Deidra C. Merriwether
Senior Vice President and Chief Financial Officer at W.W. Grainger
Thanks, D.G. On slide seven, you can see the high-level results for the total company, including 4.9% growth on the daily organic constant currency basis. The quarter played out as anticipated despite tough comps, continued rebaselining of the Endless Assortment business and impact from holiday timing in the period. Operating margins were down 80 basis points year-over-year, finished largely as expected in the quarter. Gross margins were lower by 50 basis points as we lapped outsized favorability in the prior year period, and SG&A delevered 30 basis points as we ramp demand-generating investments to drive long-term, profitable share gain. In total, we delivered diluted EPS for the quarter of $9.62, up $0.01 over the prior year period and in line with our expectations to start the year. Moving on to segment-level results.
The High-Touch Solutions segment continues to perform well with sales up 3.4% on a reported basis or 3.8% on a daily organic constant currency basis. Volume growth remained strong, which offset a slight contraction in price due to timing. All geographies saw growth in the period. In the first quarter, the U.S. continued to see strong growth with contractors, government and health care customers. This growth offsets slowing demand in other end markets, including manufacturing and commercial services as well as the impact from holiday timing. Overall, demand remained soft but largely unchanged over the last few quarters. For the segment, gross profit finished the quarter at 41.8%, improving sequentially but below normal seasonality amidst a more muted pricing backdrop.
On a year-over-year basis, gross margin was down 60 basis points primarily due to the timing of price/cost spread along with the lap of a 20 basis point onetime favorable freight adjustment in the prior year. These headwinds were partially offset by continued freight and supply chain efficiencies, which began in the first quarter of 2023 and are now fully normalized. While the quarter finished in line with our expectations on the gross margin in total, we were a little more price/cost negative than anticipated as the timing of price and cost is never perfect. As the year progresses, we expect price/cost spread will recover and finish the year closer to neutral. SG&A delevered 40 basis points as we continue to invest in our demand-generating growth engines, including marketing and store head count.
We will continue to stay disciplined with our spending and rigorous and understanding cause and effect, but feel it's prudent to invest through the cycle to gain share over the long term. Overall, these results position us well for another strong year within the high-touch segment. Looking at market outgrowth on slide nine. We estimate that the U.S. MRO market, including volume and price, grew in the quarter between 2% and 3%, nearly all from continued price inflation. This indicates that the High-Touch Solutions U.S. business achieved roughly 150 basis points of market outgrowth in the first quarter in total. Similar to last quarter, this more muted quarterly outgrowth reflects the higher PPI-based price inflation in Grainger's first quarter price contribution.
As we mentioned in the past, there is no perfect market for our business, and we're comparing a broader external metric of inflation to our MRO product mix. There can be noise, especially in quarterly periods. That being said, as D.G. alluded earlier, inflation has been stickier than we originally anticipated, and we're taking some corrective actions in the second quarter to ensure we adhere to our two core pricing tenets: maintaining market driven prices while ensuring price/cost neutrality over time. Importantly, on a pure volume basis, we're looking at our volume contributions versus the growth in industrial production. Our volume outgrowth is closer to 450 basis points, reflecting continued strong performance for our high-touch growth engine.
Moving to our Endless Assortment segment. Sales increased 3.7% or 10% on a daily constant currency basis, which adjusts for the impact of the depreciated Japanese yen. Zoro U.S. was up 5.1%, while MonotaRo achieved 13.1% growth in local days, local currency. At a business level, Zoro saw continued strong growth from B2B customers who remained up year-over-year in the high single digits. This helped offset continued declines with noncore B2C and B2C-light customers, which were down double digits year-over-year. We expect these B2C headwinds to subside as the year progresses. At MonotaRO, sales were strong from continued growth with enterprise customers, coupled with solid repeat purchase rates within their core B2B customer base.
On a reported basis, however, these strong results are nearly all offset by continued foreign exchange rate pressures as the yen sinks to near all-time lows versus the dollar. Operating margins for the segment declined 20 basis points to 7.9% largely driven by gross margin favorability at MonotaRO from freight and supply chain efficiencies, which were more than offset by negative mix at Zoro as gross margins continue to normalize following the last few years of inflation. Overall, it was a good quarter for the Endless Assortment business. Now an update on the remainder of the year. Overall, we said Q1 played out much as we expected, and results aligned well within the guidance ranges we laid out at the beginning of the year.
This has continued into April with daily organic constant currency sales up 5.7% month-to-date. This gives us confidence to reiterate our current year -- our current full year 2024 guidance, which includes daily organic constant currency sales growth between 4% and 7% and EPS ranging between $38 and $40.50, up roughly 7% at the midpoint. On seasonality, top line comps get easier as we move through the year. Operating margin will dip down sequentially in the second quarter as gross margin moderated slightly, and SG&A leverage declines as merit increases go into effect and marketing investments continue to ramp. With that, we expect modest year-over-year EPS growth in the second quarter with earnings ramping from there in Q3 and Q4. Although we are maintaining our guidance ranges, I do want to call out the increasing headwind we're seeing from foreign exchange rates.
As it stands today, the dollar to yen spot rate sits roughly at 1.55, well above the 1.44 we originally planned in January and still assumed in our current guidance. If rates remain at these elevated levels, this would cause roughly $140 million incremental headwind to our full year 2024 reported net sales guidance at an approximate $0.13 decrease to annual EPS. Overall, we're pleased with how the business is performing and remain confident in holding expectations for the year.
With that, I'll pass it back to D.G.
