Grainger(US:GWW)2025-10-31 12:07Financial 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]