Group 1 - Graco's shares closed down 2.7% on July 23rd following the announcement of its second quarter financial results for the 2025 fiscal year [1] - The company is part of the oil and natural gas sector, which focuses on cash flow and companies that generate it, leading to potential value and growth prospects [1] Group 2 - Crude Value Insights offers an investing service and community that includes a 50+ stock model account and in-depth cash flow analyses of exploration and production firms [2] - Subscribers have access to live chat discussions about the oil and gas sector [2]

Financial Data and Key Metrics Changes - Graco reported second quarter sales of $572 million, an increase of 3% from the same quarter last year, with acquisitions contributing 6% growth while organic sales declined by 3% [5][12] - Reported net earnings decreased by 4% to $128 million, or $0.76 per diluted share, while adjusted non-GAAP net earnings were $127 million, or $0.75 per diluted share, a decrease of 3% [6] - The gross margin rate decreased by 200 basis points, with acquisitions accounting for nearly 80 basis points of the decline [6][7] - Operating expenses increased by 2%, driven by incremental expenses from acquisitions, while excluding these expenses, operating expenses declined by $7 million or 5% [7][8] - Cash provided by operations totaled $308 million for the year, an increase of $50 million or 19% [9] Business Line Data and Key Metrics Changes - The Contractor segment sales declined by 5% in the quarter, primarily due to softness in North America and reduced DIY demand [15][19] - The Industrial segment saw a decline of 1%, with growth in EMEA and Asia Pacific not enough to offset declines in The Americas [16] - Expansion markets were down 3% for the second quarter, although positive momentum in the semiconductor market continued [18] Market Data and Key Metrics Changes - The Americas market was particularly weak, contributing to the organic revenue decline, while EMEA and Asia Pacific showed growth across all segments [12][15] - The home center DIY channel faced challenges, down low double digits, but recent trends indicate stabilization [14][15] Company Strategy and Development Direction - Graco announced targeted price increases beginning in September to offset tariff impacts, focusing on key markets most affected [13] - The company is maintaining its 2025 revenue guidance of low single-digit sales growth on an organic constant currency basis, despite headwinds from the global trade environment [19] - The acquisition of ColorService is expected to enhance Graco's capabilities in precision dosing systems, broadening its portfolio [18] Management's Comments on Operating Environment and Future Outlook - Management noted that the current trade environment is uncertain, causing end users to delay project decisions [12][13] - Incoming order activity remained steady, with backlogs at normal levels across all segments, indicating potential for recovery [14][19] - Management expressed confidence in the second half of the year due to pricing actions and easier comparisons from the previous year [19] Other Important Information - Cash flow from operations less capital expenditures increased by $93 million or 51% year-to-date [10] - The adjusted effective tax rate was 20%, consistent with the expected full-year tax rate [9] Q&A Session Summary Question: Can you discuss the price increase announcement? - Management indicated that the price increases are targeted at geographies experiencing the most input cost pain, characterized as low single-digit increases [26][29] Question: What contributed to the strong free cash flow this quarter? - Management attributed the strong cash flow to improved inventory management and efficiency initiatives [30][31] Question: Can you elaborate on the ColorService acquisition? - The acquisition was driven by the desire to explore adjacent technologies and is expected to enhance Graco's growth potential [36][39] Question: What factors are necessary for customer confidence in the DIY market? - Management highlighted affordability as a key issue affecting new construction and remodeling activity [42] Question: How do you view the incremental margins for the year? - Management expects incremental margins to be in the mid to low thirties, depending on growth across different groups [96]

Financial Data and Key Metrics Changes - Graco reported second quarter sales of $572 million, an increase of 3% from the same quarter last year, with acquisitions contributing 6% growth while organic sales declined by 3% [4][12] - Net earnings decreased by 4% to $128 million or $0.76 per diluted share, while adjusted non-GAAP net earnings were $127 million or $0.75 per diluted share, a decrease of 3% [5][8] - The gross margin rate decreased by 200 basis points, with acquisitions accounting for nearly 80 basis points of the decline [5][6] - Operating expenses increased by 2%, driven by incremental expenses from acquisitions, but excluding these, operating expenses declined by $7 million or 5% [6][8] - Cash provided by operations totaled $308 million for the year, an increase of $50 million or 19% [8][9] Business Line Data and Key Metrics Changes - The Contractor segment sales declined by 5% in the quarter, primarily due to weakness in North America and reduced DIY demand [12][15] - The Industrial segment saw a 1% decline, with growth in EMEA and Asia Pacific not enough to offset declines in The Americas [16] - Expansion markets were down 3% for the second quarter, although the semiconductor market showed positive momentum [17] Market Data and Key Metrics Changes - The Americas experienced significant weakness in contractor markets, with ongoing housing affordability issues impacting new investments [12][15] - EMEA and Asia Pacific markets grew across all segments, including the semiconductor market, which had been depressed previously [12][16] - The home center DIY channel faced challenges, down low double digits, but recent run rates have stabilized [14][15] Company Strategy and Development Direction - Graco announced a targeted price increase beginning in September to offset tariff impacts, focusing on key markets most affected [13] - The company is pursuing acquisitions, including the recent acquisition of ColorService, to enhance its portfolio and expand into adjacent technologies [17][36] - Management expressed confidence in maintaining low single-digit sales growth guidance for 2025, supported by consistent incoming order rates and pricing actions [19][55] Management's Comments on Operating Environment and Future Outlook - Management noted that the current trade environment is uncertain, causing end users to delay project decisions [12][13] - There is optimism for a stronger second half of the year due to easier comparisons and the impact of pricing actions [15][19] - The company is focused on improving cash generation capacity and operational efficiencies through initiatives like One Graco [28][116] Other Important Information - Cash flow from operations less capital expenditures increased by $93 million or 51% year-to-date [9] - The adjusted effective tax rate was 20%, consistent with the expected full-year tax rate [8] - Unallocated corporate expenses are projected to be between $37 million to $40 million for the full year [10] Q&A Session Summary Question: Can you discuss the price increase announcement? - Management indicated that the price increases are targeted at geographies experiencing the most input cost pain, characterized as low single-digit increases [25] Question: What contributed to the strong free cash flow this quarter? - The strength in cash flow was attributed to improved inventory management and the One Graco initiative, which enhanced operational efficiency [26][28] Question: Can you elaborate on the ColorService acquisition? - The acquisition was driven by the desire to explore adjacent technologies and capitalize on growth opportunities in specialized dosing systems [36] Question: What factors are necessary for customers to gain more confidence in the DIY market? - Affordability is seen as the primary challenge, with management noting that a reduction in rates would significantly help the market [38] Question: How does the company view the outlook for the contractor market? - Management expressed cautious optimism, noting that the second half of the year may see improved performance due to easier comparisons and pricing actions [55][68] Question: What is the company's approach to capital allocation? - The company prioritizes investing in business growth and technology while also being opportunistic with stock repurchases and acquisitions [56][79]

Core Insights - Graco Inc.'s second-quarter 2025 adjusted earnings of 75 cents per share missed the Zacks Consensus Estimate of 78 cents, reflecting a 3% year-over-year decrease [1][9] - The company's net sales reached $571.8 million, falling short of the consensus estimate of $585 million, but showing a 3% year-over-year increase due to contributions from acquired operations and sales growth in the EMEA and Asia Pacific regions [1][9] Sales Performance - Sales from the Americas decreased by 3% year over year, while sales in Europe, the Middle East, and Africa increased by 19%, and sales from the Asia Pacific rose by 12% year over year [2] - The Contractor segment generated net sales of $289 million, accounting for 50.5% of total sales, with a 7% year-over-year increase, although organic sales declined by 5% [3][9] - The Industrial segment reported net sales of $242.2 million, contributing 42.4% to total sales, remaining relatively flat year over year, with organic sales down by 1% [4] - The Expansion Markets segment had net sales of $40.6 million, representing 7.1% of total sales, decreasing by 3% year over year, with organic sales also down by 3% [5] Margin and Income Analysis - Graco's cost of sales increased by 7.9% year over year to $272.3 million, leading to a gross profit decrease of 0.5% to $299.5 million, with a two percentage point decline in margin due to lower rates from acquired operations and higher product costs [6] - Operating income fell by 2% year over year to $157.5 million, with the operating margin decreasing by 1.7 percentage points compared to the previous year [7] Financial Position - As of the end of the second quarter, Graco had cash and cash equivalents of $534.9 million, down from $675.3 million at the end of 2024 [8] - The company generated net cash of $308.1 million from operating activities in the first half of 2025, compared to $257.9 million in the same period last year [8] - Capital expenditures for property, plant, and equipment totaled $30.2 million, significantly lower than $73.4 million in the year-ago period [8] Shareholder Returns - Graco paid dividends totaling $92.2 million to shareholders, reflecting a 7.2% increase from the previous year, and repurchased shares worth $361 million during the same period [10] Future Outlook - The company anticipates organic net sales to increase in the low single digits on a constant-currency basis for 2025 [11]

SECOND QUARTER EARNINGS CALL 2025.07.24 SAFE HARBOR Today's presentation includes forward-looking statements that reflect management's current expectations about the Company's future business and financial performance. These statements are subject to certain risks and uncertainties that could cause actual results to differ from anticipated results. Factors that could cause actual results to differ from anticipated results are identified in Item 1A of the Company's Form 10-K, and Item 1A of the most recent Q ...

Core Insights - Graco Inc. reported revenue of $571.81 million for the quarter ended June 2025, a year-over-year increase of 3.4%, but fell short of the Zacks Consensus Estimate by 2.29% [1] - The company's EPS for the same period was $0.75, down from $0.77 a year ago, resulting in an EPS surprise of -3.85% compared to the consensus estimate of $0.78 [1] Financial Performance Metrics - Net sales in Expansion Markets were $40.57 million, below the average estimate of $44.58 million [4] - Contractor net sales reached $288.96 million, slightly below the average estimate of $293.15 million, but represented a year-over-year increase of 7.2% [4] - Industrial net sales were reported at $242.28 million, compared to the average estimate of $247.27 million, with a significant year-over-year increase of 55.6% [4] - Operating earnings for the Industrial segment were $82.37 million, slightly below the average estimate of $83.57 million [4] - Operating earnings for Expansion Markets were $8.83 million, compared to the average estimate of $9.07 million [4] - Unallocated corporate expenses showed an operating loss of $9.21 million, better than the estimated loss of $12.06 million [4] - Contractor operating earnings were reported at $75.49 million, below the average estimate of $80.24 million [4] Stock Performance - Graco's shares returned +1.9% over the past month, while the Zacks S&P 500 composite increased by +5.9% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - Graco Inc. reported quarterly earnings of $0.75 per share, missing the Zacks Consensus Estimate of $0.78 per share, representing an earnings surprise of -3.85% [1]. Financial Performance - The company posted revenues of $571.81 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 2.29%, compared to year-ago revenues of $553.24 million [2]. - Over the last four quarters, Graco has surpassed consensus EPS estimates only once [2]. Stock Performance - Graco shares have increased approximately 3.5% since the beginning of the year, while the S&P 500 has gained 7.3% [3]. - The current consensus EPS estimate for the upcoming quarter is $0.74 on revenues of $558.67 million, and for the current fiscal year, it is $2.96 on revenues of $2.25 billion [7]. Industry Outlook - The Manufacturing - General Industrial industry, to which Graco belongs, is currently in the top 14% of over 250 Zacks industries, indicating a favorable outlook [8]. - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Graco's stock performance [5]. Future Expectations - The estimate revisions trend for Graco was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market in the near future [6]. - The upcoming earnings call will be crucial for understanding management's commentary on future earnings expectations [3].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 27, 2025 OR ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 001-09249 GRACO INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) 88 - ...

Graco Inc. (GGG) is benefiting from strength across its Industrial and Expansion Markets segments, improving order rates, product innovations and accretive acquisitions. The company's efforts to reward its shareholders handsomely add to its appeal.Headquartered in Minneapolis, MN, Graco is engaged in designing, manufacturing and marketing equipment and systems used to measure, move, control, spray and dispense fluid as well as powder materials. The company provides equipment solutions for materials with hig ...

Graco Inc. (NYSE:GGG) Q1 2025 Earnings Conference Call April 24, 2025 11:00 AM ET Company Participants Chris Knutson - Vice President, Controller & Chief Accounting Officer Mark Sheahan - President, Chief Executive Officer & Director David Lowe - Chief Financial Officer & Treasurer Conference Call Participants Deane Dray - RBC Capital Markets Mike Halloran - Baird Saree Boroditsky - Jefferies Bryan Blair - Oppenheimer Jeff Hammond - KeyBanc Capital Markets Andrew Buscaglia - BNP Paribas Exane Walter Liptak ...