W.W. Grainger (GWW) reported a 6% year-over-year increase in sales in Feb 2013. The growth has decelerated from the prior-month increase of 8% and is one-third of highest growth rate of 18% achieved in the same period last year. However, Grainger shares fell 2% on the news.

Feb 2013 had 20 selling days, compared with 21 last year. The growth in Feb sales stemmed from higher volumes (4%) and prices (2%) and from acquisitions (1%), partially offset by a 1% decline from foreign exchange. Geographically, daily sales in the U.S. rose 7% helped by higher volume (3%), favorable pricing (2%), sale of seasonal products (1%) and acquisitions (1%). Commercial, Contractor and Retail were up in the mid-single digits while government was up in the low single digits.

Canada saw 6% growth in sales, driven by a 7 percentage point growth in volume, 1 percentage point increase in sales of seasonal products, offset by an unfavorable currency impact of 2 percentage points. In local currency, sales increased 8%, driven by growth in the Commercial, Construction, Oil and Gas end markets.

Daily sales at the company's Other businesses, which include operations in Asia, Europe and Latin America, increased 7%, driven by higher volume (9%), acquisitions (4%), partly offset by unfavorable impacts of foreign currency translation (6%).

According to Grainger, daily sales growth in March is currently trending below the 6% growth in February. The first quarter will have 63 selling days, one day less than the prior-year. The first quarter of 2013 will face tough comparison as it is pitted against 16% sales growth recorded in the first quarter of 2012.

Furthermore, Good Friday will fall in first quarter 2013. In 2012, the Easter holiday fell in the second quarter. Business is usually slow around the Easter holiday, with Good Friday generally representing a very light day.

Reflecting on the sales growth figures last year, we see that it trended in the upper double digits till March. The momentum slowed with growth hovering in the lower double digits till declining to 10% in August. Since then sales growth has remained in the single digits registering 9% in September and plunging to the lowest level of 2% in December. The timing of the holidays (Christmas and New Year’s Day) had a negative impact on sales in the fourth quarter. Although Grainger’s sales growth recovered to 8% in Jan 2013, it was almost half of the 17% growth achieved in January last year.

Grainger reported fourth-quarter earnings of $2.42 per share, up 14% year over year from $2.13 per share but well short of the Zacks Consensus Estimate of $2.61. Total revenue was $2.23 billion, up 7.2% from $2.08 billion in the year-ago period but missed the Zacks Consensus Estimate of $2.24 million. Grainger reaffirmed its EPS guidance in the range of $10.85-$12.00 per share for fiscal 2013. Grainger, however, increased its sales growth guidance to a new range of 3% to 9%, up from the prior projection of 2% to 8%.