Investors interested in Industrial Services stocks are likely familiar with Global Industrial (GIC) and W.W. Grainger (GWW) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our ...

Dividend Announcements - On 8/11/25, Apple, Navios Maritime Partners, and W.W. Grainger will trade ex-dividend for their upcoming dividends, with Apple paying $0.26, Navios Maritime Partners $0.05, and W.W. Grainger $2.26 [1] - The dividends will be paid on 8/14/25 for Apple and Navios Maritime Partners, and on 9/1/25 for W.W. Grainger [1] Stock Price Adjustments - Following the ex-dividend date, Apple shares are expected to trade approximately 0.12% lower, Navios Maritime Partners 0.11% lower, and W.W. Grainger 0.24% lower, based on their respective dividend yields [2] Dividend History and Stability - Apple is a contender for the "Dividend Aristocrats" index, having increased dividends for over 14 years, while Navios Maritime Partners and W.W. Grainger have their own historical dividend records [3] - The estimated annualized yields are projected to be 0.49% for Apple, 0.44% for Navios Maritime Partners, and 0.94% for W.W. Grainger, indicating a level of stability in their dividend payments [7] Recent Stock Performance - In recent trading, Apple shares are up about 5.1%, Navios Maritime Partners shares are up about 1.7%, and W.W. Grainger shares are up about 2.6% [8]

Core Insights - W.W. Grainger reported Q2 2025 sales of $4.55 billion, exceeding analyst estimates of $4.53 billion, while earnings per share (EPS) were $9.97, slightly below expectations of $10.07 [1][2] - The company revised its full-year 2025 adjusted EPS and margin outlook downward, despite strong growth in its Endless Assortment segment, which saw a 19.7% year-over-year sales increase [1][14] Financial Performance - Revenue (GAAP) increased by 5.6% year-over-year, driven primarily by the Endless Assortment unit [2][5] - Gross profit margin decreased to 38.5%, and operating margin fell to 14.9%, attributed to higher costs from U.S. tariffs on imports [2][7] - Free cash flow was reported at $202 million, reflecting increased capital expenditures [2][8] Business Overview - W.W. Grainger operates as a major distributor of industrial supplies and MRO solutions, serving over 4.5 million clients globally [3] - The company employs a dual model: High-Touch Solutions for complex procurement and the Endless Assortment platform for simpler transactions [3][4] Segment Performance - The Endless Assortment segment, including Zoro and MonotaRO, experienced significant growth, with sales up 19.7% [5][10] - High-Touch Solutions North America saw slower growth at 2.5%, with profitability impacted by tariff-related inflation [6][11] Strategic Focus - The company emphasizes technology-driven enhancements and supply chain resilience, with ongoing investments in eProcurement tools [4][12] - Management highlighted the importance of managing input costs and adapting pricing strategies to maintain profitability [4][12] Guidance and Future Outlook - Full-year 2025 adjusted diluted EPS is now expected to range from $38.50 to $40.25, down from previous estimates [14] - Sales growth outlook for 2025 has been raised to 4.4% to 5.9%, indicating continued top-line momentum despite lower profitability expectations [14][15] - Capital spending is projected to increase to $0.55 billion to $0.65 billion for fiscal 2025 [16]

Core Insights - W.W. Grainger, Inc. reported weaker-than-expected earnings for Q2, with earnings per share (EPS) of $9.97, missing the analyst consensus estimate of $10.04, while quarterly sales of $4.554 billion exceeded the estimate of $4.522 billion [1] - The company revised its FY2025 GAAP EPS guidance down from a range of $39.00-$41.50 to $38.50-$40.25, but raised its sales guidance from $17.600 billion-$18.100 billion to $17.900 billion-$18.200 billion [2] - CEO D.G. Macpherson emphasized the company's focus on customer relationships and innovation, noting that performance was affected by tariff-related factors, but expressed confidence in the company's ability to create value amid macroeconomic uncertainty [3] Analyst Reactions - Following the earnings announcement, RBC Capital analyst Deane Dray maintained a Sector Perform rating on W.W. Grainger and lowered the price target from $1,176 to $1,007 [6] - Loop Capital analyst Chris Dankert also maintained a Hold rating and reduced the price target from $1,000 to $950 [6]

Core Insights - W.W. Grainger reported $4.55 billion in revenue for the quarter ended June 2025, a year-over-year increase of 5.6% [1] - The company's EPS for the same period was $9.97, compared to $9.76 a year ago, with a slight EPS surprise of -0.3% against the consensus estimate of $10.00 [1] Financial Performance - Total reported growth was 5.1%, exceeding the five-analyst average estimate of 4.8% [4] - Net Sales for High-Touch Solutions N.A. were $3.54 billion, slightly below the average estimate of $3.55 billion, reflecting a year-over-year change of +2.5% [4] - Net Sales for Endless Assortment reached $929 million, surpassing the average estimate of $887.37 million, with a year-over-year change of +19.7% [4] - Net Sales for Other amounted to $81 million, in line with the average estimate of $81.42 million, showing a year-over-year change of +3.9% [4] Operating Earnings - Operating earnings for High-Touch Solutions N.A. were $589 million, below the average estimate of $609.17 million [4] - Operating earnings for Endless Assortment were $92 million, exceeding the average estimate of $76.73 million [4] - Operating losses for Other were reported at $-3 million, compared to the average estimate of $-1.05 million [4] Stock Performance - W.W. Grainger's shares returned -1% over the past month, while the Zacks S&P 500 composite increased by +2.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

PART I - FINANCIAL INFORMATION [Item 1: Financial Statements](index=3&type=section&id=Item%201%3A%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for W.W. Grainger, Inc. for the three and six months ended June 30, 2025, and 2024, including statements of earnings, comprehensive earnings, balance sheets, cash flows, and shareholders' equity, along with accompanying notes [Condensed Consolidated Statements of Earnings](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) Consolidated Earnings Summary (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $4,554 | $4,312 | $8,860 | $8,547 | | **Gross Profit** | $1,755 | $1,694 | $3,465 | $3,362 | | **Operating Earnings** | $678 | $649 | $1,350 | $1,318 | | **Net Earnings Attributable to W.W. Grainger, Inc.** | $482 | $470 | $961 | $948 | | **Diluted EPS** | $9.97 | $9.51 | $19.83 | $19.13 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $597 | $1,036 | | Total current assets | $5,650 | $5,737 | | **Total assets** | **$8,937** | **$8,829** | | Total current liabilities | $2,002 | $2,305 | | Long-term debt | $2,341 | $2,279 | | **Total shareholders' equity** | **$4,083** | **$3,703** | | **Total liabilities and shareholders' equity** | **$8,937** | **$8,829** | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Six Months Ended June 30 (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,023 | $1,072 | | Net cash used in investing activities | $(283) | $(177) | | Net cash used in financing activities | $(1,201) | $(763) | | **Net change in cash and cash equivalents** | **$(439)** | **$109** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company's two reportable segments are **High-Touch Solutions N.A. (HTSNA)** and **Endless Assortment (EA)**, which align with its go-to-market strategies[45](index=45&type=chunk) - In February 2025, Grainger repaid the full principal amount of **$500 million** for its 1.85% Senior Notes that matured[40](index=40&type=chunk) - In June 2025, the Endless Assortment segment's MonotaRO business entered into **¥9 billion** term loan agreements to fund distribution center expansion, maturing in 2035[43](index=43&type=chunk) [Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance for the second quarter and first half of 2025, covering consolidated results, segment performance, liquidity, and capital resources, while noting continued global economic volatility and strategies to mitigate inflationary pressures and supply chain challenges, with both High-Touch Solutions N.A. and Endless Assortment segments contributing to sales growth [Results of Operations –Three Months Ended June 30, 2025](index=17&type=section&id=Results%20of%20Operations%20%E2%80%93Three%20Months%20Ended%20June%2030%2C%202025) Q2 2025 Financial Highlights vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $4,554M | $4,312M | 5.6% | | Gross Profit | $1,755M | $1,694M | 3.6% | | Operating Earnings | $678M | $649M | 4.5% | | Diluted EPS | $9.97 | $9.51 | 4.8% | - Net sales on a daily, constant currency basis increased by **5.1%** in Q2 2025 compared to the prior year period[63](index=63&type=chunk) - Gross profit margin decreased by **80 basis points** to **38.5%** in Q2 2025 from **39.3%** in Q2 2024[63](index=63&type=chunk)[65](index=65&type=chunk) [Segment Analysis – Q2 2025](index=18&type=section&id=Segment%20Analysis%20%E2%80%93%20Q2%202025) High-Touch Solutions N.A. (HTSNA) Q2 Performance (in millions) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $3,544 | $3,458 | 2.5% | | Operating Earnings | $589 | $591 | (0.3)% | - HTSNA sales growth of **3%** on a daily, constant currency basis was primarily driven by volume, while gross profit margin decreased **70 basis points** due to negative price-cost spread and LIFO inventory impacts[71](index=71&type=chunk)[72](index=72&type=chunk) Endless Assortment (EA) Q2 Performance (in millions) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $929 | $776 | 19.7% | | Operating Earnings | $92 | $61 | 50.8% | - EA net sales increased **16%** on a daily, constant currency basis, driven by repeat business and enterprise customer growth at MonotaRO, with gross profit margin increasing by **30 basis points**[76](index=76&type=chunk)[77](index=77&type=chunk) [Results of Operations – Six Months Ended June 30, 2025](index=21&type=section&id=Results%20of%20Operations%20%E2%80%93%20Six%20Months%20Ended%20June%2030%2C%202025) YTD 2025 Financial Highlights vs. YTD 2024 | Metric | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $8,860M | $8,547M | 3.7% | | Gross Profit | $3,465M | $3,362M | 3.1% | | Operating Earnings | $1,350M | $1,318M | 2.4% | | Diluted EPS | $19.83 | $19.13 | 3.7% | - For the first six months of 2025, net sales on a daily, constant currency basis increased by **4.7%** compared to the same period in 2024[80](index=80&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the company had cash and cash equivalents of **$597 million** and total available liquidity of approximately **$1.8 billion**[105](index=105&type=chunk) - Net cash from operating activities decreased to **$1,023 million** for the first six months of 2025 from **$1,072 million** in the prior year, driven by unfavorable changes in working capital[106](index=106&type=chunk) - Net cash used in financing activities increased significantly to **$1,201 million**, primarily due to the **$500 million** repayment of Senior Notes[108](index=108&type=chunk) - Total debt as a percent of total capitalization decreased to **36.5%** as of June 30, 2025, from **42.9%** at December 31, 2024[110](index=110&type=chunk) [Item 3: Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no material changes to its primary market risk exposures, which include foreign currency exchange and interest rates, from those disclosed in its 2024 Form 10-K - There were no material changes to the Company's market risk from those described in the 2024 Form 10-K[122](index=122&type=chunk) [Item 4: Controls and Procedures](index=30&type=section&id=Item%204%3A%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[123](index=123&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[124](index=124&type=chunk) PART II - OTHER INFORMATION [Item 1: Legal Proceedings](index=31&type=section&id=Item%201%3A%20Legal%20Proceedings) This section refers to Note 7 of the financial statements for an update on the company's legal proceedings, including ongoing litigation involving KMCO, LLC - The company remains in litigation involving KMCO, LLC and cannot reasonably predict the timing, outcome, or potential loss related to these lawsuits[51](index=51&type=chunk)[127](index=127&type=chunk) [Item 1A: Risk Factors](index=31&type=section&id=Item%201A%3A%20Risk%20Factors) The company reports that there have been no material changes from the risk factors that were previously disclosed in its 2024 Annual Report on Form 10-K - There have been no material changes from the risk factors previously disclosed in the Company's 2024 Form 10-K[128](index=128&type=chunk) [Item 2: Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202%3A%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's repurchases of its common stock during the second quarter of 2025 under its publicly announced share repurchase program Issuer Purchases of Equity Securities – Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Apr. 1 – Apr. 30 | 95,367 | $976.31 | | May 1 – May 31 | 76,555 | $1,072.07 | | Jun. 1 – Jun. 30 | 48,872 | $1,053.04 | | **Total** | **220,794** | N/A | - As of June 30, 2025, **3,683,504 shares** may yet be purchased under the current repurchase program announced in April 2024[129](index=129&type=chunk) [Item 6: Exhibits](index=32&type=section&id=Item%206%3A%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, certifications by the CEO and CFO as required by the Sarbanes-Oxley Act, and XBRL data files - Exhibits filed include the By-laws of W.W. Grainger, Inc., and Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[134](index=134&type=chunk)

Core Insights - W.W. Grainger, Inc. (GWW) reported Q2 2025 EPS of $9.97, missing the Zacks Consensus Estimate of $10.00, but showing a 2% year-over-year improvement [1][8] - Quarterly revenues increased by 5.6% year-over-year to $4.55 billion, surpassing the Zacks Consensus Estimate of $4.52 billion, with daily sales also rising by 5.6% [1][8] Segment Performance - The High-Touch Solutions N.A. segment's daily sales grew by 2.5% year-over-year, supported by growth across all geographies, slightly above the predicted growth of 2.2% [2] - The Endless Assortment segment saw a significant daily sales increase of 19.7%, outperforming the estimated growth of 11% [2] Margin Analysis - Cost of sales rose by 6.9% year-over-year to $2.8 billion, while gross profit increased by 3.6% to $1.75 billion, resulting in a gross margin of 38.5%, down from 39.3% in the prior year [3] - Operating income rose by 4.5% year-over-year to $678 million, with an operating margin of 14.9%, slightly down from 15.1% [3] Cash Flow and Balance Sheet - Cash and cash equivalents decreased to $0.6 billion at the end of Q2 2025, down from $1 billion at the end of 2024 [4] - Cash flow from operating activities was $377 million in Q2 2025, compared to $411 million in the same quarter last year [4] - Long-term debt increased to $2.34 billion as of June 30, 2025, from $2.28 billion at the end of 2024 [5] - The company returned $336 million to shareholders through dividends and share buybacks during the reported quarter [5] 2025 Outlook - GWW updated its 2025 net sales forecast to between $17.9 billion and $18.2 billion, up from the previous estimate of $17.6 billion to $18.1 billion, with anticipated sales growth of 4.4-5.9% [6] - Daily sales growth is now expected to be between 4.5% and 6%, revised from the earlier estimate of 4% to 6.5% [6] - EPS guidance has been adjusted to $38.50-$40.25, down from the previous range of $39.00-$41.50 [6] Stock Performance - Over the past year, GWW's shares have increased by 11.2%, while the industry has seen a growth of 16.6% [7]

Core Viewpoint - The company, Grainger (GWW.US), experienced a nearly 10% decline in stock price, approaching its year-to-date low, closing at $940.82, following its second-quarter earnings report which showed mixed results compared to analyst expectations [1] Financial Performance - Adjusted diluted earnings per share for the second quarter were $9.97, an increase from $9.76 in the same period last year, but below the analyst expectation of $10.07 [1] - Quarterly net sales reached $4.55 billion, up from $4.31 billion year-over-year, exceeding the analyst forecast of $4.53 billion [1] Future Guidance - The company revised its 2025 diluted earnings per share guidance to a range of $38.50 to $40.25, down from the previous estimate of $39 to $41.50, while analysts had expected $40.46 [1] - Projected net sales for 2025 are now estimated to be between $17.9 billion and $18.2 billion, slightly up from the prior outlook of $17.6 billion to $18.1 billion, aligning with the analyst expectation of $17.92 billion [1]

Financial Data and Key Metrics Changes - Total company reported sales for the quarter were nearly $4,600,000,000, up 5.6% or 5.1% on a daily constant currency basis [10] - Operating margins for the company were 14.9%, and diluted EPS finished the quarter at $9.97, up $0.21 or 2.2% compared to the prior year [13] - Operating cash flow came in at $377 million, allowing the company to return a total of $336,000,000 to shareholders through dividends and share repurchases [10][13] Business Line Data and Key Metrics Changes - The High-tech Solutions segment saw sales up 2.5% on a reported basis, driven by volume growth and modest price inflation, with a gross profit margin of 41%, down 70 basis points year-over-year [14] - The Endless Assortment segment experienced a sales increase of 19.7% or 16.3% on a daily constant currency basis, with Zoro U.S. up 20% and MonotaRO achieving 16.4% growth [17] - Operating margins for the Endless Assortment segment increased by 200 basis points to 9.9%, with MonotaRO's margins at 13.2% [18] Market Data and Key Metrics Changes - The MRO market remained muted but was softer than expected, with strong performance from contractor and healthcare customers helping to offset slower growth in other areas [14] - Preliminary total company July sales were up slightly north of 6% on a daily constant currency basis, with expectations for total company sales for the third quarter to be up north of 5% [26] Company Strategy and Development Direction - The company is focused on helping customers drive efficiencies, lower purchasing costs, and improve inventory management, especially in uncertain times [6][7] - Strategic investments in product information and digital capabilities are enhancing the company's supply chain and customer service [9] - The company is committed to maintaining price competitiveness and achieving price-cost neutrality over time [23] Management's Comments on Operating Environment and Future Outlook - Management noted that the external environment continues to present uncertainty, but the company remains confident in its ability to deliver value [6][10] - The company updated its earnings outlook for 2025, reflecting tariff-related price-cost timing headwinds and a current full-year estimate for LIFO valuation impact [24] - Management expects gross margin to recover over time as pricing actions take effect and as the company works towards price-cost neutrality [23][25] Other Important Information - The company is adjusting its sales outlook to reflect the latest FX rates and pricing actions, with gross margin now expected to be between 38.6% and 38.9% [25] - The company plans to continue optimizing Zoro's assortment, with a reduction of 1,100,000 SKUs in the quarter to improve customer experience [19][20] Q&A Session Summary Question: Impact of LIFO accounting on operating income - Management indicated that if the company were on FIFO, the second half outlook would not have included the negative impacts of LIFO, but underlying operations would remain similar [30] Question: Progression from Q3 to Q4 - Management expects revenue trends to follow normal seasonality, with improvements in gross margins anticipated due to pricing changes [31][33] Question: Decision-making process for pricing actions - Management decided to keep price increases on a normal schedule to maintain customer stability, despite being slightly upside down in price-cost [39] Question: Zoro's pricing optimization and SKU reduction - Management stated that the pricing decision has been in the works for about a year, aimed at improving customer experience by eliminating low-volume items [41][42] Question: Customer reliance on Grainger during disruptions - Management noted that the current disruption is less about supply and more about market demand, with confidence in passing prices through to customers [48][49] Question: Gross margin pressures - Management clarified that the majority of the gross margin pressure is due to LIFO impacts, with price-cost timing being a smaller factor [51][73] Question: Future pricing and tariff impacts - Management expressed uncertainty about the impact of new tariffs but indicated that the current announcements would not have a significant effect [76] Question: Long-term strategic goals related to pricing - Management emphasized that long-term strategy focuses on providing exceptional service and building customer loyalty rather than solely on pricing [82] Question: Dynamics within government customers - Management reported stability in government contracts, with military business performing well while non-military federal business has struggled [123]

Financial Data and Key Metrics Changes - Total company reported sales for the quarter were nearly $4,600,000,000, up 5.6% or 5.1% on a daily constant currency basis [8][11] - Operating margins for the company were 14.9%, down 50 basis points compared to 2024 [11] - Diluted EPS finished the quarter at $9.97, up $0.21 or 2.2% compared to the prior year period [11] - Operating cash flow came in at $377 million, allowing the company to return a total of $336,000,000 to shareholders through dividends and share repurchases [8] Business Line Data and Key Metrics Changes - High-tech Solutions segment sales were up 2.5% on a reported basis or up 2.8% on a daily constant currency basis, driven by volume growth and modest price inflation [12] - Endless assortment segment sales increased 19.7% or 16.3% on a daily constant currency basis, with Zoro U.S. up 20% and MonotaRO achieving 16.4% growth [15] - Operating margins for the endless assortment segment increased by 200 basis points to 9.9% [15] Market Data and Key Metrics Changes - The MRO market remained muted but was softer than expected, with strong performance from contractor and healthcare customers helping offset slower growth in other areas [12] - Preliminary total company July sales were up slightly north of 6% on a daily constant currency basis, aided by softer comps in the prior year period [23] Company Strategy and Development Direction - The company is focused on helping customers drive efficiencies, lower purchasing costs, and improve inventory management [5][6] - Strategic investments in product information and digital capabilities are enhancing the company's supply chain [7] - The company is committed to supporting local communities with emergency response and recovery efforts [7] Management's Comments on Operating Environment and Future Outlook - The external environment continues to present uncertainty, but the company remains confident in its ability to deliver value [5][8] - The company anticipates continued LIFO headwinds and further price cost timing pressures impacting performance in the back half of the year [9] - The updated outlook for 2025 reflects a lower gross margin guide, now expected to be between 38.6% and 38.9% [22] Other Important Information - The company is adjusting its sales outlook to reflect the latest FX rates and pricing actions, with total company sales for the third quarter expected to be up north of 5% on a daily constant currency basis [22][23] - The company plans to continue optimizing Zoro's assortment, with a net SKU decline of 1,100,000 in the quarter [17] Q&A Session Summary Question: Impact of LIFO accounting on operating income - Management noted that if the company were on FIFO, the second half outlook would not have included the negative impacts of LIFO, but underlying operations would remain similar [28] Question: Progression from Q3 to Q4 - Management indicated that pricing will continue to build with the September pricing change, leading to improved gross margins in Q4 [30] Question: Decision-making process for pricing actions - Management decided to keep price increases on a normal schedule for customer stability, despite being slightly upside down in price cost [37] Question: Zoro's pricing optimization and SKU reduction - The pricing decision has been in the works for about a year, focusing on improving customer experience by eliminating low-volume items [40] Question: Customer demand and market dynamics - Management acknowledged that while market demand is expected to be muted, they feel confident in their ability to realize prices despite lower market demand [113] Question: Government customer dynamics - Management reported stability in government contracts, with no significant cancellations impacting the business [120]