W W Grainger (GWW) Q1 2026 earnings summary

Executive summary

• Achieved strong, profitable Q1 2026 growth with sales of $4.74 billion, up 10.1% year-over-year, and diluted EPS of $11.65, up 18.2%, with both business segments performing well amid tariff and geopolitical uncertainty.

• Operating margin improved to 16.7%, a 110 basis point increase from Q1 2025.

• Generated $739 million in operating cash flow and returned $345 million to shareholders via dividends and share repurchases.

• Announced a 10% increase in the quarterly dividend, marking 55 consecutive years of increases.

• Raised full-year 2026 guidance due to strong start and ongoing momentum.

Financial highlights

• Net sales rose to $4,742 million from $4,306 million, a 10.1% increase year-over-year.

• Gross profit margin increased 30 basis points to 40.0%; operating margin improved 110 basis points to 16.7%.

• Diluted EPS was $11.65, up 18.2% versus Q1 2025.

• Free cash flow for Q1 2026 was $569 million.

• ROIC reached 44.0%, up 320 basis points year-over-year.

Outlook and guidance

• FY 2026 sales guidance raised to $19.2–$19.6 billion (6.7%–9.1% growth; 9.5%–12.0% daily, organic constant currency).

• Adjusted EPS guidance increased to $44.25–$46.25 (12.1%–17.1% growth), nearly 15% growth at midpoint, $1.75 above prior guidance.

• Gross profit margin expected at 39.2%–39.5%; adjusted operating margin at 15.6%–16.0%.

• Q2 sales expected north of $4.9 billion, with operating margins anticipated in the low 15% range due to seasonality, fuel, and inventory cost headwinds.

• Operating cash flow guidance: $2.125–$2.325 billion; capital expenditures: $550–$650 million.