Graco's Earnings Match Estimates in Q4, Sales Increase Y/Y

Core Insights - Graco Inc.'s fourth-quarter 2025 adjusted earnings were 77 cents per share, matching the Zacks Consensus Estimate, with a year-over-year increase of 20% [1][10] - The company's net sales reached $593.2 million, exceeding the consensus estimate of $585 million, and reflecting an 8% year-over-year growth driven by acquisitions and sales growth across various regions [1][10] Sales Performance - Sales from the Americas increased by 5% year over year, while Europe, the Middle East, and Africa (EMEA) saw a 15% increase, and Asia Pacific sales rose by 11% year over year [2] - The Contractor segment generated net sales of $265.5 million, accounting for 44.8% of total sales, with an 8% year-over-year increase [4] - The Industrial segment reported net sales of $284.3 million, contributing 47.9% to total sales, marking an 11% year-over-year increase [5] - The Expansion Markets segment had net sales of $43.4 million, representing 7.3% of total sales, but experienced a 6% year-over-year decline [6] Margin and Income - Graco's cost of sales rose by 6.3% year over year to $286.5 million, while gross profit increased by 9.8% to $306.5 million, resulting in a gross margin of 51.7%, up 80 basis points year over year [7] - Operating income increased by 22% year over year to $158.6 million, with the operating margin rising by 300 basis points to 26.7% [8] Financial Position - At the end of the fourth quarter, Graco had cash and cash equivalents of $624.1 million, down from $675.3 million at the end of 2024 [9] - The company generated net cash of $683.6 million from operating activities in 2025, compared to $621.7 million in the previous year [9] - Graco paid out dividends totaling $183.4 million, a 6.6% increase from the previous year, and repurchased shares worth $423.1 million [11] Future Outlook - For 2026, the company anticipates organic sales growth in the low single digits on a constant-currency basis, with overall sales expected to grow in the mid-single digits, including acquisitions [12]