W W Grainger (GWW) Q4 2025 earnings summary

Executive summary

• Achieved 4.5% reported sales growth for 2025, reaching $17.9B in total sales, with strong execution despite macroeconomic headwinds, including tariffs and a government shutdown.

• Outperformed the U.S. MRO market by ~250 bps in High-Touch Solutions and delivered 15.6% growth in Endless Assortment segment.

• Exited the UK market, divested Cromwell, and closed Zoro UK, positively impacting margins and reported results.

• Advanced digital, AI, and machine learning initiatives, expanded product assortment, and invested in new distribution centers in the U.S. and Japan.

• Recognized as a top employer and for ethical practices, reinforcing a strong workplace culture.

Financial highlights

• FY 2025 sales reached $17.9B, up 4.5% year-over-year; operating margin was 15.0% adjusted, down 50 bps; diluted EPS was $39.48 adjusted, up 1.3%.

• Q4 2025 sales were $4.43B, up 4.5% year-over-year; Q4 diluted EPS was $9.44, down 2.8%.

• Gross margin for FY 2025 was 39.1%, down 30 bps due to segment mix and tariff headwinds.

• Operating cash flow was $2.0B; $1.5B returned to shareholders via dividends and share repurchases.

• Free cash flow for 2025 was $1.3B.

Outlook and guidance

• 2026 net sales expected at $18.7–$19.1B, with daily organic constant currency sales growth of 6.5%–9.0%.

• Operating margin guidance for 2026 is 15.4%–15.9%, with EPS expected at $42.25–$44.75, up over 10% at midpoint.

• High-Touch Solutions segment sales growth projected at 5%–7.5%; Endless Assortment segment at 12.5%–15%.

• Operating cash flow projected at $2.125–$2.325B; CapEx planned at $550M–$650M; share repurchases planned at ~$1B.

• Effective tax rate for 2026 expected at 25%, up 130 bps due to federal tax law changes.