Graco (GGG) Q1 2025 earnings summary

Executive summary

• Net sales increased 7% year-over-year to $528.3 million, with acquisitions contributing 6% and currency translation reducing sales by 2%; all segments and regions reported growth.

• Operating earnings rose 8% to $144 million, while net earnings increased 2% to $124.1 million; adjusted net earnings were $120.5 million, up 7%.

• Adjusted diluted EPS was $0.70, up 8% year-over-year; gross margin rate declined by 1.5–2 percentage points due to acquisitions and higher product costs.

• All segments—Contractor, Industrial, and Expansion Markets—reported sales growth, with notable strength in semiconductor and industrial end markets.

• Operating expense leverage offset lower gross margin, and operating margin held steady at 27%.

Financial highlights

• Net cash from operations was $125 million, up $6 million year-over-year; cash and cash equivalents at quarter-end were $536 million.

• Share repurchases totaled $238 million in Q1, with 2.8 million shares bought back; year-to-date repurchases reached 4.4 million shares for $360 million.

• Dividends paid were $47 million; capital expenditures were $11 million.

• $5 million gain recognized from the sale of a Swiss facility.

• Adjusted effective tax rate was 20.5%; effective tax rate increased to 18% from 13% year-over-year.

Outlook and guidance

• Full-year organic constant currency revenue guidance maintained at low single-digit growth.

• Tariffs and evolving trade policies with China could reduce full-year revenue by 1–2%.

• Capital expenditures expected to be $50–$60 million in 2025.

• Average diluted shares outstanding for 2025 projected at 170 million.

• Effective tax rate for 2025 anticipated between 19.5%–20.5%.