Q3 2025 Performance - Sales increased by 6.1% to $4657 million compared to $4388 million in Q3 2024 [20] - Daily sales also increased by 6.1% to $728 million [20] - Diluted EPS increased by 3.4% to $1021 [20] - Operating margin decreased by 40 bps to 152% [20] Segment Performance - High-Touch Solutions N A sales increased by 34% to $3635 million [25] - Endless Assortment sales increased by 182% to $935 million [29] - Zoro U S daily sales grew by 178% [31] Guidance and Outlook - The company is narrowing its FY 2025 earnings outlook [16] - Full year sales guidance is $178 billion to $180 billion, representing a 39% to 47% increase [52] - The company anticipates annual Total Company GP% run-rate will stabilize at ~39% as tariff landscape normalizes [40, 47] - Adjusted EPS (diluted) is expected to be $3900 - $3975, a 01% to 20% increase [52]

Core Insights - W.W. Grainger reported quarterly earnings of $10.21 per share, exceeding the Zacks Consensus Estimate of $9.93 per share, and showing an increase from $9.87 per share a year ago, resulting in an earnings surprise of +2.82% [1][2] - The company achieved revenues of $4.66 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.33% and up from $4.39 billion year-over-year [2] - W.W. Grainger's stock has underperformed the market, losing about 9.3% since the beginning of the year compared to the S&P 500's gain of 16% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $9.73 on revenues of $4.53 billion, while for the current fiscal year, the estimate is $39.51 on revenues of $18.03 billion [7] - The trend of estimate revisions for W.W. Grainger was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Industrial Services industry, to which W.W. Grainger belongs, is currently ranked in the bottom 26% of over 250 Zacks industries, suggesting that the outlook for the industry can significantly impact the stock's performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Sales for Q3 2025 were $4.7 billion, an increase of 6.1% compared to Q3 2024, or 5.4% on a daily, constant currency basis[3] - Adjusted diluted EPS for Q3 2025 was $10.21, up 3.4% from Q3 2024, while reported diluted EPS was $6.12, down 38.0%[4] - Operating earnings for Q3 2025 were $511 million, down 25.5% compared to Q3 2024, with an operating margin of 11.0%[10] - Net earnings attributable to W.W. Grainger, Inc. for Q3 2025 were $294 million, down from $486 million in Q3 2024, a decrease of 39.5%[23] - For Q3 2025, reported net earnings attributable to W.W. Grainger, Inc. were $490 million, a decrease of 39.5% year-over-year[42] - Net earnings for Q3 2025 were $517 million, down from $505 million in Q3 2024, indicating a year-over-year decline of 36.4%[42] Cash Flow and Investments - Operating cash flow generated in Q3 2025 was $597 million, with $399 million returned to shareholders through dividends and share repurchases[13] - The company plans to invest $258 million in capital expenditures, resulting in free cash flow of $339 million for the quarter[13] - Free cash flow for Q3 2025 was $339 million, calculated as net cash provided by operating activities of $597 million minus capital expenditures of $258 million[40] Guidance and Projections - The company updated its full year 2025 guidance, narrowing adjusted diluted EPS range to $39.00 to $39.75[4] - The updated guidance for net sales in 2025 is now $17.8 to $18.0 billion, down from the previous range of $17.9 to $18.2 billion[15] Profitability Metrics - Gross profit margin for Q3 2025 was 38.6%, a decrease of 60 basis points from Q3 2024[8] - Gross profit for Q3 2025 was $1.798 billion, up from $1.720 billion in Q3 2024, reflecting a gross margin improvement[23] - Operating earnings decreased to $511 million in Q3 2025 from $686 million in Q3 2024, indicating a decline of 25.5%[23] - SG&A expenses for Q3 2025 were $1,091 million, representing 27.6% of net sales, compared to 23.6% in Q3 2024[42] - Operating earnings for Q3 2025 were $707 million, with an adjusted operating margin of 15.2%, down from 15.6% in Q3 2024[42] Tax and Liabilities - The effective tax rate for Q3 2025 was 34.7%, up from 24.8% in Q3 2024, primarily due to losses from the planned divestiture of the Cromwell business[12] - The effective tax rate for Q3 2025 was 34.7%, with an adjusted effective tax rate of 24.8%[42] - Total liabilities as of September 30, 2025, were $4.887 billion, compared to $5.126 billion at the end of 2024, indicating a reduction in liabilities[25] Market Segments - In the High-Touch Solutions - N.A. segment, sales increased by 3.4% compared to Q3 2024, while the Endless Assortment segment saw an 18.2% increase[7] Asset Management - Total current assets as of September 30, 2025, were $5.474 billion, a decrease from $5.737 billion at the end of 2024[25] - The company’s cash and cash equivalents at the end of Q3 2025 were $535 million, down from $1.036 billion at the beginning of the period[27] Other Considerations - The company recorded an asset impairment loss related to its intention to exit the U.K. market, including the planned divestiture of the Cromwell business[42] - Other expenses for Q3 2025 included a net expense of $19 million, consistent with the previous year[42] - The company plans to continue its market expansion efforts while managing costs effectively in light of recent performance[42] - The company reported a total of 64 selling days in both Q3 2025 and Q3 2024, maintaining consistent sales opportunities[39] - There were no non-GAAP adjustments for the three months ended September 30, 2024[42]

Core Viewpoint - Grainger reported solid third-quarter results for 2025, with sales increasing by 6.1% year-over-year, and adjusted diluted EPS rising by 3.4%. The company is focused on navigating uncertainties through strong execution and innovative capabilities while updating its full-year earnings outlook. Financial Performance - Sales for Q3 2025 reached $4.7 billion, a 6.1% increase from Q3 2024, or 5.4% on a daily, constant currency basis [1][3] - Gross profit was $1.798 billion, up 4.5% compared to the previous year [2] - Operating earnings reported at $511 million, down 25.5% year-over-year, with an adjusted operating earnings of $707 million, up 3.1% [6][2] - Net earnings attributable to Grainger were $294 million, a decrease of 39.5% from the prior year [2][30] - Diluted EPS was $6.12 on a reported basis, down 38.0%, while adjusted diluted EPS was $10.21, up 3.4% [7][30] Segment Performance - High-Touch Solutions - N.A. segment sales increased by 3.4% on both a daily and constant currency basis [4] - Endless Assortment segment saw sales growth of 18.2%, or 14.6% on a daily, constant currency basis, driven by strong performance at MonotaRO and Zoro [4] Profitability Metrics - Gross profit margin for Q3 2025 was 38.6%, a decrease of 60 basis points from Q3 2024 [5] - Operating margin reported at 11.0%, down 460 basis points, while adjusted operating margin was 15.2%, down 40 basis points [6] Tax and Cash Flow - Effective tax rate for Q3 2025 was 34.7%, up from 24.8% in Q3 2024, primarily due to losses from the planned divestiture of the Cromwell business [8] - Generated $597 million in cash flow from operating activities, with free cash flow of $339 million after $258 million in capital expenditures [9][28] Guidance Update - The company updated its full-year 2025 guidance, narrowing the adjusted diluted EPS range to $39.00 to $39.75, and adjusting net sales expectations to $17.8 - $18.0 billion [11][12]

Core Viewpoint - W.W. Grainger, Inc. is experiencing a downward trend in stock price targets despite reporting a revenue increase, indicating a cautious outlook from analysts regarding the company's future earnings potential [2][3][6] Financial Performance - GWW reported a 5.6% increase in second-quarter revenue, demonstrating a strong market position and effective business strategies [4][6] - However, the company's earnings for the second quarter fell short of expectations, prompting analysts to adjust their forecasts [4] Analyst Sentiment - The consensus price target for GWW has decreased from $1,031 last year to $963 last month, with Wells Fargo setting a notably lower target of $475 [2][6] - JPMorgan revised its price target for GWW from $1,125 to $1,035 while maintaining a Neutral rating on the shares, reflecting a cautious outlook on the company's future earnings potential [3][6]

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Core Insights - W.W. Grainger, Inc. (GWW) is set to report its third-quarter 2025 results on October 31, with sales estimated at $4.64 billion, reflecting a 5.8% year-over-year growth, and earnings per share (EPS) projected at $9.93, indicating a 0.6% increase from the previous year [1][5] Financial Estimates - The Zacks Consensus Estimate for GWW's sales is $4.64 billion, which represents a 5.8% growth compared to the same quarter last year [1] - The earnings estimate for GWW is $9.93 per share, although this has decreased by 2.2% over the past 60 days [1][6] - Historical earnings surprise shows GWW has beaten estimates in one of the last four quarters, with an average surprise of 0.6% [2][3] Segment Performance - GWW's High-Touch Solutions North America segment is expected to show strong growth, benefiting from commercial, transportation, and heavy manufacturing sectors, with projected sales of $3.63 billion, indicating a 3.2% increase from the previous year [8][9] - The Endless Assortment segment is anticipated to grow significantly, with a projected sales increase of 15.4% year-over-year, reaching $913 million, driven by customer acquisition and repeat business [10] Cost Considerations - GWW has been facing elevated material and freight costs, along with increased operating expenses and higher selling, general, and administrative (SG&A) costs due to technology investments, which may negatively impact profit margins [11] Stock Performance - Over the past year, GWW's stock has declined by 11.6%, contrasting with a 3.1% decline in the industry [12]

Core Insights - Grainger has entered into a definitive agreement to sell its U.K.-based Cromwell business to AURELIUS, a global private equity investor, as part of its strategy to focus on North America and Japan [1][2] - The company plans to close its Zoro U.K. business, pending legal and regulatory consultations [1] - Grainger anticipates a one-time, non-cash after-tax loss of $190 million to $205 million related to the exit from the U.K. market, primarily recorded in Q3 2025 [2] Company Strategy - Grainger aims to concentrate its portfolio on regions where it can achieve the greatest long-term impact, specifically North America and Japan [2] - The company is committed to driving profitable growth through its High-Touch Solutions model in North America and Endless Assortment businesses in the U.S. and Japan [2] Financial Performance - Grainger reported 2024 revenue of $17.2 billion, serving over 4.5 million customers worldwide with MRO products [3]

Core Insights - UBS anticipates that W.W. Grainger (NYSE:GWW) will exhibit stronger pricing trends in Q3, although overall growth may lag behind that of its industrial distribution competitors [4]. Pricing Trends - According to UBS's U.S. MRO Distributor price monitor, GWW's pricing is reported to be increasing [4].

Core Insights - W.W. Grainger, Inc. (NYSE:GWW) is recognized as one of the best value dividend stocks to buy now, highlighting its strong market position and investment appeal [1] - The company has experienced significant stock growth, with an increase of over 82% in the past three years, indicating robust performance in the industrial supply sector [2] Company Overview - W.W. Grainger is a leading distributor of industrial supplies, safety equipment, and MRO solutions, catering to over 4.5 million customers globally, ranging from small businesses to large corporations [2] - The company's strategy emphasizes enhancing technology and supply chain efficiency, with substantial investments in eProcurement platforms and system reliability [3] Financial Performance - W.W. Grainger has a strong dividend policy, currently offering a quarterly dividend of $2.26 per share, resulting in a dividend yield of 0.94% as of September 26 [4] - The company is recognized as a Dividend King, having achieved 54 consecutive years of dividend growth, showcasing its commitment to returning value to shareholders [4]