Core Insights - W.W. Grainger's third quarter results were influenced by inflation, tariff-related inventory costs, and operational execution focus [1] - Customer demand for maintenance and repair solutions remained steady, particularly in contractor and healthcare segments, with manufacturing customers showing improvement [1] - CEO emphasized the importance of inventory management for operational efficiency [1] Financial Performance - Revenue reached $4.66 billion, exceeding analyst estimates of $4.64 billion, reflecting a 6.1% year-on-year growth [6] - Adjusted EPS was $10.21, beating analyst expectations of $9.95 by 2.6% [6] - Adjusted EBITDA was $772 million, surpassing estimates of $739.3 million, with a margin of 16.6% [6] - The company slightly raised its full-year revenue guidance to $17.9 billion from $17.85 billion [6] - Operating margin decreased to 11% from 15.6% in the same quarter last year [6] - Organic revenue growth was 5.4% year-on-year, slightly below the 5.7% growth expected by analysts [6] Strategic Insights - CFO clarified that exiting the U.K. business would reduce fourth-quarter sales by $40 million but improve annual operating margin [6] - Gross margins are expected to stabilize near 39% as inflationary impacts recede, despite ongoing LIFO accounting headwinds [6] - The company is not considering switching from LIFO to FIFO accounting due to potential large tax implications [6] - CEO estimated a daily one-point impact on total sales from potential government shutdowns, with longer shutdowns posing greater risks [6] - Investments in AI applications are being made to enhance customer experience and operational efficiency [6]