W.W. Grainger, Inc. (NYSE:GWW) is included among the 16 Best Dividend Stocks with Rising Payouts. W.W. Grainger (GWW) Gets Price Target Increase from JPMorgan Following Earnings Update On February 6, JPMorgan analyst Patrick Baumann raised his price recommendation on W.W. Grainger, Inc. (NYSE:GWW) to $1,165 from $1,100. The analyst maintained a Neutral rating on the shares. The adjustment came after the firm updated its financial model following the company’s fourth-quarter results. During the Q4 2025 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 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 1-5684 W.W. Grainger, Inc. (Exact name of registrant as specified in its charter) Illinois 36-1150280 (State or other juri ...

Core Viewpoint - Grainger has announced a slate of 12 nominees for its Board of Directors to be voted on at the 2026 Annual Meeting, emphasizing the Board's commitment to creating sustainable, long-term value for stakeholders [1]. Group 1: Board of Directors - The 12 candidates nominated for the Board are all current members, including Rodney C. Adkins, George S. Davis, and D.G. Macpherson among others [1]. - D.G. Macpherson, Grainger's Chairman and CEO, highlighted the Board's diverse leadership and unified commitment to the company's purpose of ensuring operational continuity [1]. Group 2: Company Overview - Grainger is a leading broad line distributor primarily operating in North America and Japan, serving over 4.6 million customers with maintenance, repair, and operating (MRO) products [1]. - The company reported a revenue of $17.9 billion for the year 2025, showcasing its strong market position and commitment to service [1].

Core Insights - Grainger reported earnings per share (EPS) of $9.44 for Q4 2025, slightly above the estimated $9.43, with revenue of approximately $4.43 billion, exceeding the estimated $4.40 billion [1][2] Group 1: Financial Performance - In Q4 2025, Grainger achieved sales of $4.43 billion, a 4.5% increase compared to Q4 2024, but the operating margin decreased by 70 basis points to 14.3% [2] - For the full year 2025, Grainger's sales grew to $17.9 billion, a 4.5% increase from the previous year, with an operating margin reported at 13.9%, down 150 basis points [3] - The diluted EPS for 2025 was $35.40, reflecting an 8.6% decline, but on an adjusted basis, EPS increased by 1.3% to $39.48 [3] Group 2: Cash Flow and Shareholder Returns - Grainger produced $2 billion in operating cash flow in 2025 and returned $1.5 billion to shareholders through dividends and share repurchases [4] - The company's price-to-earnings (P/E) ratio is approximately 31.47, and its price-to-sales ratio stands at about 3.04, indicating investor confidence [4] Group 3: Future Outlook - For 2026, Grainger projects a daily, organic constant currency sales growth of 6.5% to 9.0%, driven by strategic initiatives and commitment to customer service [5] - The company maintains a solid financial position with a debt-to-equity ratio of approximately 0.76 and a current ratio of about 2.72 [5]

Core Insights - W.W. Grainger, Inc. (GWW) reported adjusted earnings per share (EPS) of $9.44 for Q4 2025, slightly exceeding the Zacks Consensus Estimate of $9.43, but down from $9.71 in the same quarter last year [1] - Quarterly sales increased by 4.5% year over year to $4.43 billion, surpassing the Zacks Consensus Estimate of $4.40 billion [1] - Daily sales also rose by 4.5% compared to the prior-year quarter, although the predicted increase was 4.9% [1] Segment Performance - The High-Touch Solutions N.A. segment saw daily sales growth of 2.2% year over year, driven by growth in the U.S. and Canada, while the predicted growth was 3.4% [2] - The Endless Assortment segment experienced a significant daily sales increase of 14.3% year over year, attributed to strong performances from MonotaRO and Zoro, although the model predicted 18.2% growth [2] Operational Update - Cost of sales rose by 4.8% year over year to $2.68 billion, while gross profit increased by 4.2% to $1.74 billion, resulting in a gross margin of 39.5%, slightly down from 39.6% in the previous year [3] - Selling, general and administrative expenses increased by 6.6% to $1.11 billion, leading to an operating income of $634 million, which is a 0.2% increase year over year, with an operating margin of 14.3% compared to 15% in the prior-year quarter [3] Cash Flow & Balance Sheet - At the end of 2026, cash and cash equivalents were $0.59 billion, down from $1.04 billion at the end of 2024, with cash flow from operating activities at $2.02 billion compared to $2.11 billion the previous year [4] - Long-term debt increased to $2.36 billion as of December 31, 2025, from $2.28 billion a year earlier, with $1.5 billion returned to shareholders through dividends and share buybacks in 2025 [4] 2025 Performance - Adjusted EPS for 2025 decreased by 9% year over year to $35.40, missing the Zacks Consensus Estimate of $39.45 and falling short of the company's expected range of $39.00-$39.75 [5] - Sales for the year improved by 4.5% to $17.94 billion, aligning with the company's guidance of $17.8-$18 billion and exceeding the Zacks Consensus Estimate of $17.92 billion [5] 2026 Outlook - The company anticipates net sales between $18.7 billion and $19.1 billion for 2026, with expected sales growth of 4.2-6.7% and daily sales growth projected at 6.5-9% [6] - Earnings per share are forecasted to be in the range of $42.25-$44.75 [6] Stock Performance - Over the past year, GWW shares have increased by 5.7%, outperforming the industry's breakeven performance [8]

Financial Data and Key Metrics Changes - In 2025, total company sales grew by 4.5% on a reported basis, or 4.9% on a daily organic constant currency basis, finishing the year at $17.9 billion [17][19] - Operating margin for the year was 15%, with adjusted EPS growth of 1.3%, equating to $39.48 per share [18] - ROIC finished at 39.1%, and operating cash flow was $2 billion, allowing for $1.5 billion returned to shareholders through dividends and share repurchases [18] Business Line Data and Key Metrics Changes - High-Touch Solutions segment saw sales growth of 2.2% on a reported basis, with nearly three points of price inflation contributing to this growth [21] - Endless Assortment segment reported a significant top-line improvement, with daily organic constant currency sales up 15.6%, driven by Zoro and MonotaRO's strong performance [17][31] - Zoro U.S. sales increased by 16%, while MonotaRO achieved 18.4% growth in local days, local constant currency [31] Market Data and Key Metrics Changes - The MRO market showed sequential momentum but remained muted overall, with Grainger experiencing strong performance with contractor and manufacturing customers [21] - The company noted a bifurcation in demand across industries, with some sectors experiencing tailwinds while others faced headwinds due to tariffs [26][30] Company Strategy and Development Direction - Grainger's strategy focuses on leveraging technology and MRO expertise to strengthen competitive advantages, streamline operations, and enhance customer experience [4][5] - The company is investing in supply chain capacity and technology capabilities, including AI and machine learning, to drive growth and improve service delivery [10][12] - Grainger aims to achieve 400-500 basis points of average annual outgrowth over time, with a focus on marketing and merchandising as key contributors [30][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic uncertainties and challenges in 2025 but expressed confidence in the company's ability to deliver growth and shareholder returns [4][18] - For 2026, the company expects revenue between $18.7 billion and $19.1 billion, with daily organic constant currency sales growth projected between 6.5% and 9% [33][39] - Management remains cautious about market growth, anticipating a potential decline of 1.5% to flat in the MRO market, while expecting to gain share through strategic investments [33][34] Other Important Information - Grainger was recognized as a Great Place to Work and one of the World's Most Ethical Companies, reflecting its commitment to employee satisfaction and ethical practices [16] - The company is focused on capital allocation, with expected operating cash flow of approximately $2.1 billion to $2.3 billion and planned CapEx of $550 million to $650 million [38] Q&A Session Summary Question: Growth outlook and cautiousness for the year - Management indicated that planning conservatively is essential, with January's strong performance influenced by a competitive outage in Japan [46][48] Question: Update on digital channels - EDI ePro has become the largest share of order origination at nearly 40%, with KeepStock and GCOM also contributing significantly [49][50] Question: Customer tone and market expectations - Conversations with customers indicate a mixed tone, with no panic but also no significant tailwinds expected for volume growth [56][57] Question: Gross margins and first-quarter expectations - LIFO costs are expected to impact gross margins in Q1, with additional headwinds from the Grainger sales meeting affecting SG&A [63][70] Question: Outgrowth expectations and market dynamics - Management noted that external factors and execution will influence outgrowth, with a focus on improving seller effectiveness and net contracts [82][84]

Financial Data and Key Metrics Changes - Total company sales growth for 2025 was 4.5% on a reported basis and 4.9% on a daily organic constant currency basis, finishing the year at $17.9 billion [17][19] - Operating margin for the year was 15%, with adjusted EPS growth of 1.3% to $39.48 per share [18] - ROIC finished at 39.1%, and operating cash flow was $2 billion, allowing for $1.5 billion returned to shareholders through dividends and share repurchases [18] Business Line Data and Key Metrics Changes - High-Touch Solutions segment delivered sales growth of 2.2% on a reported basis, with nearly 3 points of price inflation contributing to this growth [21] - Endless Assortment segment saw significant improvement, with daily organic constant currency sales up 15.6%, driven by strong performance from Zoro and MonotaRO [17][31] - Zoro achieved 16% growth, while MonotaRO experienced 18.4% growth in local constant currency [31] Market Data and Key Metrics Changes - The MRO market showed sequential momentum but remained muted overall, with Grainger's performance particularly strong in contractor and manufacturing sectors [21] - The company expects market volumes to be down 1.5% to flat in 2026, reflecting cautious outlook due to tariff-related price increases [33] Company Strategy and Development Direction - Grainger is focused on leveraging technology and data capabilities to enhance customer experience and drive growth, with significant investments in AI and machine learning [5][10] - The company streamlined its portfolio by exiting the UK market and is investing in new supply chain capacity to maintain service leadership [4][15] - Grainger aims to achieve 400-500 basis points of average annual outgrowth over time, with a focus on improving seller effectiveness and expanding seller coverage [30][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic challenges in 2025 but expressed confidence in the company's ability to deliver strong results and growth in 2026 [4][18] - The tone of conversations with large customers remains cautious, with no significant tailwinds expected for market growth [56] - The company anticipates continued demand pressure in the High-Touch Solutions segment due to tariff-related price increases [33] Other Important Information - Grainger was recognized as a great place to work and one of the world's most ethical companies, reflecting its commitment to a positive workplace culture [16] - The company plans to invest $550 million to $650 million in capital expenditures for supply chain initiatives and technology investments in 2026 [38] Q&A Session Summary Question: What drives the cautious outlook for the year overall? - Management plans conservatively and acknowledges a strong start in January but notes a tailwind from a competitive outage in Japan [46][48] Question: Update on digital channels and order origination? - EDI ePro has grown to about 40% of order origination, with KeepStock also increasing its share [49][50] Question: Tone of conversations with large customers? - The tone remains cautious, with no panic but also no significant optimism for volume growth [56][57] Question: Update on mid-sized customer growth? - There has been some acceleration, driven by marketing and merchandising efforts, but it is not a significant inflection point [60] Question: Gross margins in Q4 and expectations for Q1? - Q4 gross margins were better than expected due to LIFO costs being less negative, but Q1 is expected to see some LIFO costs shift, impacting margins [63][70] Question: Factors affecting margin guidance for 2026? - The exit from the UK market will provide a tailwind, while the faster growth of Endless Assortment will be a headwind for margins [78]

Financial Data and Key Metrics Changes - In 2025, total company sales grew by 4.5% on a reported basis, or 4.9% on a daily organic constant currency basis, finishing the year at $17.9 billion [17][19] - Operating margin for the year was 15%, with adjusted EPS growth of 1.3%, equating to $39.48 per share [18] - ROIC finished at 39.1%, and operating cash flow was $2 billion, allowing for $1.5 billion returned to shareholders through dividends and share repurchases [18] Business Line Data and Key Metrics Changes - High-Touch Solutions segment delivered sales growth of 2.2% on a reported basis, with nearly 3 points of price inflation contributing to this growth [22] - Endless Assortment segment saw significant improvement, with daily organic constant currency sales up 15.6%, driven by strong performance from Zoro and MonotaRO [17] - Zoro achieved a sales increase of 16%, while MonotaRO experienced 18.4% growth in local constant currency [32] Market Data and Key Metrics Changes - The MRO market showed signs of sequential momentum but remained muted overall, with Grainger's indicators suggesting a mixed outlook across different sectors [22][26] - The multifactor model used to assess market volume indicated Grainger finished 2025 with roughly 250 basis points of outgrowth on a volume basis, despite the overall market being down between 1.5% and 0.5% [31] Company Strategy and Development Direction - The company streamlined its portfolio by exiting the UK market and invested in new supply chain capacity to enhance service leadership [4][17] - Grainger is focused on leveraging technology and data capabilities to drive growth, with significant investments in AI and machine learning to optimize marketing and seller effectiveness [5][12] - The company aims to achieve 400-500 basis points of average annual outgrowth over time, with a focus on improving seller coverage and effectiveness [31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2025, including tariff dynamics and soft MRO market demand, but expressed confidence in the company's ability to deliver growth and shareholder returns [18][34] - For 2026, the company expects revenue between $18.7 billion and $19.1 billion, with daily organic constant currency sales growth projected between 6.5% and 9% [34][41] - Management remains cautious about market growth, anticipating continued demand pressure due to tariff-related price increases [34] Other Important Information - Grainger was recognized as a great place to work and one of the world's most ethical companies, reflecting its commitment to a positive workplace culture [16] - The company plans to invest approximately $550 million to $650 million in capital expenditures to support supply chain initiatives and technology investments [40] Q&A Session Summary Question: Growth outlook and cautiousness for the year - Management indicated that planning conservatively is essential, and while January showed strong growth, external factors like competitive outages influenced results [48][49] Question: Update on digital channels - EDI ePro has grown to approximately 40% of order origination, indicating a shift towards direct connections with customers [50][52] Question: Customer tone and market expectations - Conversations with large customers reflect a mixed sentiment, with no panic but also no significant tailwinds expected for volume growth [58][59] Question: Gross margins and first-quarter expectations - Gross margins in Q4 were better than expected, with LIFO costs impacting first-quarter margins negatively [64][66] Question: Continued outgrowth for High-Touch Solutions - Management noted that external factors and execution challenges have influenced outgrowth, but improvements in seller effectiveness and marketing are expected to drive future growth [81][82]

NYSE: GWW Q4 2025 Earnings Call February 3, 2026 © 2026 W.W. Grainger, Inc. Safe Harbor Statement and Non-GAAP Financial Measures All statements in this communication, other than those relating to historical facts, are "forward-looking statements" under the federal securities laws. Forward-looking statements can generally be identified by their use of terms such as "anticipate," "estimate," "believe," "expect," "could," "forecast," "may," "intend," "plan," "predict," "project," "will," or "would," and simil ...

Core Insights - W.W. Grainger reported quarterly earnings of $9.44 per share, slightly exceeding the Zacks Consensus Estimate of $9.43 per share, but down from $9.71 per share a year ago, indicating a +0.07% earnings surprise [1] - The company achieved revenues of $4.43 billion for the quarter, surpassing the Zacks Consensus Estimate by 0.59% and showing an increase from $4.23 billion year-over-year [2] - W.W. Grainger's stock has increased by approximately 8.6% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3] Earnings Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $10.49 for the upcoming quarter and $43.79 for the current fiscal year, with revenues expected to be $4.52 billion and $18.87 billion respectively [7] - The estimate revisions trend for W.W. Grainger was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market [6] Industry Context - The Industrial Services industry, to which W.W. Grainger belongs, is currently ranked in the bottom 21% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of W.W. Grainger's stock may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]