W.W. Grainger raises 2026 adjusted EPS outlook to $47–$48
The updated 2026 outlook sets adjusted diluted EPS at $47.00 to $48.00 and operating cash flow at $2.35 billion to $2.45 billion.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
W.W. Grainger, Inc. reported third-quarter 2026 sales of $5.181 billion, up 11.3% year over year, and diluted EPS of $12.42 on a reported basis and $12.54 on an adjusted basis; adjusted EPS rose 22.8%. Reported operating earnings were $828 million, up 62.0%, while adjusted operating earnings were $836 million, up 18.2%. Reported and adjusted operating margins were 16.0% and 16.1%, respectively. Gross profit margin was 38.8%, 20 basis points above the prior-year quarter; High-Touch Solutions–N.A. sales grew 13.8%, and Endless Assortment sales grew 11.9%.
Sales increased 14.9% on a daily, organic constant currency basis. Adjusted results exclude $8 million of current-quarter technology-asset acquisition transaction costs; the prior-year adjusted comparison excludes a $196 million loss related to the U.K. exit. Grainger generated $661 million in operating cash flow, spent $115 million on capital expenditures and reported $546 million of free cash flow, while returning $396 million through dividends and share repurchases.
Grainger raised 2026 net sales guidance from $19.4 billion to $19.7 billion to $19.8 billion to $20.0 billion and adjusted diluted EPS guidance from $45.50 to $47.25 to $47.00 to $48.00. Updated operating cash flow guidance is $2.35 billion to $2.45 billion.
3 points · 1 major0 major · 0 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Major point. Forward-looking: it has not happened yet and may not happen.2026 adjusted diluted EPS guidance increased to $47.00–$48.00.
- Moderate pointQ3 2026 sales rose 11.3% to $5.181 billion.
- Moderate pointAdjusted diluted EPS rose 22.8% to $12.54.
Negative
- None.
Filing Explained
Grainger’s updated 2026 share-buyback guidance is
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Net sales: $5.181 billion
Reported operating earnings: $828 million
Adjusted operating earnings: $836 million
+5 more
8 metrics
Net sales
$5.181 billion
Third quarter 2026; up 11.3% year over year
Reported operating earnings
$828 million
Third quarter 2026; up 62.0% year over year
Adjusted operating earnings
$836 million
Third quarter 2026; up 18.2% year over year
Reported diluted EPS
$12.42
Third quarter 2026; up 102.9% year over year
Adjusted diluted EPS
$12.54
Third quarter 2026; up 22.8% year over year
Operating cash flow
$661 million
Third quarter 2026
Free cash flow
$546 million
Third quarter 2026
Adjusted diluted EPS guidance
$47.00 to $48.00
Updated 2026 range; previous range was $45.50 to $47.25
Key Terms
Daily, organic constant currency sales, Adjusted diluted EPS, Free cash flow (FCF), U.S. selling days, +1 more
5 terms
Daily, organic constant currency sales financial
"Daily, organic constant currency sales refers to daily sales"
Adjusted diluted EPS financial
"adjusted diluted EPS was $12.54, up 22.8%"
Adjusted diluted EPS is a company’s profit per share after adding back or removing one-time items (like restructuring costs or gains) and dividing by the number of shares including potential shares from options and convertible securities. Investors use it as a cleaner view of ongoing earnings—like looking at a car’s regular fuel efficiency rather than a trip boosted by downhill coasting—to judge underlying performance and compare companies without temporary distortions.
Free cash flow (FCF) financial
"Free cash flow (FCF)"
Free cash flow (FCF) is the cash a company generates from its regular business after paying for necessary investments like equipment, buildings, or repairs—think of it as the money left in your wallet after paying bills and fixing the car. Investors watch FCF because it shows how much real, spendable cash a company has to pay dividends, pay down debt, buy back shares, or fund growth, making it a key measure of financial health and flexibility.
U.S. selling days financial
"sales for the period divided by the number of U.S. selling days"
non-GAAP adjustments financial
"non-GAAP adjustments provide meaningful information"
Earnings Snapshot
Net sales: $5.181 billion · Guidance included
Third quarter ended September 30, 2026
Net sales
$5.181 billion
+11.3% year over year
Reported operating earnings
$828 million
+62.0% year over year
Adjusted operating earnings
$836 million
+18.2% year over year
Reported diluted EPS
$12.42
+102.9% year over year
Adjusted diluted EPS
$12.54
+22.8% year over year
Guidance
Updated 2026 adjusted diluted EPS range: $47.00 to $48.00.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How did GWW perform in Q3 2026?
GWW reported sales of $5.181 billion, up 11.3% year over year, and diluted EPS of $12.42 on a reported basis and $12.54 on an adjusted basis. Adjusted diluted EPS increased 22.8%, while daily, organic constant currency sales rose 14.9%.
What is GWW's updated 2026 earnings outlook?
GWW's 2026 net sales range is now $19.8 billion to $20.0 billion, compared with $19.4 billion to $19.7 billion previously. Its adjusted diluted EPS range is $47.00 to $48.00, versus $45.50 to $47.25 previously; operating cash flow guidance is $2.35 billion to $2.45 billion.
What does GWW's daily, organic constant currency sales growth measure?
The 14.9% measure reflects daily sales, excluding sales of certain businesses divested or closed in the comparable prior-year period after their divestiture or closure, and changes in foreign currency exchange rates.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission file number) | (I.R.S. Employer Identification No.) | ||||||||||||||||||||||||
| (Zip Code) | ||||||||||||||||||||||||||
| (Address of principal executive offices) | ||||||||||||||||||||||||||
Registrant’s telephone number, including area code: (847 ) 535-1000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On November 4, 2026, W.W. Grainger, Inc. issued a press release announcing its financial results for the third quarter ended September 30, 2026. A copy is furnished as Exhibit 99.1 to this report.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. | Description of Exhibit | ||||
99.1 | Press release announcing financial results for the third quarter ended September 30, 2026. | ||||
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL Document) | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 4, 2026
W.W. GRAINGER, INC. | ||||||||
| By: | /s/ Laurie R. Thomson | |||||||
| Name: | Laurie R. Thomson | |||||||
| Title: | Interim Chief Financial Officer, Vice President, and Controller | |||||||
GRAINGER REPORTS RESULTS FOR THE THIRD QUARTER 2026
Continued strong results across the business;
Company increases full year 2026 earnings outlook
Third Quarter Highlights
•Delivered sales of $5.2 billion, up 11.3%, or 14.9% on a daily, organic constant currency basis
•Achieved operating margin of 16.0% on a reported basis, up 500 basis points, or 16.1% on an adjusted basis, up 90 basis points, which excludes certain non-recurring items, notably the loss related to the Company's exit of the U.K. market in the prior year period
•Generated diluted EPS of $12.42 on a reported basis, up 102.9%, or $12.54 on an adjusted basis, up 22.8%
•Produced $661 million in operating cash flow and returned $396 million to Grainger shareholders through dividends and share repurchases
•Increasing full year 2026 earnings outlook, including diluted adjusted EPS range of $47.00 to $48.00
CHICAGO, November 4, 2026 - Grainger (NYSE: GWW) today reported results for the third quarter of 2026 with sales of $5.2 billion, up 11.3%, or 14.9% on a daily, organic constant currency basis, and adjusted diluted EPS of $12.54, up 22.8% compared to the third quarter of 2025.
“The third quarter performance reflects our consistent execution and an improving demand environment,” said D.G. Macpherson, Chairman and CEO. “As customers continue to turn to us for the products and solutions they need, both our High-Touch Solutions and Endless Assortment segments delivered impressive growth. Following another quarter of strong performance, we are increasing our 2026 guidance and remain on track for an exceptional year.”
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2026 Third Quarter Financial Summary
| ($ in millions, except per share amounts) | Q3 2026 | Q3 2025 | Q3'26 vs. Q3'25 Fav. / (Unfav.) | |||||||||||||||||
| Reported | Adjusted(1) | Reported | Adjusted(2) | Reported | Adjusted | |||||||||||||||
| Net Sales | $5,181 | $5,181 | $4,657 | $4,657 | 11.3% | 11.3% | ||||||||||||||
| Gross Profit | $2,011 | $2,011 | $1,798 | $1,798 | 11.8% | 11.8% | ||||||||||||||
| Operating Earnings | $828 | $836 | $511 | $707 | 62.0% | 18.2% | ||||||||||||||
| Net Earnings Attributable to W.W. Grainger, Inc. | $587 | $593 | $294 | $490 | 99.7% | 21.0% | ||||||||||||||
| Diluted Earnings Per Share | $12.42 | $12.54 | $6.12 | $10.21 | 102.9% | 22.8% | ||||||||||||||
| Gross Profit Margin | 38.8% | 38.8% | 38.6% | 38.6% | 20 bps | 20 bps | ||||||||||||||
| Operating Margin | 16.0% | 16.1% | 11.0% | 15.2% | 500 bps | 90 bps | ||||||||||||||
| Effective Tax Rate | 24.3% | 24.3% | 34.7% | 24.8% | 1,040 bps | 50 bps | ||||||||||||||
(1) Reflects transaction costs associated with the acquisition of technology assets from Adroit Worldwide Media, Inc. in the third quarter of 2026. | ||||||||||||||||||||
(2) Reflects the loss from the Company's exit of the U.K. market, including the sale of the Cromwell business and closure of Zoro U.K., announced in the third quarter of 2025 and completed in the fourth quarter of 2025. | ||||||||||||||||||||
See the supplemental information of this release for further information regarding the Company's non-GAAP measures including reconciliations to the most directly comparable GAAP measure. | ||||||||||||||||||||
Revenue
Sales in the quarter increased 11.3% compared to the third quarter of 2025. When normalizing for the Company's exit from the U.K. market and the impact of foreign currency exchange, sales on a daily, organic constant currency basis increased 14.9% compared to the third quarter of 2025.
In the High-Touch Solutions - N.A. segment, sales were up 13.8% on both a reported and daily, constant currency basis compared to the third quarter of 2025. Results for the segment were driven by double-digit volume growth and continued price inflation as cost increases were passed. In the Endless Assortment segment, sales were up 11.9% compared to the third quarter of 2025, or up 19.3% on a daily, organic constant currency basis. Growth for the segment was driven by strong performance at both MonotaRO and Zoro.
Gross Profit Margin
Gross profit margin was 38.8% in the third quarter of 2026, up 20 basis points compared to the third quarter of 2025, driven by expansion across the Endless Assortment segment and a benefit related to the Company's exit from the U.K. market.
In the High-Touch Solutions - N.A. segment, gross profit margin was 40.8%, down 30 basis points compared to the prior year quarter due to unfavorable freight expense and mix. In the
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Endless Assortment segment, gross profit margin increased by 90 basis points from the third quarter of 2025 due to improvement at both MonotaRO and Zoro.
Earnings
For the third quarter of 2026, total Company reported operating earnings were $828 million, up 62.0% compared to the third quarter of 2025. Operating margin was 16.0%, a 500 basis point increase compared to the third quarter of 2025. On an adjusted basis, operating earnings were $836 million, up 18.2% compared to the third quarter of 2025. Adjusted operating margin was 16.1%, a 90 basis point increase compared to the third quarter of 2025. This increase in adjusted operating margin was driven by sales leverage in both segments and a benefit related to the Company's exit from the U.K. market. These adjusted results for the quarter exclude transaction costs associated with the acquisition of technology assets in the current year period and the loss related to the Company's exit of the U.K. market, including the sale of the Cromwell business and closure of Zoro U.K., in the prior year period.
Diluted earnings per share for the third quarter of 2026 were $12.42 on a reported basis, up 102.9% compared to the third quarter of 2025. On an adjusted basis, diluted EPS was $12.54, up 22.8% compared to the third quarter of 2025. The increase was due primarily to strong operating performance, fewer shares outstanding, and a lower effective tax rate.
Tax Rate
For the third quarter of 2026, the effective tax rate was 24.3%, compared to 34.7% in the third quarter of 2025. On an adjusted basis, the effective tax rate was 24.3% compared to 24.8% in the prior year period. The variance for the adjusted tax rate was primarily due to additional tax credit benefits recorded in the third quarter of 2026.
Cash Flow
During the third quarter of 2026, the Company generated $661 million of cash flow from operating activities driven by strong net earnings. The Company invested $115 million in capital expenditures, resulting in free cash flow of $546 million. During the quarter, the Company returned $396 million to Grainger shareholders through dividends and share repurchases.
3
Guidance
The Company is updating the following guidance ranges for 2026:
Total Company(1) | Previous 2026 Guidance Range (as of August 4, 2026) | Updated 2026 Guidance Range (as of November 4, 2026) | ||||||
| Net Sales | $19.4 - $19.7 billion | $19.8 - $20.0 billion | ||||||
| Sales growth | 8.4% - 10.0% | 10.1% - 11.6% | ||||||
| Daily, organic constant currency sales growth | 11.5% - 13.0% | 13.0% - 14.5% | ||||||
| Gross Profit Margin | 39.3% - 39.6% | 39.4% - 39.6% | ||||||
| vs Prior Year | 20 bps to 50 bps | 30 bps to 45 bps | ||||||
| Operating Margin | 15.8% - 16.2% | 16.0% - 16.2% | ||||||
| vs Prior Year | 80 bps to 120 bps | 100 bps to 120 bps | ||||||
| Diluted Earnings per Share | $45.50 - $47.25 | $47.00 - $48.00 | ||||||
| Operating Cash Flow | $2.25 - $2.4 billion | $2.35 - $2.45 billion | ||||||
| CapEx (cash basis) | $0.575 - $0.65 billion | $0.575 - $0.625 billion | ||||||
| Share Buyback | $0.975 - $1.05 billion | $0.975 - $1.025 billion | ||||||
| Effective Tax Rate | ~25.0% | ~24.7% | ||||||
| Segment Operating Margin | ||||||||
| High-Touch Solutions - N.A. | 17.2% - 17.6% | 17.3% - 17.5% | ||||||
| Endless Assortment | 10.4% - 10.8% | 10.9% - 11.1% | ||||||
(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 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. 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 Wednesday, November 4, 2026, to discuss the third quarter results. The event will be hosted by D.G. Macpherson, Chairman and CEO, and Laurie Thomson, Vice President and Interim 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 North America and Japan. At Grainger, We Keep the World Working® by serving more than 4.6 million customers worldwide with maintenance, repair and operating (MRO) products and value-added solutions delivered through innovative technology and deep customer expertise. Known for its commitment to service and purpose-driven culture, the Company reported 2025 revenue of $17.9 billion. For more information, visit www.grainger.com.
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Visit invest.grainger.com to view information about the Company, including a supplement regarding 2026 third 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, acquisitions or business strategies including with respect to Grainger's eCommerce platforms and artificial intelligence; failure to adequately protect our 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.
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Contacts:
| Media: | Investors: | ||||||||||
| Erin Ptacek | Kyle Bland | ||||||||||
| VP, Communications & Public Affairs | VP, Investor Relations | ||||||||||
| Robb Kristopher | Kevin Byrne | ||||||||||
| Director, External Affairs | Director, Investor Relations | ||||||||||
| Media_Inquiries@grainger.com | InvestorRelations@grainger.com | ||||||||||
6
W.W. Grainger, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In millions of dollars, except for share and per share amounts)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net sales | $ | 5,181 | $ | 4,657 | $ | 14,944 | $ | 13,517 | |||||||||||||||
| Cost of goods sold | 3,170 | 2,859 | 9,053 | 8,254 | |||||||||||||||||||
| Gross profit | 2,011 | 1,798 | 5,891 | 5,263 | |||||||||||||||||||
| Selling, general and administrative expenses | 1,183 | 1,287 | 3,463 | 3,402 | |||||||||||||||||||
| Operating earnings | 828 | 511 | 2,428 | 1,861 | |||||||||||||||||||
| Other (income) expense: | |||||||||||||||||||||||
| Interest expense – net | 21 | 20 | 62 | 61 | |||||||||||||||||||
Other – net | (7) | (1) | (21) | (10) | |||||||||||||||||||
| Total other expense – net | 14 | 19 | 41 | 51 | |||||||||||||||||||
| Earnings before income taxes | 814 | 492 | 2,387 | 1,810 | |||||||||||||||||||
| Income tax provision | 198 | 171 | 590 | 481 | |||||||||||||||||||
| Net earnings | 616 | 321 | 1,797 | 1,329 | |||||||||||||||||||
| Less net earnings attributable to noncontrolling interest | 29 | 27 | 85 | 74 | |||||||||||||||||||
| Net earnings attributable to W.W. Grainger, Inc. | $ | 587 | $ | 294 | $ | 1,712 | $ | 1,255 | |||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic | $ | 12.43 | $ | 6.13 | $ | 36.12 | $ | 26.02 | |||||||||||||||
| Diluted | $ | 12.42 | $ | 6.12 | $ | 36.08 | $ | 25.97 | |||||||||||||||
| Weighted average number of shares outstanding: | |||||||||||||||||||||||
Basic | 47.0 | 47.8 | 47.2 | 48.0 | |||||||||||||||||||
Diluted | 47.1 | 47.9 | 47.2 | 48.1 | |||||||||||||||||||
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W.W. Grainger, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions of dollars)
(Unaudited)
| As of | |||||||||||
| (Unaudited) | |||||||||||
| Assets | September 30, 2026 | December 31, 2025 | |||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 768 | $ | 585 | |||||||
Accounts receivable (less allowance for credit losses of $31 and $32, respectively) | 2,877 | 2,329 | |||||||||
| Inventories – net | 2,303 | 2,394 | |||||||||
| Prepaid expenses and other current assets | 255 | 176 | |||||||||
| Total current assets | 6,203 | 5,484 | |||||||||
| Property, buildings and equipment – net | 2,488 | 2,268 | |||||||||
| Goodwill | 521 | 360 | |||||||||
| Intangibles – net | 327 | 265 | |||||||||
| Operating lease right-of-use | 354 | 345 | |||||||||
| Other assets | 235 | 240 | |||||||||
| Total assets | $ | 10,128 | $ | 8,962 | |||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Current liabilities | |||||||||||
| Current maturities | $ | 227 | $ | 126 | |||||||
| Trade accounts payable | 1,184 | 963 | |||||||||
| Accrued compensation and benefits | 412 | 343 | |||||||||
| Operating lease liability | 73 | 73 | |||||||||
| Accrued expenses | 447 | 386 | |||||||||
| Income taxes payable | 33 | 49 | |||||||||
| Total current liabilities | 2,376 | 1,940 | |||||||||
| Long-term debt | 2,458 | 2,362 | |||||||||
| Long-term operating lease liability | 310 | 301 | |||||||||
| Deferred income taxes and tax uncertainties | 151 | 121 | |||||||||
| Other non-current liabilities | 95 | 97 | |||||||||
| Shareholders' equity | 4,738 | 4,141 | |||||||||
| Total liabilities and shareholders’ equity | $ | 10,128 | $ | 8,962 | |||||||
8
W.W. Grainger, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of dollars)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||||||||
| Net earnings | $ | 616 | $ | 321 | $ | 1,797 | $ | 1,329 | |||||||||||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||||||||||||||
| Provision for credit losses | 6 | 7 | 19 | 20 | |||||||||||||||||||
| Deferred income taxes and tax uncertainties | 2 | 36 | 33 | 37 | |||||||||||||||||||
| Depreciation and amortization | 67 | 65 | 195 | 190 | |||||||||||||||||||
| Non-cash lease expense | 19 | 21 | 59 | 62 | |||||||||||||||||||
| Impairment loss and net losses from business divestitures | — | 196 | — | 196 | |||||||||||||||||||
| Stock-based compensation | 19 | 14 | 58 | 49 | |||||||||||||||||||
| Change in operating assets and liabilities: | |||||||||||||||||||||||
| Accounts receivable | (47) | (40) | (557) | (252) | |||||||||||||||||||
| Inventories | 72 | (8) | 86 | (27) | |||||||||||||||||||
| Prepaid expenses and other assets | (40) | 1 | (72) | (32) | |||||||||||||||||||
| Trade accounts payable | (138) | (46) | 174 | 185 | |||||||||||||||||||
| Operating lease liabilities | (24) | (26) | (72) | (79) | |||||||||||||||||||
| Accrued liabilities | 127 | 64 | 148 | 4 | |||||||||||||||||||
| Income taxes – net | (16) | (5) | (20) | (42) | |||||||||||||||||||
| Other non-current liabilities | (2) | (3) | (4) | (20) | |||||||||||||||||||
| Net cash provided by operating activities | 661 | 597 | 1,844 | 1,620 | |||||||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||||||||
| Capital expenditures | (115) | (258) | (396) | (558) | |||||||||||||||||||
| Proceeds from sale of assets | — | — | — | 4 | |||||||||||||||||||
| Cash paid for business acquisition | (215) | — | (215) | — | |||||||||||||||||||
| Other – net | (4) | (2) | (17) | 11 | |||||||||||||||||||
| Net cash used in investing activities | (334) | (260) | (628) | (543) | |||||||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||||||||
| Short-term borrowings (repayments), original maturities of 90 days or less, net | 225 | — | 100 | — | |||||||||||||||||||
| Proceeds from debt | 50 | 27 | 102 | 90 | |||||||||||||||||||
| Payments of debt | (3) | — | (7) | (503) | |||||||||||||||||||
| Proceeds from stock options exercised | 1 | — | 9 | 2 | |||||||||||||||||||
| Payments for employee taxes withheld from stock awards | (2) | (1) | (32) | (31) | |||||||||||||||||||
| Purchases of treasury stock | (278) | (291) | (739) | (798) | |||||||||||||||||||
| Purchases of noncontrolling interests | (1) | — | (71) | — | |||||||||||||||||||
| Cash dividends paid | (145) | (133) | (398) | (358) | |||||||||||||||||||
| Other – net | — | — | 9 | (1) | |||||||||||||||||||
| Net cash used in financing activities | (153) | (398) | (1,027) | (1,599) | |||||||||||||||||||
| Exchange rate effect on cash and cash equivalents | 5 | (1) | (6) | 21 | |||||||||||||||||||
| Net change in cash and cash equivalents | 179 | (62) | 183 | (501) | |||||||||||||||||||
| Cash and cash equivalents at beginning of period | 589 | 597 | 585 | 1,036 | |||||||||||||||||||
| Cash and cash equivalents at end of period | $ | 768 | $ | 535 | $ | 768 | $ | 535 | |||||||||||||||
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SUPPLEMENTAL INFORMATION - RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES (Unaudited)
The Company supplements the reporting of financial information determined under U.S. generally accepted accounting principles (GAAP) with the non-GAAP financial measures as defined below. The Company believes these non-GAAP financial measures provide meaningful information to assist investors in understanding financial results and assessing future performance as they provide a better baseline for analyzing the ongoing performance of its business by excluding items that may not be indicative of core operating results.
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 U.S. GAAP, and reported one-month in arrears. Results will differ from MonotaRO’s externally reported financials which follow Japanese GAAP.
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 U.S. GAAP figures (reported gross profit, SG&A, operating earnings, net earnings and EPS). The Company believes these non-GAAP adjustments provide meaningful information to assist investors in understanding financial results and assessing future performance as they provide a better baseline for analyzing the ongoing performance of its business by excluding items that may not be indicative of core operating results.
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 U.S. selling days for the period.
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.
U.S. selling days:
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.
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Sales growth for the three months ended September 30, 2026
(percent change compared to prior year period)
(unaudited)
| Q3 2026 | |||||||||||
| Total Company | High-Touch Solutions - N.A. | Endless Assortment | |||||||||
| Reported sales | 11.3% | 13.8% | 11.9% | ||||||||
| Daily impact | —% | —% | —% | ||||||||
Daily sales(1) | 11.3% | 13.8% | 11.9% | ||||||||
Foreign currency exchange(2) | 1.2% | —% | 6.2% | ||||||||
Business divestiture(3) | 2.4% | —% | 1.2% | ||||||||
| Daily, organic constant currency sales | 14.9% | 13.8% | 19.3% | ||||||||
(1) Based on U.S. selling days, there were 64 selling days in Q3 2026 and Q3 2025. | |||||||||||
(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 U.K. business, announced in the third quarter of 2025 and completed in the fourth quarter of 2025, in the prior year period on a daily basis. | |||||||||||
Free cash flow (FCF) for the three months ended September 30, 2026
(in millions of dollars)
(unaudited)
| Q3 2026 | |||||
| Net cash flows provided by operating activities | $ | 661 | |||
| Capital expenditures | (115) | ||||
| Free cash flow | $ | 546 | |||
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Income statement adjustments for the three months ended September 30, 2026 and 2025
(in millions of dollars)
(unaudited)
| Q3 2026 | Reported | Adjusted(3) | Reported | Adjusted | |||||||||||||||||||||||||||||||||||||
| Reported | Adjustment(1) | Adjusted | % of Net sales | Y/Y | |||||||||||||||||||||||||||||||||||||
| Earnings reconciliation: | |||||||||||||||||||||||||||||||||||||||||
| SG&A | $ | 1,183 | $ | (8) | $ | 1,175 | 22.8 | % | 22.7 | % | (8.1) | % | 7.7 | % | |||||||||||||||||||||||||||
| Operating earnings | 828 | 8 | 836 | 16.0 | 16.1 | 62.0 | 18.2 | ||||||||||||||||||||||||||||||||||
| Other expense — net | (14) | — | (14) | 0.3 | 0.2 | (26.3) | (26.3) | ||||||||||||||||||||||||||||||||||
| Earnings before income taxes | 814 | 8 | 822 | 15.7 | 15.9 | 65.4 | 19.5 | ||||||||||||||||||||||||||||||||||
Income tax provision(4) | (198) | (2) | (200) | 3.8 | 3.9 | 15.8 | 17.0 | ||||||||||||||||||||||||||||||||||
| Net earnings | 616 | 6 | 622 | 11.9 | 12.0 | 91.9 | 20.3 | ||||||||||||||||||||||||||||||||||
Noncontrolling interest(5) | (29) | — | (29) | 0.6 | 0.6 | 7.4 | 7.4 | ||||||||||||||||||||||||||||||||||
| Net earnings attributable to W.W. Grainger, Inc. | $ | 587 | $ | 6 | $ | 593 | 11.3 | % | 11.4 | % | 99.7 | % | 21.0 | % | |||||||||||||||||||||||||||
| Diluted earnings per share: | $ | 12.42 | $ | 0.12 | $ | 12.54 | 102.9 | % | 22.8 | % | |||||||||||||||||||||||||||||||
| Q3 2025 | Reported | Adjusted(3) | Reported | Adjusted | |||||||||||||||||||||||||||||||||||||
| Reported | Adjustment(2) | Adjusted | % of Net sales | Y/Y | |||||||||||||||||||||||||||||||||||||
| Earnings reconciliation: | |||||||||||||||||||||||||||||||||||||||||
| SG&A | $ | 1,287 | $ | (196) | $ | 1,091 | 27.6 | % | 23.4 | % | 24.5 | % | 5.5 | % | |||||||||||||||||||||||||||
| Operating earnings | 511 | 196 | 707 | 11.0 | 15.2 | (25.5) | 3.1 | ||||||||||||||||||||||||||||||||||
| Other expense — net | (19) | — | (19) | 0.4 | 0.4 | 26.7 | 26.7 | ||||||||||||||||||||||||||||||||||
| Earnings before income taxes | 492 | 196 | 688 | 10.6 | 14.8 | (26.7) | 2.5 | ||||||||||||||||||||||||||||||||||
| Income tax provision | (171) | — | (171) | 3.7 | 3.7 | 3.0 | 3.0 | ||||||||||||||||||||||||||||||||||
| Net earnings | 321 | 196 | 517 | 6.9 | 11.1 | (36.4) | 2.4 | ||||||||||||||||||||||||||||||||||
Noncontrolling interest(5) | (27) | — | (27) | 0.6 | 0.6 | 42.1 | 42.1 | ||||||||||||||||||||||||||||||||||
| Net earnings attributable to W.W. Grainger, Inc. | $ | 294 | $ | 196 | $ | 490 | 6.3 | % | 10.5 | % | (39.5) | % | 0.8 | % | |||||||||||||||||||||||||||
| Diluted earnings per share: | $ | 6.12 | $ | 4.09 | $ | 10.21 | (38.0) | % | 3.4 | % | |||||||||||||||||||||||||||||||
(1) Reflects transaction costs associated with the acquisition of technology assets from Adroit Worldwide Media, Inc. in the third quarter of 2026. | |||||||||||||||||||||||||||||||||||||||||
(2) Reflects the loss from the Company's exit of the U.K. market, including the sale of the Cromwell business and closure of Zoro U.K., announced in the third quarter of 2025 and completed in the fourth quarter of 2025. | |||||||||||||||||||||||||||||||||||||||||
(3) Calculated on the basis of reported net sales for the third quarter of 2026 and 2025. | |||||||||||||||||||||||||||||||||||||||||
(4) The Company's reported and adjusted effective tax rates were both 24.3% for the third quarter of 2026. | |||||||||||||||||||||||||||||||||||||||||
(5) The Company has a controlling ownership interest in MonotaRO with the residual representing noncontrolling interest. | |||||||||||||||||||||||||||||||||||||||||
12