Shares of industrial maintenance and safety products supplier W.W. Grainger Inc. (NYSE: GWW) plummeted around 7% in pre-market trading on Friday after the company reported mixed fourth-quarter results and issued lower-than-expected guidance for 2025 due to a muted demand environment.

For the fourth quarter of 2024, Grainger reported earnings per share of $9.71, missing analysts' estimates of $9.75. However, the company's revenue of $4.23 billion was in line with expectations, up 5.9% year-over-year. The sales growth was driven by continued momentum across both the High-Touch Solutions N.A. and Endless Assortment segments.

Looking ahead to 2025, Grainger forecasted earnings per share in the range of $39 to $41.50, lower than analysts' consensus estimate of $42.14. The company also projected full-year revenue between $17.6 billion and $18.1 billion, missing Wall Street's expectations of $18.2 billion. Grainger cited a "muted demand environment" as the primary reason behind the weaker-than-expected guidance.

"Amidst a stable, yet muted demand environment throughout 2024, our team delivered strong performance by staying focused on what matters and delivering an outstanding customer experience," said D.G. Macpherson, Chairman and CEO. "Across both our High-Touch Solutions and Endless Assortment segments, we deepened our customer relationships and advanced our capabilities, all while delivering on our commitments to shareholders."

Despite the solid performance in 2024, with sales up 4.2% and adjusted earnings per share up 6.2%, Grainger's financial metrics showed some signs of slowing growth compared to recent years. The company's operating margin contracted by 20 basis points, and its two-year EPS growth rate of 13.5% was lower than its five-year trend of 20.4%.