Graco(US:GGG)2026-01-26 21:12Financial Performance - Net sales for Q4 2025 increased by 8% to $593.2 million compared to $548.7 million in Q4 2024, while full-year net sales rose by 6% to $2,236.6 million from $2,113.3 million[2]. - Operating earnings for Q4 2025 were $158.6 million, a 22% increase from $130.0 million in Q4 2024, and full-year operating earnings increased by 10% to $624.8 million from $570.1 million[2]. - Net earnings for Q4 2025 rose by 22% to $132.5 million, compared to $108.7 million in Q4 2024, with full-year net earnings increasing by 7% to $521.8 million from $486.1 million[2]. - Adjusted net earnings for the twelve months ended December 27, 2025, were $498.8 million, up from $477.1 million in 2024, indicating a growth of 4.0%[26]. - The diluted earnings per share for the twelve months ended December 27, 2025, were $3.08, compared to $2.82 in 2024, marking an increase of 9.2%[26]. - Operating earnings for the twelve months ended December 26, 2025, were $624.797 million, up from $570.098 million in 2024, reflecting a 9.6% year-over-year growth[28]. - Net earnings for the year ended December 26, 2025, were $521.839 million, compared to $486.084 million in 2024, representing a 7.4% increase[31]. Sales Growth - The Contractor segment achieved an 8% increase in net sales for Q4 2025, while the Industrial segment saw an 11% increase, contributing to overall growth[10]. - Acquired operations contributed $21 million to Q4 sales growth and $113 million for the full year, with currency translation effects adding $11 million for Q4 and $13 million for the year[5]. - Total net sales for the three months ended December 26, 2025, reached $593.156 million, a 8.1% increase from $548.672 million for the same period in 2024[28]. Profitability Metrics - The gross profit margin rate increased by approximately 1 percentage point for Q4 2025, driven by price realization that offset higher product costs, while it decreased by 1 percentage point for the full year[6]. - Gross profit for the twelve months ended December 27, 2025, was $1,173.2 million, compared to $1,122.5 million in 2024, showing an increase of 4.5%[26]. - Operating expenses decreased by 1% for both Q4 and the full year, with litigation and business reorganization costs from the previous year not repeating[7]. Taxation - The effective income tax rate was 19% for both Q4 and the full year, with an adjusted effective income tax rate of 21% for Q4 and 20% for the year, remaining flat compared to the previous year[9]. - The effective income tax rate as reported for the twelve months ended December 27, 2025, was 18.6%, slightly up from 17.5% in 2024[26]. Future Outlook - For 2026, the company is guiding low single-digit organic sales growth on a constant-currency basis and mid-single-digit sales growth including acquisitions[16]. - The company remains optimistic about its acquisition pipeline and plans to focus on product innovation and strategic acquisitions in its 100th year[15]. Cash Flow and Investments - Cash and cash equivalents at the end of the year decreased to $624.083 million from $675.336 million, a decline of 7.6%[31]. - Cash flows from operating activities for the year were $683.591 million, an increase from $621.700 million in 2024, reflecting a 9.9% growth[31]. - The company invested $135.262 million in acquisitions during the year, compared to $241.767 million in 2024, indicating a strategic shift in investment focus[31]. - Common stock repurchased amounted to $423.108 million, significantly higher than $31.350 million in the previous year, reflecting a strong commitment to returning value to shareholders[31]. Assets and Liabilities - The company reported a significant increase in goodwill, rising to $585.304 million from $487.468 million, indicating growth through acquisitions[30]. - Total assets increased to $3,274.270 million in 2025 from $3,139.212 million in 2024, marking a growth of 4.3%[30]. - The company’s total current liabilities rose to $467.261 million in 2025, up from $405.808 million in 2024, an increase of 15.1%[30]. Investor Engagement - The company plans to hold a conference call on January 27, 2026, to discuss fourth quarter results, indicating ongoing engagement with investors[22]. Risk Factors - The company emphasizes the importance of various risk factors that could impact future results, including demand fluctuations and inflationary pressures[20].