W W Grainger : Q1 2026 Earnings Call

Published: 2026-05-07 08:15:23 ET GWW

Published on 05/07/2026 at 08:15 am EDT

NYSE: GWW

May 7, 2026

D.G. Macpherson

Chairman & CEO

Our Purpose

Our Principles

Our Aspiration

We relentlessly expand our leadership position by being the go-to partner for people who build and run safe, sustainable, and productive operations.

Focused execution driving results across the business

Delivered strong quarter of growth and profitability

Generated reported sales growth of 10.1% (12.2% in daily, organic constant currency)

Delivered diluted EPS of $11.65, up $1.79 or 18.2% versus prior year

Produced operating cash flow of $739 million

Returned $345 million to shareholders through dividends and share repurchases(1)

Announced quarterly dividend increase of 10%

Increasing FY 2026 outlook to reflect strong start and continued momentum

Sales

Operating Margin

EPS

(diluted)

ROIC

$$44..71BB

$146..71%B

$$141..16B5

4$44..01%B

Compared to Q1'25

+12.2%

(daily, organic constant currency)

+110 bps

+18.2%

+320 bps

Note: Results are consistent on a reported and an adjusted basis. See appendix for a reconciliation of any non-GAAP financial measures. Numbers may not sum due to rounding.

(1) Includes only share repurchases and dividends related to Grainger common stock.

Dee Merriwether

SVP & CFO

Commentary vs. Prior Year

Summary Results

($ in millions)

Sales

Daily Sales GP SG&A

EPS (diluted)

$ 11.65

$ 9.86

18.2%

(% of sales)

Q1 2026

Q1 2025

bps vs. PY

Fav/(Unfav)

GP Margin

40.0 %

39.7 %

SG&A

23.3 %

24.1 %

Op Margin

16.7 %

15.6 %

110

Op Earnings

Sales increased 10.1% (reported and daily)

12.2% sales growth on a daily, organic constant currency basis

Generated strong growth in HTS - N.A. and Endless

Assortment

Gross profit margin increased 30 bps

Expansion in both segments combined with benefit of

U.K. market exit

Operating margin increased 110 bps

Leverage in both segments combined with benefit of

U.K. market exit

Diluted EPS of $11.65, up 18.2% versus prior year

Q1 2026

4,742 $

75.3

Q1 2025

4,306

68.3

% vs. PY

Fav/(Unfav) 10.1%

10.1%

1,896

1,103

793

1,710

1,038

672

10.9%

(6.3)%

18.0%

Note: Results are consistent on a reported and adjusted basis. See appendix for a reconciliation of any non-GAAP financial measures. Numbers may not sum due to rounding.

Commentary vs. Prior Year

Summary Results

($ in millions)

Sales

Op Earnings

$ 688

$ 600

14.7%

(% of sales)

Q1 2026

Q1 2025

bps vs. PY

Fav/(Unfav)

GP Margin

42.6 %

42.4 %

SG&A

24.3 %

24.7 %

Op Margin

18.3 %

17.7 %

Daily Sales GP SG&A

Sales increased 10.5% (reported and daily)

Q1 2026

3,752 $

59.6

Q1 2025

3,397

53.9

% vs. PY

Fav/(Unfav) 10.5%

10.5%

1,599

911

1,439

839

11.1%

(8.6)%

10.0% sales growth on a daily, constant currency basis

Includes healthy price contribution and volume growth

Gross profit margin increased 20 bps

Positive mix and freight partially offset by the impact of annual Grainger Sales Meeting

Price / cost roughly neutral

Note: Continued LIFO inventory valuation headwind

Operating margin increased 60 bps

Higher payroll & benefits (inclusive of incentive-based compensation) and marketing investment more than offset by sales leverage

Note: Results are consistent on a reported and adjusted basis. See appendix for a reconciliation of any non-GAAP financial measures. Numbers may not sum due to rounding.

Commentary vs. Prior Year

Summary Results

($ in millions)

Sales

Op Earnings

$ 105

$ 72

45.8%

(% of sales)

Q1 2026

Q1 2025

bps vs. PY

Fav/(Unfav)

GP Margin

30.0 %

29.6 %

SG&A

19.4 %

20.9 %

150

Op Margin

10.6 %

8.7 %

190

Daily Sales GP SG&A

Sales increased 19.6%; up 21.9% on a daily,

Q1 2026

990 $

15.7

Q1 2025

828

13.1

% vs. PY

Fav/(Unfav) 19.6%

19.6%

297

192

245

173

21.2%

(11.0)%

organic constant currency basis

Zoro growth of 18.7% on a daily basis

MonotaRO growth of 24.3% in local days, local constant currency

Gross profit margin increased 40 bps

Benefit from discount strategy change and favorable

product mix at Zoro

Operating margin increased 190 bps

Gross margin flow through and top-line leverage across the segment

Note: Results are consistent on a reported and adjusted basis. See appendix for a reconciliation of any non-GAAP financial measures. Numbers may not sum due to rounding.

Dee Merriwether

SVP & CFO

Passed incremental price in January and took incremental cost in February, in line with normal cadence

January actions included response to previously-delayed tariff inflation as well as offsets to annually negotiated cost increases with suppliers

These actions are net of partial roll-back on certain Chinese tariffs announced in November 2025

Passed net neutral price in May as Section 122 tariffs largely offset IEEPA roll-back

Realized modest net tariff reductions on products directly imported by Grainger; working with

suppliers to assess further cost reduction opportunities

Not included in updated guide

Evaluating further inflationary pressures; will take pricing actions as warranted

Assessing impact of Section 232 tariff modifications (expect only minimal impact)

Monitoring for potential supply disruptions due to conflict in Middle East

Pursuing potential recovery of IEEPA tariffs paid directly by Grainger

Navigating tariff

and geopolitical cost pressures

YTD

Completed actions

Situation remains fluid; confident

in ability to manage impact while adhering to core pricing tenets

Looking

Ahead

Included in updated guide

Expecting fuel headwinds to persist; working with supply chain partners to minimize

Note: Commentary on timing of pricing actions related to High-Touch Solutions - U.S. business only.

2026 OUTLOOK

Raising

2026 Outlook

Updated guide includes:

Sales: continued strong execution

and improved MRO market demand

OM%: Q1'26 outperformance offset by anticipated cost pressures (e.g., fuel, incentive-based compensation)

Note:

Assumes no change to current effective tariff rates as of 5/6/2026

2025A 2026

Guidance

(as of May 7, 2026)

Sales ($ billions) $17.9 $19.2 - $19.6

Prior FY'26 Guidance $18.7 - $19.1

Gross Profit Margin 39.1% 39.2% - 39.5%

Prior FY'26 Guidance 39.2% - 39.5%

Adj. Operating Margin 15.0% 15.6% - 16.0%

Prior FY'26 Guidance 15.4% - 15.9%

Adj. EPS (diluted) $39.48 $44.25 - $46.25

Prior FY'26 Guidance $42.25 - $44.75

Y/Y change

6.7% to 9.1%

(9.5% to 12.0% daily, organic constant currency sales(1))

10 bps to 40 bps

60 bps to 100 bps

12.1% to 17.1%

Note: 2025 results and 2026 guidance are provided on an adjusted basis. The Company does not reconcile forward-looking non-GAAP financial measures. Updated 2026 Guidance assumes corporate effective tax rate of ~25% and JPY / USD FX rate of 158. Normalization of effective tax rate to ~25% driving ~130bps Y/Y headwind to 2026 EPS growth rate. Prior 2026 guidance as provided on Feb 3, 2026.

(1) Based on U.S. selling days. There are 255 selling days in both 2026 and 2025. See appendix for a reconciliation of any non-GAAP financial measures.

D.G. Macpherson

Chairman & CEO

HTS - Canada

HTS - U.S.

($ millions)

Sales

($ millions)

Sales

$3,495

$3,181

+9.9%

Daily

$184

$152

+21.3%

Daily

Gross Profit

+30 bps

42.8%

Q1'25

Q1'26

43.1%

Q1'25 Q1'26 Q1'25 Q1'26

Daily, constant currency sales in local days: +16.0%

Gross Profit

+80 bps

33.4%

Q1'25

Q1'26

34.2%

Note: Results are consistent on a reported and adjusted basis. See appendix for a reconciliation of any non-GAAP financial measures. Numbers may not sum due to rounding.

Zoro - U.S.

MonotaRO(1)

($ millions)

Sales

($ millions)

Sales

$589

$480

+22.7%

Daily

$402

$339

+18.7%

Daily

Gross Profit

+380 bps

37.7% 41.4%

Q1'21 Q1'22

Gross Profit

-10 bps

27.5%

Q1'25

Q1'26

Op. Margin

+90 bps

12.0%

Q1'25

Q1'26

12.9%

27.4%

Q1'25 Q1'26 Q1'25 Q1'26

Daily, constant currency sales in local days: +24.3%

Gross Profit

+70 bps

32.9%

Q1'25

Q1'26

Op. Margin

+210 bps

5.2%

Q1'25

Q1'26

7.3%

33.6%

Note: Results are consistent on a reported and adjusted basis. See appendix for a reconciliation of any non-GAAP financial measures. Numbers may not sum due to rounding.

(1) The Company has a controlling ownership interest in MonotaRO, which is part of our Endless Assortment segment. MonotaRO's results are fully consolidated, reflected in U.S. GAAP, and reported one-month in arrears. Results will differ from MonotaRO's externally reported financials, which follow Japanese GAAP.

Mid-sized Customers(1)

Large Customers(1)

14%

Q1'25

Q2'25

Q3'25

Q4'25

Q1'26

Q1'25

Q2'25

Q3'25

Q4'25

Q1'26

Note: FY'25 Large Customer daily sales growth was +1.9% Note: FY'25 Mid-size Customer daily sales growth was +5.4%

Note: See appendix for a reconciliation of any non-GAAP financial measures.

Large Customer revenue of $11.1 billion and Mid-sized Customer revenue of $1.9 billion for the last twelve-month (LTM) period ending March 31, 2026. These numbers exclude specialty brands and certain revenue recognition adjustments which are included in the HTS - U.S. business. Growth rates are presented on a daily basis and rounded to the nearest whole percentage.

Q1'26(1)

5 Quarter Trend

Commercial Services

UP Mid-Teens

Contractors

UP High-Teens

Government

UP High-Single Digits

Healthcare

UP High-Single Digits

Manufacturing

UP High-Single Digits

Retail

UP Mid-Teens

Transportation

UP High-Single Digits

Utilities

UP Mid-Teens

Warehousing

DOWN Mid-Teens

Wholesale

UP Mid-Single Digits

Other(2)

UP Mid-Teens

Q1'25 Q1'26

Note: See appendix for a reconciliation of any non-GAAP financial measures. Customer end market definitions primarily follow the North American Industry Classification System (NAICS). Numbers exclude specialty brands and certain revenue recognition adjustments which are included in the HTS - U.S. business.

Growth rates are presented on a daily basis in current customer end market alignment.

Includes industries that are not material individually, including hospitality, restaurants, property management and natural resources.

Total Active SKUs (Zoro U.S.)

Total Registered Users

+10%

(user count in thousands)

(SKU count in millions)

16,219 16,628

17,032 17,452 17,853

14.9

-13%

13.8

12.8

12.9

13.0

11,465

11,187

10,351

5,868

6,000

10,893

6,139

10,627

6,266

6,388

Near-term SKU reduction reflects optimization efforts to further improve the customer experience at Zoro

Q1'25

Q2'25

Q3'25

Q4'25

Q1'26

Q1'25 Q2'25 Q3'25 Q4'25 Q1'26

MonotaRO (1) Zoro - U.S.

Note: Numbers may not tie due to rounding. Registered user count excludes non-strategic accounts and channels.

(1) MonotaRO's results are reported one-month in arrears.

Disclaimer

W.W. Grainger Inc. published this content on May 07, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2026 at 12:14 UTC.