Grainger(US:GWW) ZACKS·2025-10-31 18:37Core Insights - W.W. Grainger, Inc. reported Q3 2025 EPS of $10.21, exceeding the Zacks Consensus Estimate of $9.93, marking a 3.4% year-over-year increase driven by strong performance in High-Touch Solutions N.A. and Endless Assortment segments [1][10] - Quarterly revenues increased by 6.1% year-over-year to $4.66 billion, surpassing the Zacks Consensus Estimate of $4.64 billion, with daily sales also rising by 6.1% [2][10] Segment Performance - High-Touch Solutions N.A. segment's daily sales grew by 3.4% year-over-year, supported by volume growth and improved pricing, aligning closely with the predicted organic daily sales growth of 3.2% [3] - Endless Assortment segment saw a significant daily sales increase of 18.2%, driven by strong performances from MonotaRO and Zoro, outperforming the predicted organic daily sales growth of 15.4% [4] Operational Metrics - Cost of sales rose by 7.2% year-over-year to $2.86 billion, while gross profit increased by 4.5% to $1.8 billion, resulting in a gross margin of 38.6%, down from 39.2% in the prior year [5] - Selling, general and administrative expenses surged by 24.5% year-over-year to $1.29 billion, leading to a 25.5% decline in operating income to $511 million, with an operating margin of 15.2% compared to 15.6% in the previous year [5] Cash Flow and Balance Sheet - At the end of Q3 2025, cash and cash equivalents stood at $0.54 billion, down from $1.04 billion at the end of 2024, with cash flow from operating activities reported at $597 million, slightly lower than $611 million in the prior year [6] - Long-term debt increased to $2.34 billion as of September 30, 2025, from $2.28 billion at the end of 2024, with $399 million returned to shareholders through dividends and share buybacks during the quarter [7] 2025 Outlook - Grainger updated its 2025 outlook, expecting net sales between $17.8 billion and $18.0 billion, revised down from the previous estimate of $17.9 billion to $18.2 billion, with anticipated sales growth of 3.9% to 4.7% [8] - EPS guidance for 2025 is now set at $39.00 to $39.75, compared to the earlier range of $38.50 to $40.25 [8] Stock Performance - Over the past year, Grainger's shares have declined by 12.8%, contrasting with a 4.9% decline in the industry [9]