Graco Inc. (GGG) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

October 27, 2022 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Third Quarter Conference Call for Graco Inc. If you wish to access the replay for this call, you may do so by visiting the company website at www.graco.com.

Graco has additional information available in a PowerPoint slide presentation, which is available as part of the webcast player. At the request of the company, we will open the conference up for questions-and-answers after the opening remarks from management.

During this call various remarks maybe made by management about their expectations, plans and prospects for the future. These remarks constitute forward-looking statements for the purposes of the safe harbor provisions of the Private Securities Litigation Reform Act. Actual results may differ materially from those indicated as a result of various risk factors, including those identified in Item 1A of the company's 2021 annual report on Form 10-K and in Item 1A of the company's most recent quarterly report on Form 10-Q. These reports are available on the company's website at www.graco.com and the SEC's website at www.sec.gov.

Forward-looking statements reflect management's current views and speak only as of the time they are made. The company undertakes no obligation to update these statements in light of new information or future events.

I will now turn the conference over to Kathy Schoenrock, Executive Vice President, Corporate Controller and Information Systems.

Kathy Schoenrock

Good morning, everyone, and thank you for joining our call. I'm here today with Mark Sheahan and David Lowe. I will provide an overview of our quarterly results before turning the call over to Mark for additional discussion.

Yesterday, we reported record third quarter sales of $546 million, an increase of 12% from the third quarter of last year. The effect of currency translation rates was a significant headwind in the quarter. On a constant currency basis, sales increased 17% with growth in every segment and regions.

Reported net earnings were $116 million for the quarter and despite a $0.05 headwind from foreign currency. Reported EPS was $0.67 per diluted share, an increase of 14%. We expect translation rates to continue to be a challenge for the remainder of the year. At current exchange rate, the full-year unfavorable effect of currency translations would decrease sales by 4% and earnings by 8% with a similar impact in the fourth quarter as we experienced this quarter.