Grainger(US:GWW)2025-10-31 20:13Financial Performance - Net sales for Q3 2025 reached $4,657 million, a 6.1% increase from $4,388 million in Q3 2024[10] - Gross profit for the nine months ended September 30, 2025, was $5,263 million, compared to $5,082 million for the same period in 2024, reflecting a 3.6% increase[10] - Operating earnings decreased to $511 million in Q3 2025 from $686 million in Q3 2024, representing a decline of 25.5%[10] - Net earnings attributable to W.W. Grainger, Inc. for the nine months ended September 30, 2025, were $1,255 million, down from $1,434 million in 2024, a decrease of 12.5%[10] - For the three months ended September 30, 2025, net earnings attributable to W.W. Grainger, Inc. were $490 million, a decrease of 39.5% compared to the prior year[113] - Diluted earnings per share were $6.12, a decrease of 38% from $9.87 in the same period last year[74] - Diluted earnings per share for the nine months ended September 30, 2025, was $25.97, a decrease of 10% compared to $29.00 in 2024, while adjusted diluted earnings per share increased by 3%[93] Cash and Liquidity - Cash and cash equivalents decreased to $535 million as of September 30, 2025, from $1,036 million at the end of 2024[15] - The company reported a net cash provided by operating activities of $1,620 million for the nine months ended September 30, 2025, compared to $1,683 million in 2024[18] - The company maintains a liquidity position with approximately $1.8 billion available as of September 30, 2025[118] Shareholder Equity and Dividends - Total shareholders' equity increased to $3,961 million as of September 30, 2025, from $3,703 million at the end of 2024[15] - The company paid cash dividends of $358 million during the nine months ended September 30, 2025, compared to $321 million in 2024[18] - A quarterly dividend of $2.26 per share was declared on October 29, 2025, payable on December 1, 2025, to shareholders of record on November 10, 2025[55] Capital Expenditures and Investments - Capital expenditures for the nine months ended September 30, 2025, were $558 million, significantly higher than $283 million in 2024[18] - The company issued $2.8 billion in unsecured debt (Senior Notes) between 2015 and 2024 to support working capital needs and long-term cash requirements[41] - MonotaRO entered into ¥9 billion term loan agreements in June 2025 and an additional ¥4 billion term loan in September 2025 to fund the expansion of its distribution center network[43][44] Revenue Breakdown - For the three months ended September 30, 2025, total net sales were distributed as follows: Manufacturing 30%, Government 20%, Wholesale 7%, and Other industries contributing to 10%[33] - The total company revenue for the three months ended September 30, 2025, was composed of 78% from High-Touch Solutions N.A. and 20% from Endless Assortment[33] - High-Touch Solutions N.A. segment net sales were $3,635 million, an increase of $120 million or 3.4% compared to 2024, driven primarily by volume[76] - Endless Assortment segment net sales reached $935 million, an increase of $144 million or 18.2%, attributed to repeat business and enterprise customer growth[80] Operating Expenses - Selling, general and administrative (SG&A) expenses increased to $1,287 million, a rise of $253 million or 24.5% compared to the prior year, primarily due to higher marketing expenses[71] - SG&A expenses increased to $3,402 million, up $324 million, or 11%, with adjusted SG&A expenses of $3,206 million, an increase of $144 million, or 5%[90] Asset Management - Total assets increased slightly to $8,848 million as of September 30, 2025, compared to $8,829 million at the end of 2024[15] - Total assets held for sale as of September 30, 2025, amounted to $50 million, while total liabilities held for sale were $82 million[30] - As of September 30, 2025, total property, buildings, and equipment amounted to $4,447 million, with a net value of $2,237 million after accumulated depreciation[36] Impairments and Market Conditions - The company recorded an asset impairment loss of $186 million related to the planned sale of its Cromwell business in the U.K.[29] - The company did not identify any significant events indicating impairment indicators for goodwill during the reporting periods[37] - Grainger's forward-looking statements are subject to various risks and uncertainties, including inflation and competitive pricing pressures[132] Corporate Governance - Grainger's disclosure controls and procedures were evaluated as effective by the Chief Executive Officer and Chief Financial Officer[136] - There were no changes in Grainger's internal control over financial reporting that materially affected its effectiveness for the quarter ended September 30, 2025[137] - The Executive Severance Plan and Executive Change in Control Severance Plan will become effective as of December 31, 2025[145]