Core Insights - Graco Inc. reported a revenue of $548.67 million for the quarter ended December 2024, reflecting a decrease of 3.2% year-over-year and a negative surprise of 0.99% compared to the Zacks Consensus Estimate of $554.15 million [1] - The company's EPS for the quarter was $0.64, down from $0.80 in the same quarter last year, resulting in an EPS surprise of -15.79% against the consensus estimate of $0.76 [1] Financial Performance Metrics - Industrial net sales were reported at $165.66 million, which is a decline of 13.7% compared to the year-ago quarter and below the average estimate of $187.62 million from five analysts [4] - Process net sales reached $136.12 million, slightly above the average estimate of $129.42 million, showing a year-over-year increase of 0.2% [4] - Contractor net sales were $246.89 million, exceeding the average estimate of $235.12 million, with a year-over-year growth of 3.4% [4] - Operating earnings for the Industrial segment were $51.61 million, lower than the average estimate of $67.12 million [4] - Unallocated corporate expenses were reported at -$7.14 million, slightly better than the average estimate of -$7.33 million [4] - Contractor operating earnings were $48.59 million, significantly below the average estimate of $69.81 million [4] - Process operating earnings were $36.96 million, surpassing the average estimate of $33.86 million [4] Stock Performance - Graco's shares have returned +0.8% over the past month, while the Zacks S&P 500 composite has increased by +4.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Performance - In 2024, Graco's total product development expenditures reached $87 million, averaging approximately 4% of sales over the last three years[28]. - Total sales for Graco in 2024 were driven by strong performance across all three reportable segments[17]. - Sales in the Americas comprised around 63% of total sales, with EMEA at 21% and Asia Pacific at 16% in 2024[18]. - The Contractor segment accounted for approximately 47% of total sales in 2024, focusing on sprayers for various applications[30]. - The Industrial segment represented about 29% of total sales in 2024, serving markets such as automotive, aerospace, and construction[36]. - The Process segment contributed approximately 24% to total sales in 2024, targeting industries like food and beverage, oil and natural gas, and pharmaceuticals[43]. Business Strategy and Operations - The company focuses on product innovation and customer service as key components of its long-term growth strategy[16]. - The company is pursuing a strategy to convert contractors from manual application to spray technology, expanding its distributor network globally[34]. - The company plans to classify its business into three reportable segments: Contractor, Industrial, and Expansion Markets, effective January 1, 2025[49]. - The Industrial segment includes the newly formed Industrial Division and the Powder Division, while the Expansion Markets segment focuses on inorganic growth[50]. - Graco's manufacturing capacity is aligned with business demand, supported by recent expansions and modernization efforts[26]. - The company made targeted acquisitions in 2024 to enhance product offerings and expand manufacturing capabilities[14]. - The company completed acquisitions in the Contractor and Process segments in 2024, enhancing product offerings and manufacturing capabilities[14]. - The company invested in engineering, manufacturing, and commercial resources for acquired businesses based on expected return on investment[29]. - The company focuses on enhancing product capabilities with an emphasis on automation, configurability, and data analytics[27]. Supply Chain and Market Conditions - The global supply chain stabilized in 2024, leading to improved lead times and reduced inflationary effects[52]. - The company sources raw materials and components from multiple suppliers, primarily in the Asia Pacific region, to manage costs[51]. Workforce and Employee Programs - The company employed approximately 4,300 persons as of December 27, 2024, with 1,900 employees based outside the U.S.[57]. - The company’s total rewards program includes base pay, variable pay, equity-based compensation, and health benefits to attract and retain talent[61]. Community Engagement and Philanthropy - The Graco Foundation focuses on grants for capital projects, specific programs, and technology needs to enhance community service capabilities[64]. - Emphasis is placed on educational programs, particularly in STEM (science, technology, engineering, and math) fields[64]. - The foundation supports human service programs aimed at workforce development and youth development initiatives[64]. - Employee-based programs include dollar-for-dollar gift matching and grants to support volunteerism[64]. - Scholarships are provided for children of employees, promoting educational advancement[64]. - The foundation engages in tutoring programs with local middle schools to support student learning[64]. - An annual Paint-A-Thon is organized to assist low-income seniors and individuals with permanent disabilities[64]. - The goal of the Graco Foundation is to help organizations grow their ability to serve community needs[64]. - Volunteer efforts by employees are a significant aspect of the foundation's community engagement strategy[64]. - The foundation's initiatives aim to foster independence for vulnerable populations in their own homes[64]. Expansion Projects - Graco completed significant expansion projects in 2024, including a new worldwide distribution center in Dayton, Minnesota[26]. - The company completed significant expansion projects in 2024, including a worldwide distribution center in Dayton, Minnesota, and a manufacturing facility in Gossau, Switzerland[26].

Core Insights - Graco Inc. is focused on product innovation and upgrades, launching several new products in 2024 and 2023, with significant investments in product development [1][3] - The company has expanded its product portfolio through strategic acquisitions, including Corob S.p.A. and PCT System, enhancing its market position [2] - Graco is investing in manufacturing facilities to support growth, including expansions in South Dakota, Romania, and Switzerland [3] - The company has implemented shareholder-friendly policies, increasing dividends and repurchasing shares [4] Product Development - In 2024, Graco introduced innovative products such as the PowerShot XT electronic-powered airless paint gun and Stellair ACE [1] - The company invested $87.2 million in product development in 2024, up from $83 million in 2023 [1] Acquisitions - Graco acquired Corob S.p.A. in November 2024, enhancing its Contractor segment and product offerings [2] - The acquisition of PCT System in August 2024 bolstered Graco's White Knight business and semiconductor market presence [2] Manufacturing Investments - Graco expanded its South Dakota facility and built new manufacturing sites in Romania and Switzerland [3] - The company is also modernizing its Minnesota facility as part of its growth strategy [3] Shareholder Policies - In 2024, Graco paid $172.1 million in dividends, an 8.7% increase year over year [4] - The company repurchased shares worth $31.4 million in 2024 and raised its quarterly dividend by 7.8% to 27.5 cents per share [4]

Company Overview - Graco Inc. (GGG) is currently experiencing significant attention from investors due to high implied volatility in its options market, particularly the February 21, 2025 $70 Call option [1] - The company holds a Zacks Rank of 3 (Hold) within the Manufacturing - General Industrial industry, which is positioned in the bottom 29% of the Zacks Industry Rank [3] Implied Volatility Insights - Implied volatility indicates the market's expectation of future price movement, with high levels suggesting that investors anticipate a significant price change or an upcoming event that could lead to a major rally or sell-off [2] - The current high implied volatility for Graco shares may signal a developing trading opportunity, as options traders often seek to sell premium on options with elevated implied volatility to capture decay [4] Analyst Sentiment - Over the past 60 days, there has been mixed sentiment among analysts regarding Graco's earnings estimates, with one analyst increasing the estimate and another decreasing it, resulting in a slight rise in the Zacks Consensus Estimate from 67 cents to 68 cents per share for the current quarter [3]

Core Insights - Graco has launched the EasyTurn™ 360° 2-in-1 Convertible Car Seat, featuring a 360° rotating design for easy access to children in both rear-facing and forward-facing modes, accommodating children from 4 to 65 lbs [1][2] - The car seat is designed with advanced safety technology and has passed rigorous crash testing, ensuring high safety standards [2][3] - The product is priced at MSRP $299.99 and is available for pre-order on Amazon, with broader availability on GracoBaby.com and major retailers like Walmart and Target [4] Company Overview - Graco has over 65 years of experience in creating reliable baby gear, focusing on innovative solutions that help parents [5] - The company is part of Newell Brands Inc., a global consumer products company with a diverse portfolio of well-known brands [6] Product Features - The EasyTurn 360° includes SnugLock® Technology for quick installation, a No-Rethread Simply Safe Adjust™ Harness System for height adjustments, and an InRight™ LATCH System for secure connections [7] - Additional features include a level indicator, four-position recline, plush removable inserts for infants, and two easy-to-clean cup holders [7]

Core Insights - Graco Inc. reported its annual results on the 28th, experiencing a pre-market decline of 7% but ultimately closing the session down by 2.8% [1] Company Performance - The market reaction to Graco's annual results was negative, with a significant drop in pre-market trading followed by a slight recovery during the session [1] Investment Perspective - The analysis emphasizes the search for high-quality businesses to build a long-term portfolio that can outperform the market [1]

Core Insights - Graco, Inc. reported disappointing fourth quarter results for fiscal 2024, leading to a mid-single digit decline in stock price, although it later recovered during trading [1]. Company Performance - The fourth quarter results for Graco, Inc. were below expectations, causing a negative reaction in the stock market [1]. Market Reaction - Following the earnings release, Graco's stock experienced a decline in the mid-single digits but managed to recover during the trading session [1].

Financial Data and Key Metrics Changes - Graco reported fourth quarter sales of $549 million, a decrease of 3% from the same quarter last year, with acquisitions contributing 3% sales growth [5] - Reported net earnings decreased 1% to $109 million for the quarter, or $0.63 per diluted share, while adjusted non-GAAP net earnings were $110 million or $0.64 per diluted share, a decrease of 20% [6] - The gross margin rate decreased by 200 basis points, leading to an operating margin rate of 24% compared to 30% for the same quarter last year [10] - Cash provided by operations totaled $622 million for the year, a decrease of $29 million from last year, with cash provided by operations as a percent of reported net earnings at 128% for the year [11] Business Line Data and Key Metrics Changes - Contractor segment revenue declined 3% for the quarter and was down 1% for the year, primarily due to softness in the U.S. housing and remodeling markets [25] - Industrial segment revenue declined 13% for the quarter and was down 6% for the full year, with significant weakness in China impacting key end markets [27] - Process segment sales improved during the quarter, with growth across major project categories, including vehicle service and industrial lubrication [21] Market Data and Key Metrics Changes - Sales in the semiconductor markets continued to decline globally, although there was growth in North America during the quarter [22] - The container market showed improvement throughout the year in Asia Pacific, contributing to growth in Protective Coatings activities [22] - The overall business landscape remained soft across many end markets, particularly in China and the semiconductor sector [20] Company Strategy and Development Direction - The company moved to a global customer-centric operating structure effective January 1, 2025, resulting in a nonrecurring business reorganization charge of $8 million in the fourth quarter [14] - The new operating structure consists of three segments: Industrial, Expansion Markets, and Contractor, aimed at leveraging customer and channel synergies [15][16] - The company is focusing on M&A activities and exploring new markets, with an active pipeline for potential acquisitions [24][76] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism that the worst market conditions are behind them, anticipating low single-digit sales growth on an organic constant currency basis for 2025 [32] - The company expects to see incremental volume from new initiatives and pricing actions, contributing to strong incremental margins [24] - Management acknowledged ongoing challenges in certain markets but highlighted positive booking momentum and resilience in cash flow [32][31] Other Important Information - Significant year-to-date uses of cash included share repurchases, acquisitions, dividends, and capital expenditures, with total cash uses offset by share issuances [12] - The company expects capital expenditures to be approximately $50 million to $60 million as expansion projects are nearing completion [14] Q&A Session Summary Question: How did the quarter perform versus expectations, particularly in China and semiconductor markets? - Management noted that the Process division overperformed expectations, while Industrial and Contractor segments underperformed due to sharp declines in Asia Pacific and sluggish end markets [38][39] Question: How does Graco's concentrated manufacturing footprint affect tariff impacts? - Management indicated that they did not specifically factor tariffs into their pricing strategy but believe they can manage potential impacts effectively [44][46] Question: Can you clarify the outlook and order rates? - Management confirmed that order rates have been consistent, aligning with their low single-digit growth guidance for the year [50][66] Question: What are the expected savings from the reorganization? - Management stated that the reorganization savings of approximately $16 million should start being realized immediately, with benefits seen across all segments [60][62] Question: What is the expected contribution from Corob in 2025? - Management anticipates low single-digit growth from Corob, with expectations for it to be slightly accretive to EPS in 2026 [120][121]

Graco Inc.’s (GGG) fourth-quarter 2024 adjusted earnings of 64 cents per share missed the Zacks Consensus Estimate of 76 cents. The bottom line declined 20% year over year.The company’s net sales of $548.7 million missed the consensus estimate of $554 million. The top line fell 3% year over year due to lower demand in the Industrial segment.On a regional basis, quarterly sales generated from the Americas decreased 1% year over year. In Europe, the Middle East and Africa, sales decreased 2% year over year. S ...

Graco Inc. (GGG) came out with quarterly earnings of $0.64 per share, missing the Zacks Consensus Estimate of $0.76 per share. This compares to earnings of $0.80 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -15.79%. A quarter ago, it was expected that this company would post earnings of $0.76 per share when it actually produced earnings of $0.71, delivering a surprise of -6.58%.Over the last four quarters, the company has s ...