GRAINGER REPORTS RESULTS FOR THE FIRST QUARTER 2026
Rhea-AI Summary
Grainger (NYSE: GWW) reported Q1 2026 sales of $4.742B, up 10.1% versus Q1 2025 and diluted EPS of $11.65, up 18.2%.
Operating margin rose to 16.7%, cash from operations was $739M, free cash flow was $569M, and the company raised full‑year 2026 adjusted EPS guidance to $44.25–$46.25.
Positive
- Net sales $4,742M, +10.1% vs. Q1 2025
- Diluted EPS $11.65, +18.2% vs. Q1 2025
- Operating cash flow $739M; free cash flow $569M
- Increased 2026 adjusted EPS guidance to $44.25–$46.25
Negative
- Effective tax rate increased to 25.1% from 23.9%
- Inventories essentially flat at $2,385M versus $2,394M
Key Figures
Market Reality Check
Peers on Argus
GWW is up 3.09% while key peers show mixed moves: FERG (-0.89%), FAST (-0.28%), POOL (-1.67%), WSO (+1.06%), WCC (+1.65%). This points to a stock-specific reaction to the earnings and guidance update rather than a broad sector rotation.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Feb 03 | Q4 & FY25 earnings | Positive | +5.4% | Reported FY2025 sales of $17.9B and adjusted EPS of $39.48 with solid cash flow. |
| Oct 31 | Q3 2025 earnings | Positive | +2.4% | Delivered $4.7B Q3 sales and adjusted EPS $10.21 while updating 2025 guidance. |
| Aug 01 | Q2 2025 earnings | Negative | -10.3% | Sales grew 5.6% but tariff headwinds cut margins and drove lower 2025 guidance. |
| May 01 | Q1 2025 earnings | Positive | +2.8% | Q1 sales reached $4.3B with EPS $9.86 and reaffirmed 2025 guidance and dividend hike. |
| Jan 31 | Q4 & FY24 earnings | Positive | -5.6% | Strong Q4 and FY2024 results with $17.2B sales and higher margins but shares fell. |
Recent earnings releases have mostly led to positive stock reactions, with one notable selloff on tariff-driven guidance pressure.
Over the last five earnings cycles, Grainger has consistently grown sales and maintained double‑digit EPS, while managing tariff and mix headwinds. Prior updates included Q2 2025 guidance cuts tied to tariffs, a strong Q3 2025 rebound, and FY2025 EPS of $39.48 with $17.9B in sales. Today’s Q1 2026 report, with $4.7B sales, higher margins and raised 2026 guidance, continues that pattern of steady top‑line expansion and disciplined capital returns.
Historical Comparison
In the past five earnings releases, GWW moved on average -1.07%. Today’s +3.09% reaction to stronger Q1 2026 results and raised guidance is modestly more positive than typical.
Earnings releases over 2024–2026 show steady sales growth, margin expansion versus prior years, and a shift from tariff‑pressured guidance in 2025 to raised 2026 EPS and sales outlook in the latest quarter.
Market Pulse Summary
This announcement reports Q1 2026 sales of $4.7B, 10.1% growth, operating margin of 16.7%, and EPS of $11.65, with higher full‑year 2026 guidance and a 10% dividend increase. Compared with earlier periods, margins and growth appear improved versus tariff-pressured 2025 quarters. Investors may watch execution against the new $19.2–$19.6B sales and $44.25–$46.25 EPS ranges, plus segment trends in High‑Touch Solutions and Endless Assortment.
Key Terms
basis points financial
non-gaap financial measures financial
forward-looking statements regulatory
deferred stock units financial
AI-generated analysis. Not financial advice.
Strong results across the business;
Company increases full year 2026 outlook
First Quarter Highlights
- Delivered sales of
$4.7 billion 10.1% , or12.2% on a daily, organic constant currency basis - Achieved operating margin of
16.7% , up 110 basis points - Generated diluted EPS of
$11.65 18.2% - Produced
$739 million $345 million - Announced quarterly dividend increase of
10% - Increasing full year 2026 guidance, including diluted adjusted EPS range of
$44.25 $46.25
"We delivered great results in the first quarter driven by strong execution across both segments," said D.G. Macpherson, Chairman and CEO. "Despite ongoing uncertainty with tariffs and the broader geopolitical climate, we're seeing positive signs with the demand environment and are increasing our 2026 guidance to reflect the strong start and continued momentum."
2026 First Quarter Financial Summary
($ in millions, except per share amounts) | Q1 2026(1) | Q1 2025(1) | Q1'26 vs. Q1'25 Fav. / (Unfav.) |
Net Sales | 10.1 % | ||
Gross Profit | 10.9 % | ||
Operating Earnings | 18.0 % | ||
Net Earnings Attributable to W.W. | 15.9 % | ||
Diluted Earnings Per Share | 18.2 % | ||
Gross Profit Margin | 40.0 % | 39.7 % | 30 bps |
Operating Margin | 16.7 % | 15.6 % | 110 bps |
Effective Tax Rate | 25.1 % | 23.9 % | (120) bps |
(1) Results are consistent on a reported and adjusted basis. | |||
Revenue
Sales in the quarter increased
In the High-Touch Solutions - N.A. segment, sales were up
Gross Profit Margin
Gross profit margin was
In the High-Touch Solutions - N.A. segment, gross profit margin was
Earnings
For the first quarter of 2026, total Company operating earnings were
Diluted earnings per share for the first quarter of 2026 were
Tax Rate
For the first quarter of 2026, the effective tax rate was
Cash Flow
During the first quarter of 2026, the Company generated
Guidance
The Company is updating the following guidance ranges for 2026:
Total Company(1) | Previous 2026 Guidance Range (as of February 3, 2026) | Updated 2026 Guidance Range (as of May 7, 2026) |
Net Sales | ||
Sales growth | ||
Daily, organic constant currency sales growth | ||
Gross Profit Margin | ||
Operating Margin | ||
Diluted Earnings per Share | ||
Operating Cash Flow | ||
CapEx (cash basis) | ||
Share Buyback | ||
Effective Tax Rate | ~ | ~ |
Segment Operating Margin | ||
High-Touch Solutions - N.A. | ||
Endless Assortment |
(1) Guidance provided is on an adjusted basis. Daily, organic constant currency sales growth is adjusted for the impact of certain divested or closed businesses in the comparable prior year period post date of divestiture or closure and changes in foreign currency exchange. The Company does not reconcile forward-looking non-GAAP financial measures. For further details see the supplemental information of this release. |
Webcast
The Company will conduct a live conference call and webcast at 11:00 a.m. ET on Thursday, May 7, 2026, to discuss the first quarter results. The event will be hosted by D.G. Macpherson, Chairman and CEO, and Deidra Merriwether, Senior Vice President and CFO, and can be accessed at invest.grainger.com. To access the conference call via phone, please send a request to InvestorRelations@grainger.com. For those unable to participate in the live event, a webcast replay will be available for 90 days at invest.grainger.com.
About Grainger
W.W. Grainger, Inc., is a leading broad line distributor with operations primarily in
Visit invest.grainger.com to view information about the Company, including a supplement regarding 2026 first quarter results and additional Company information.
Safe Harbor Statement
All statements in this communication, other than those relating to historical facts, are "forward-looking statements" under the federal securities laws. Forward-looking statements can generally be identified by their use of terms such as "anticipate," "estimate," "believe," "expect," "could," "forecast," "may," "intend," "plan," "predict," "project," "will," or "would," and similar terms and phrases, including references to assumptions. Grainger cannot guarantee that any forward-looking statement will be realized and achievement of future results is subject to risks and uncertainties, many of which are beyond Grainger's control, which could cause Grainger's results to differ materially from those that are presented. Forward-looking statements include, but are not limited to, statements about future strategic plans and future financial and operating results. Important factors that could cause actual results to differ materially from those presented or implied in the forward-looking statements include, without limitation: inflation, higher product costs or other expenses, including operational and administrative expenses; a major loss of customers; loss or disruption of sources of supply; changes in customer or product mix; increased competitive pricing pressures; changes in third-party practices regarding digital advertising; failure to enter into or sustain contractual arrangements on a satisfactory basis with group purchasing organizations; failure to develop, manage or implement new technology initiatives or business strategies including with respect to Grainger's eCommerce platforms and artificial intelligence; failure to adequately protect intellectual property or successfully defend against infringement claims; fluctuations or declines in Grainger's gross profit margin; Grainger's responses to market pressures; the outcome of pending and future litigation or governmental or regulatory proceedings, including with respect to wage and hour, anti-bribery and corruption, environmental, regulations related to advertising, marketing and the internet, consumer protection, pricing (including disaster or emergency declaration pricing statutes), product liability, compliance or safety, trade and export compliance, general commercial disputes, or privacy and cybersecurity matters; investigations, inquiries, audits and changes in laws and regulations; failure to comply with laws, regulations and standards, including new or stricter environmental laws or regulations; government contract matters, including new or revised provisions relating to contract compliance or performance; the impact of any government shutdown; disruption or breaches of information technology or data security systems involving Grainger or third parties on which Grainger depends; general industry, economic, market or political conditions; general global economic conditions, including existing, new, or increased tariffs, trade issues and changes in trade policies, inflation, and interest rates; currency exchange rate fluctuations; market volatility, including price and trading volume volatility or price declines of Grainger's common stock; an incident that adversely impacts Grainger's reputation or brand; commodity price volatility; facilities disruptions or shutdowns; higher fuel costs or disruptions in transportation services; effects of outbreaks of pandemic disease or viral contagions, global conflicts, natural or human induced disasters, extreme weather, and other catastrophes or conditions; effects of climate change; failure to execute on our corporate responsibility efforts; competition for, or failure to attract, retain, train, motivate and develop executives and key team members; loss of key members of management or key team members; loss of operational flexibility and potential for work stoppages or slowdowns if team members unionize or join a collective bargaining arrangement; changes in effective tax rates; changes in credit ratings or outlook; Grainger's incurrence of indebtedness or failure to comply with restrictions and obligations under its debt agreements and instruments and other factors that can be found in our filings with the Securities and Exchange Commission, including our most recent periodic reports filed on Form 10-K and Form 10-Q, which are available on our Investor Relations website. Forward-looking statements are given only as of the date of this communication and we disclaim any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
W.W. Grainger, Inc. and Subsidiaries | |||
Three Months Ended March 31, | |||
2026 | 2025 | ||
Net sales | $ 4,742 | $ 4,306 | |
Cost of goods sold | 2,846 | 2,596 | |
Gross profit | 1,896 | 1,710 | |
Selling, general and administrative expenses | 1,103 | 1,038 | |
Operating earnings | 793 | 672 | |
Other (income) expense: | |||
Interest expense – net | 21 | 21 | |
Other – net | (3) | (6) | |
Total other expense – net | 18 | 15 | |
Earnings before income taxes | 775 | 657 | |
Income tax provision | 194 | 157 | |
Net earnings | 581 | 500 | |
Less net earnings attributable to noncontrolling interest | 26 | 21 | |
Net earnings attributable to W.W. Grainger, Inc. | $ 555 | $ 479 | |
Earnings per share: | |||
Basic | $ 11.67 | $ 9.88 | |
Diluted | $ 11.65 | $ 9.86 | |
Weighted average number of shares outstanding: | |||
Basic | 47.3 | 48.2 | |
Diluted | 47.4 | 48.3 | |
W.W. Grainger, Inc. and Subsidiaries | |||
As of | |||
(Unaudited) | |||
Assets | March 31, 2026 | December 31, 2025 | |
Current assets | |||
Cash and cash equivalents | $ 695 | $ 585 | |
Accounts receivable (less allowance for credit | 2,627 | 2,329 | |
Inventories – net | 2,385 | 2,394 | |
Prepaid expenses and other current assets | 200 | 176 | |
Total current assets | 5,907 | 5,484 | |
Property, buildings and equipment – net | 2,359 | 2,268 | |
Goodwill | 358 | 360 | |
Intangibles – net | 268 | 265 | |
Operating lease right-of-use | 342 | 345 | |
Other assets | 239 | 240 | |
Total assets | $ 9,473 | $ 8,962 | |
Liabilities and Shareholders' Equity | |||
Current liabilities | |||
Current maturities | $ 2 | $ 126 | |
Trade accounts payable | 1,220 | 963 | |
Accrued compensation and benefits | 285 | 343 | |
Operating lease liability | 71 | 73 | |
Accrued expenses | 423 | 386 | |
Income taxes payable | 198 | 49 | |
Total current liabilities | 2,199 | 1,940 | |
Long-term debt | 2,409 | 2,362 | |
Long-term operating lease liability | 299 | 301 | |
Deferred income taxes and tax uncertainties | 128 | 121 | |
Other non-current liabilities | 95 | 97 | |
Shareholders' equity | 4,343 | 4,141 | |
Total liabilities and shareholders' equity | $ 9,473 | $ 8,962 | |
W.W. Grainger, Inc. and Subsidiaries | |||
Three Months Ended March 31, | |||
2026 | 2025 | ||
Cash flows from operating activities: | |||
Net earnings | $ 581 | $ 500 | |
Adjustments to reconcile net earnings to net cash provided by | |||
Provision for credit losses | 6 | 7 | |
Deferred income taxes and tax uncertainties | 8 | (4) | |
Depreciation and amortization | 62 | 61 | |
Non-cash lease expense | 20 | 20 | |
Stock-based compensation | 14 | 12 | |
Change in operating assets and liabilities: | |||
Accounts receivable | (303) | (128) | |
Inventories | 5 | 6 | |
Prepaid expenses and other assets | (50) | (19) | |
Trade accounts payable | 253 | 154 | |
Operating lease liabilities | (24) | (25) | |
Accrued liabilities | (5) | (42) | |
Income taxes – net | 173 | 106 | |
Other non-current liabilities | (1) | (2) | |
Net cash provided by operating activities | 739 | 646 | |
Cash flows from investing activities: | |||
Capital expenditures | (170) | (125) | |
Other – net | (8) | — | |
Net cash used in investing activities | (178) | (125) | |
Cash flows from financing activities: | |||
Short-term borrowings (repayments), original maturities of 90 days | (125) | — | |
Proceeds from debt | 50 | 1 | |
Payments of debt | (1) | (502) | |
Proceeds from stock options exercised | 6 | 2 | |
Payments for employee taxes withheld from stock awards | (5) | (3) | |
Purchases of treasury stock | (237) | (281) | |
Purchases of noncontrolling interests | (25) | — | |
Cash dividends paid | (108) | (115) | |
Other – net | (1) | — | |
Net cash used in financing activities | (446) | (898) | |
Exchange rate effect on cash and cash equivalents | (5) | 7 | |
Net change in cash and cash equivalents | 110 | (370) | |
Cash and cash equivalents at beginning of period | 585 | 1,036 | |
Cash and cash equivalents at end of period | $ 695 | $ 666 | |
SUPPLEMENTAL INFORMATION - RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES (Unaudited)
The Company supplements the reporting of financial information determined under
Basis of presentation
The Company has a controlling ownership interest in MonotaRO, which is part of the Endless Assortment segment. MonotaRO's results are fully consolidated, reflected in
Adjusted gross profit, adjusted SG&A, adjusted operating earnings, adjusted operating margin, adjusted net earnings, adjusted diluted EPS
Exclude certain non-recurring items, like restructuring charges, asset impairments, gains and losses associated with business divestitures or closures and other non-recurring, infrequent or unusual gains and losses (together referred to as "non-GAAP adjustments"), from the Company's most directly comparable reported
Free cash flow (FCF)
Calculated using total cash provided by operating activities less capital expenditures. The Company believes the presentation of FCF allows investors to evaluate the capacity of the Company's operations to generate free cash flow.
Daily sales
Refers to sales for the period divided by the number of
Daily, constant currency sales
Refers to daily sales adjusted for changes in foreign currency exchange rates.
Daily, organic constant currency sales
Refers to daily sales excluding the sales of certain divested or closed businesses in the comparable prior year period post date of divestiture or closure and changes in foreign currency exchange rates.
Foreign currency exchange
Calculated by dividing current period local currency daily sales by current period average exchange rate and subtracting the current period local currency daily sales divided by the prior period average exchange rate.
2025: Q1-63, Q2-64, Q3-64, Q4-64, FY-255
2026: Q1-63, Q2-64, Q3-64, Q4-64, FY-255
2027: Q1-63, Q2-64, Q3-64, Q4-63, FY-254
As non-GAAP financial measures are not standardized, it may not be possible to compare these measures with other companies' non-GAAP measures having the same or similar names. These non-GAAP measures should not be considered in isolation or as a substitute for reported results. These non-GAAP measures reflect an additional way of viewing aspects of operations that, when viewed with GAAP results, provide a more complete understanding of the business. This press release also includes certain non-GAAP forward-looking information. The Company believes that a quantitative reconciliation of such forward-looking information to the most comparable financial measure calculated and presented in accordance with GAAP cannot be made available without unreasonable efforts. A reconciliation of these non-GAAP financial measures would require the Company to predict the timing and likelihood of future restructurings, asset impairments, and other charges. Neither of these forward-looking measures, nor their probable significance, can be quantified with a reasonable degree of accuracy. Accordingly, a reconciliation of the most directly comparable forward-looking GAAP measures is not provided.
The reconciliations provided below reconcile GAAP financial measures to non-GAAP financial measures used in this release: daily sales; daily, organic constant currency sales; and free cash flow.
Sales growth for the three months ended March 31, 2026 | |||
Q1 2026 | |||
Total Company | High-Touch Solutions - N.A. | Endless Assortment | |
Reported sales | 10.1 % | 10.5 % | 19.6 % |
Daily impact | — % | — % | — % |
Daily sales(1) | 10.1 % | 10.5 % | 19.6 % |
Foreign currency exchange(2) | (0.2) % | (0.5) % | 0.9 % |
Business divestiture(3) | 2.3 % | — % | 1.4 % |
Daily, organic constant currency sales | 12.2 % | 10.0 % | 21.9 % |
(1) Based on | |||
(2) Excludes the impact of year-over-year foreign currency exchange rate fluctuations | |||
(3) Excludes the net sales results of the divested Cromwell business and closed Zoro | |||
Free cash flow (FCF) for the three months ended March 31, 2026 | |
Q1 2026 | |
Net cash flows provided by operating activities | $ 739 |
Capital expenditures | (170) |
Free cash flow | $ 569 |
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SOURCE W.W. Grainger, Inc.