 2023.
For the third quarter of 2024, Graco's net sales were $519.2 million, down 4% from $539.7 million in Q3 2023. Operating earnings for the quarter fell 11% to $145.7 million, while net earnings decreased by 8% to $122.2 million. The diluted earnings per share for Q3 2024 were $0.71, down from $0.77 in the same quarter of the previous year.
The decline in sales was attributed to lower sales volumes and higher operating expenses, which increased by 7% in Q3 2024 compared to the previous year. The increase in operating expenses was primarily due to investments in new product development and the relocation to a new distribution center. Despite these challenges, Graco reported an improvement in gross profit margin, which rose to 53.2% from 52.7% in Q3 2023.
Regionally, net sales in the Americas increased slightly, while the EMEA and Asia Pacific regions experienced declines. The contractor segment saw a 1% decrease in net sales for both the quarter and year-to-date, attributed to softness in worldwide construction markets. The industrial segment's net sales also fell, with a notable 27% decline in Asia Pacific for Q3 2024.
In terms of cash flow, Graco generated $436.5 million from operating activities in the first nine months of 2024, down from $491.4 million in the same period last year. The company reported a net cash increase of $226.5 million, with cash and cash equivalents at $764.5 million at the end of the period.
Strategically, Graco announced a definitive agreement to acquire Corob S.p.A. for €230 million, with the acquisition expected to close in Q4 2024. This acquisition aims to enhance Graco's capabilities in high-performance dispensing and mixing equipment for tinting applications. The company reaffirmed its full-year 2024 revenue guidance, anticipating a low single-digit decline on an organic, constant currency basis.
About GRACO INC
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