W.W. GRAINGER, INC. (GWW): GRAINGER REPORTS RESULTS FOR THE THIRD QUARTER 2026
W.W. GRAINGER, INC. (GWW) filed an SEC Form 8-K — Results of Operations and Financial Condition. GRAINGER REPORTS RESULTS FOR THE THIRD QUARTER 2026 Continued strong results across the business; Company increases full year 2026 earnings outlook Third Quarter Highlights • Delivered sales of $5.2 billion, up 11.3%, or 14.9% on a daily, organic constant currency basis • Achieve
How this was made
The 30-second read
Why it matters
The raised guidance reflects stronger sales and margins, likely supporting a positive price reaction.
Market read
The earnings beat and guidance raise make Grainger a focal point for industrial sector investors today.
What to watch
Potential headwinds from the recent exit of the U.K. market and currency volatility could temper upside.
Continued strong results across the business; Company increases full year 2026 earnings outlook
Third-quarter sales increased 11.3%, adjusted diluted EPS increased 22.8%, adjusted operating margin expanded 90 basis points, and the Company raised its full-year 2026 sales, earnings, cash flow and segment-margin outlooks.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, Q3 2026GAAP | $5.18B | – | 11.3% |
| Net sales, nine months ended September 30, 2026GAAP | $14.94B | – | – |
| Daily, organic constant currency sales growth, Q3 2026non-GAAP | 14.9% | – | 14.9% |
| Gross profit, Q3 2026GAAP | $2.01B | – | 11.8% |
| Gross profit, nine months ended September 30, 2026GAAP | $5.89B | – | – |
| Gross profit margin, Q3 2026GAAP | 38.8% | – | 20 bps |
| Adjusted gross profit margin, Q3 2026non-GAAP | 38.8% | – | 20 bps |
| Cost of goods sold, Q3 2026GAAP | $3.17B | – | – |
| Cost of goods sold, nine months ended September 30, 2026GAAP | $9.05B | – | – |
| Selling, general and administrative expenses, Q3 2026GAAP | $1.18B | – | – |
| Selling, general and administrative expenses, nine months ended September 30, 2026GAAP | $3.46B | – | – |
| Operating earnings, Q3 2026GAAP | $828M | – | 62.0% |
| Adjusted operating earnings, Q3 2026non-GAAP | $836M | – | 18.2% |
| Operating earnings, nine months ended September 30, 2026GAAP | $2.43B | – | – |
| Operating margin, Q3 2026GAAP | 16.0% | – | 500 bps |
| Adjusted operating margin, Q3 2026non-GAAP | 16.1% | – | 90 bps |
| Net earnings attributable to W.W. Grainger, Inc., Q3 2026GAAP | $587M | – | 99.7% |
| Adjusted net earnings attributable to W.W. Grainger, Inc., Q3 2026non-GAAP | $593M | – | 21.0% |
| Net earnings attributable to W.W. Grainger, Inc., nine months ended September 30, 2026GAAP | $1.71B | – | – |
| Diluted earnings per share, Q3 2026GAAP | $12.42 | – | 102.9% |
| Adjusted diluted earnings per share, Q3 2026non-GAAP | $12.54 | – | 22.8% |
| Basic earnings per share, Q3 2026GAAP | $12.43 | – | – |
| Diluted earnings per share, nine months ended September 30, 2026GAAP | $36.08 | – | – |
| Effective tax rate, Q3 2026GAAP | 24.3% | – | 1,040 bps |
| Adjusted effective tax rate, Q3 2026non-GAAP | 24.3% | – | 50 bps |
| Cash flow from operating activities, Q3 2026GAAP | $661M | – | – |
| Free cash flow, Q3 2026non-GAAP | $546M | – | – |
| Capital expenditures, Q3 2026GAAP | −$115M | – | – |
| Cash flow from operating activities, nine months ended September 30, 2026GAAP | $1.84B | – | – |
| Capital expenditures, nine months ended September 30, 2026GAAP | −$396M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| High-Touch Solutions - N.A.Double-digit volume growth and continued price inflation as cost increases were passed. | Not reported | – | 13.8% on both a reported and daily, constant currency basis |
| Endless AssortmentStrong performance at both MonotaRO and Zoro. | Not reported | – | 11.9% reported sales growth; 19.3% daily, organic constant currency sales growth |
2026 Updated Guidance Range (as of November 4, 2026), adjusted basis outlook
- Revenue$19.8 - $20.0 billion
- Gross margin39.4% - 39.6%
- Tax rate~24.7%
- NoteSales growth: 10.1% - 11.6%
- NoteDaily, organic constant currency sales growth: 13.0% - 14.5%
- NoteGross Profit Margin vs Prior Year: 30 bps to 45 bps
- NoteOperating Margin: 16.0% - 16.2%
- NoteOperating Margin vs Prior Year: 100 bps to 120 bps
- NoteDiluted Earnings per Share: $47.00 - $48.00
- NoteOperating Cash Flow: $2.35 - $2.45 billion
- NoteCapEx (cash basis): $0.575 - $0.625 billion
- NoteShare Buyback: $0.975 - $1.025 billion
- NoteHigh-Touch Solutions - N.A. segment operating margin: 17.3% - 17.5%
- NoteEndless Assortment segment operating margin: 10.9% - 11.1%
Capital returns
- Returned $396 million to Grainger shareholders through dividends and share repurchases during the third quarter of 2026.
- Purchases of treasury stock were $(278) million during the third quarter of 2026, compared to $(291) million during the third quarter of 2025.
- Cash dividends paid were $(145) million during the third quarter of 2026, compared to $(133) million during the third quarter of 2025.
- Purchases of treasury stock were $(739) million during the nine months ended September 30, 2026, compared to $(798) million during the nine months ended September 30, 2025.
- Cash dividends paid were $(398) million during the nine months ended September 30, 2026, compared to $(358) million during the nine months ended September 30, 2025.
What drove it
- Total Company sales increased 11.3%, while daily, organic constant currency sales increased 14.9%.
- High-Touch Solutions - N.A. growth was driven by double-digit volume growth and continued price inflation as cost increases were passed.
- Endless Assortment growth was driven by strong performance at both MonotaRO and Zoro.
- Gross profit margin expansion was driven by expansion across Endless Assortment and a benefit related to the Company's exit from the U.K. market.
- Adjusted operating-margin expansion was driven by sales leverage in both segments and a benefit related to the Company's exit from the U.K. market.
- Adjusted diluted EPS growth reflected strong operating performance, fewer shares outstanding, and a lower effective tax rate.
Concerns
- High-Touch Solutions - N.A. gross profit margin was 40.8%, down 30 basis points compared to the prior year quarter due to unfavorable freight expense and mix.
- Reported year-over-year earnings comparisons include the prior-year loss related to the Company's exit from the U.K. market, including the sale of Cromwell and closure of Zoro U.K.
- The Company incurred $8 million of transaction costs associated with the acquisition of technology assets from Adroit Worldwide Media, Inc. in the third quarter of 2026.
- Accounts receivable were $2,877 million as of September 30, 2026, compared to $2,329 million as of December 31, 2025.
What to watch
- Delivery against updated 2026 net sales guidance of $19.8 - $20.0 billion and daily, organic constant currency sales growth guidance of 13.0% - 14.5%.
- Delivery against updated diluted earnings per share guidance of $47.00 - $48.00.
- High-Touch Solutions - N.A. margin performance relative to updated segment operating-margin guidance of 17.3% - 17.5%, following the third-quarter gross-margin decline.
- Endless Assortment performance relative to updated segment operating-margin guidance of 10.9% - 11.1%.
- Operating cash flow relative to updated guidance of $2.35 - $2.45 billion and share buyback relative to guidance of $0.975 - $1.025 billion.
Balance sheet and cash flow
- Cash and cash equivalents were $768 million as of September 30, 2026, compared to $585 million as of December 31, 2025.
- Current maturities were $227 million as of September 30, 2026, compared to $126 million as of December 31, 2025.
- Long-term debt was $2,458 million as of September 30, 2026, compared to $2,362 million as of December 31, 2025.
- Accounts receivable were $2,877 million as of September 30, 2026, compared to $2,329 million as of December 31, 2025.
- Inventories were $2,303 million as of September 30, 2026, compared to $2,394 million as of December 31, 2025.
- Cash paid for business acquisition was $(215) million during the third quarter of 2026 and $(215) million during the nine months ended September 30, 2026.
- Net cash used in investing activities was $(334) million during the third quarter of 2026, compared to $(260) million during the third quarter of 2025.
- Net cash used in financing activities was $(153) million during the third quarter of 2026, compared to $(398) million during the third quarter of 2025.
Analysis
Grainger reported a strong third quarter, with net sales of $5,181 million, up 11.3%, and daily, organic constant currency sales growth of 14.9%. Demand was broad across both operating segments. High-Touch Solutions - N.A. sales increased 13.8%, supported by double-digit volume growth and price inflation, while Endless Assortment reported sales growth of 11.9% and daily, organic constant currency sales growth of 19.3%, led by MonotaRO and Zoro.
Profitability improved on both reported and adjusted measures. Gross profit margin was 38.8%, up 20 basis points, while adjusted operating margin was 16.1%, up 90 basis points. Management cited Endless Assortment expansion, sales leverage in both segments, and a benefit related to the U.K. market exit. High-Touch Solutions - N.A. was the exception on gross margin: segment gross margin was 40.8%, down 30 basis points because of unfavorable freight expense and mix.
Reported earnings growth was amplified by the prior-year U.K. exit loss. Reported operating earnings were $828 million, up 62.0%, and reported diluted EPS was $12.42, up 102.9%. On an adjusted basis, operating earnings were $836 million, up 18.2%, and diluted EPS was $12.54, up 22.8%. The adjusted EPS increase reflected strong operating performance, fewer shares outstanding, and a lower effective tax rate. The adjusted effective tax rate was 24.3%, compared with 24.8% in the prior-year period, primarily due to additional tax credit benefits.
Cash generation remained substantial. Operating cash flow was $661 million, capital expenditures were $(115) million, and free cash flow was $546 million. The Company returned $396 million through dividends and share repurchases during the quarter. Cash and cash equivalents were $768 million as of September 30, 2026, while long-term debt was $2,458 million.
The full-year guide was increased across major operating and financial measures. Updated adjusted guidance calls for net sales of $19.8 - $20.0 billion, diluted EPS of $47.00 - $48.00, operating cash flow of $2.35 - $2.45 billion, and adjusted operating margin of 16.0% - 16.2%. The guide also raises expected Endless Assortment operating margin to 10.9% - 11.1% and High-Touch Solutions - N.A. operating margin to 17.3% - 17.5%, placing attention on sustaining organic growth and margin leverage while managing freight and mix pressure in High-Touch Solutions - N.A.
Management, verbatim
The third quarter performance reflects our consistent execution and an improving demand environment. As customers continue to turn to us for the products and solutions they need, both our High-Touch Solutions and Endless Assortment segments delivered impressive growth. Following another quarter of strong performance, we are increasing our 2026 guidance and remain on track for an exceptional year.
D.G. Macpherson, Chairman and CEO
Not in the filing
stated, not guessed- Dollar revenue for High-Touch Solutions - N.A. was not reported.
- Dollar revenue for Endless Assortment was not reported.
- Segment operating earnings were not reported.
- Segment operating-margin actual results for the third quarter of 2026 were not reported.
- Free cash flow for the third quarter of 2025 was not reported.
- Dividend per share was not reported.
- Prior-quarter values and sequential comparisons for reported metrics were not reported.
- Full-year 2026 actual results are not available; therefore, the updated full-year guidance cannot be compared with full-year actual results.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Grainger (NYSE:GWW) filed a Form 8‑K reporting Q3 2026 results and updating its full‑year guidance.
Ticker impact
Grainger raised its full-year 2026 earnings outlook to a diluted adjusted EPS range of $47.00-$48.00.
likely upward pressure as the market prices in the raised guidance
The 8‑K filing reports higher sales growth, improved margins and a higher EPS outlook, which typically drives buying interest.
Market effects
Industrial distribution sector may see a lift as Grainger's strong performance sets a positive tone.
U.S. equities could benefit from the upbeat earnings outlook from a large-cap distributor.
Limited to U.S. markets; no direct global ripple expected.
Counterpoint
If the market has already priced in the guidance raise, the stock could face a short‑term pullback.
Key entities
- companyW.W. Grainger, Inc.
Industrial supplies distributor reporting Q3 results and updated guidance.
