#United States #Chicago #Q3 2025 #earnings report #W.W. Grainger

Grainger's Q3 2025 Financial Highlights

On October 31, 2025, W.W. Grainger, Inc. (NYSE: GWW) released its financial results for the third quarter, revealing a robust performance characterized by a significant sales increase and adjustments in earnings projections for the entire year. The reported sales reached $4.7 billion, marking a 6.1% increase compared to the same period in 2024, with a notable 5.4% rise on a daily, constant currency basis. This performance reflects Grainger’s commitment to delivering value and an outstanding customer experience.

Key Financial Metrics

• - Net Sales: $4,657 million
• - Gross Profit: $1,798 million
• - Operating Earnings: $511 million
• - Diluted Earnings Per Share (EPS): $6.12 (down 38.0%)
• - Adjusted Diluted EPS: $10.21 (up 3.4%)
• - Net Earnings: $294 million

D.G. Macpherson, Grainger's Chairman and CEO, emphasized the results align with their expectations and highlighted their ongoing strategy to navigate a complex market environment through efficient execution, exceptional service, and innovative capabilities.

Breakdown of Financial Performance

Revenue Growth

Grainger's sales rose primarily through its High-Touch Solutions - N.A. segment, which saw a 3.4% increase in sales, driven by growth in volume and effective price management reflecting tariff adjustments. Meanwhile, the Endless Assortment segment experienced a remarkable increase of 18.2% due to strong sales performances in its subsidiaries, MonotaRO and Zoro.

Despite the overall growth, Grainger's gross profit margin faced a slight decline, dropping to 38.6% from 39.2% in the previous year. This reduction was attributed to inflation from tariff-related costs impacting the High-Touch Solutions - N.A. segment. However, the Endless Assortment segment showed improvement, with a gross profit margin increase of 60 basis points compared to the prior year.

Adjusted Earnings

In terms of earnings, the reported operating earnings of Grainger stood at $511 million, which is a 25.5% decrease compared to Q3 2024. The adjusted operating earnings were more favorable at $707 million, representing a 3.1% increase. The adjusted operating margin was reported at 15.2%, slightly down from the adjusted figures of the previous year.

The diluted EPS of $6.12 reflects the challenges faced and the company's strategic decisions, including the planned exit from the U.K. market and the associated loss from the Cromwell divestiture, which impacted total earnings. Notably, the adjusted EPS of $10.21 indicates a positive trajectory, fueled by increased sales and decreased outstanding shares over the year.

Cash Flow and Shareholder Returns

During the third quarter, Grainger generated $597 million in operating cash flow and allocated $399 million back to shareholders via dividends and share repurchases. This demonstrates the company's commitment to delivering shareholder value even in a challenging market environment.

Updated Guidance

Grainger also updated its full-year 2025 guidance, narrowing the range for adjusted diluted EPS to between $39.00 and $39.75, reflecting their cautious approach amidst a fluctuating market.

The revised guidance aligns with anticipated sales growth of approximately 3.9% to 4.7% for the year, with adjustments accounting for various economic factors.

Conclusion

Grainger's sturdy performance in Q3 highlights the brand's resilient market positioning and its effort to maintain service excellence while offsetting external economic pressures. Looking forward, the company is poised to leverage its innovative capabilities and customer-centric focus to navigate ongoing market uncertainties successfully. Stakeholders remain optimistic about the future as Grainger adapts to evolving market dynamics and continues to provide significant value to its extensive customer base.

For more insights and to follow Grainger's journey in the forthcoming quarters, visit Grainger's Investor Relations page.