Key Highlights

  • Third quarter sales rose 11.3% to USD 5.18 billion, ahead of the USD 5.08 billion estimate.
  • Adjusted EPS of USD 12.54 topped the USD 11.68 estimate, while reported EPS was USD 12.42.
  • Operating cash flow was USD 661 million, and USD 396 million went back to shareholders.
  • Full year adjusted EPS guidance moved to USD 47.00 to USD 48.00 from USD 45.50 to USD 47.25.

W.W. Grainger, Inc. (NYSE:GWW) reported third quarter net sales of USD 5.18 billion, up from USD 4.66 billion a year earlier and above the USD 5.08 billion estimate. Adjusted diluted EPS of USD 12.54 exceeded the USD 11.68 estimate and rose 22.8% year over year. Reported diluted EPS was USD 12.42, up 102.9% from USD 6.12, because the prior-year quarter carried a loss tied to the exit of the U.K. market.

Segment Growth and Pricing

Sales grew 11.3% as reported and 14.9% on a daily, organic constant currency basis, a measure that strips out the U.K. exit and currency swings. The High-Touch Solutions North America segment grew sales 13.8%, helped by double-digit Volume growth and price increases passed through to customers. The Endless Assortment segment, which includes MonotaRO and Zoro, grew 11.9%, or 19.3% on the organic constant currency basis.

Chief executive D.G. Macpherson said the quarter reflected consistent execution and an improving Demand environment, with both segments delivering strong growth.

Margins, Earnings and Cash

Gross profit rose 11.8% to USD 2.01 billion, a 38.8% Margin that was 20 basis points higher. High-Touch Solutions North America posted a 40.8% gross margin, down 30 basis points on freight costs and mix, while Endless Assortment margin improved 90 basis points.

Adjusted operating earnings were USD 836 million, up 18.2%, for a 16.1% margin that was 90 basis points higher. Reported operating earnings were USD 828 million, a 16.0% margin, up 500 basis points. Selling, general and administrative expenses fell to USD 1.18 billion from USD 1.29 billion. The effective tax rate was 24.3%, against 34.7% a year earlier, and weighted diluted shares declined to 47.1 million from 47.9 million.

Operating cash flow reached USD 661 million. After USD 115 million of capital expenditures, free cash flow was USD 546 million. Grainger returned USD 396 million through dividends and share repurchases.

Raised 2026 Guidance

Grainger raised its full year net sales range to USD 19.8 billion to USD 20.0 billion, from USD 19.4 billion to USD 19.7 billion. Daily, organic constant currency sales growth is guided to 13.0% to 14.5%, up from 11.5% to 13.0%. Operating Margin is guided to 16.0% to 16.2%, and Operating Cash Flow to USD 2.35 billion to USD 2.45 billion.

Segment operating margin guidance is 17.3% to 17.5% for High-Touch Solutions North America and 10.9% to 11.1% for Endless Assortment. The company guided to share repurchases of USD 975 million to USD 1.025 billion and an effective tax rate near 24.7%.

Key Figures Side by Side

Adjusted EPS of USD 12.54 compares with the USD 11.68 estimate and with USD 10.21 on an adjusted basis a year earlier, while the new full year guide of USD 47.00 to USD 48.00 compares with USD 45.50 to USD 47.25 previously. Third quarter sales of USD 5.18 billion sit against nine month sales of USD 14.94 billion, up from USD 13.52 billion. The 16.1% adjusted operating margin compares with the 16.0% to 16.2% full year guide.

Nine month reported diluted EPS stands at USD 36.08, compared with USD 25.97 in the first nine months of 2025.