10-Q · August 4, 2026
Grainger delivered a strong Q2, with revenue up 10.3% to $5.021 billion, operating margin expanding 120 bps to 16.1%, and diluted EPS rising 20.5% to $12.01. Both operating segments posted double-digit sales growth,…
Earnings analysis · 10-Q
GWW earnings analysis
Filed November 4, 2026 · Our reading of the company's report
The latest report
Grainger delivered a strong third quarter, with revenue of $5.181 billion up 11.3% year over year, reported diluted EPS of $12.42 versus $6.12, and operating margin of 16.0% versus 11.0%. Both reportable segments grew,…
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Grainger delivered a strong third quarter, with revenue of $5.181 billion up 11.3% year over year, reported diluted EPS of $12.42 versus $6.12, and operating margin of 16.0% versus 11.0%. Both reportable segments grew, while nine-month operating cash flow rose to $1.844 billion and implied cash flow less capital expenditures was approximately $1.448 billion. Offsetting concerns include a sequential 10-basis-point operating-margin decline, working-capital absorption, higher debt, currency pressure and continued tariff, freight and macroeconomic uncertainty.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $12.42
What stood out
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Strong sales and EPS growth
Third-quarter net sales were $5.181 billion, up 11.3% year over year and 3.2% sequentially from $5.02 billion in Q2 2026. Reported diluted EPS was $12.42 versus $6.12 a year ago and $12.01 in Q2 2026; adjusted diluted EPS was $12.54, up 22.8% year over year.
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Operating leverage improved
Gross profit increased 11.8% year over year to $2.011 billion, and gross margin expanded 20 basis points to 38.8% from 38.6%. Operating earnings rose 62.0% to $828 million, with operating margin improving to 16.0% from 11.0% a year ago, although margin was 10 basis points below Q2 2026.
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Broad-based segment growth
Both reportable segments grew: High-Touch Solutions N.A. revenue increased 13.8% to $4.135 billion, while Endless Assortment revenue increased 11.9% to $1.046 billion. Endless Assortment operating earnings rose 48.8% to $122 million, supported by a 90-basis-point gross-margin increase to 31.0%.
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Robust cash generation
Nine-month operating cash flow increased to $1.844 billion from $1.620 billion, while capital expenditures declined to $396 million from $558 million. Implied nine-month operating cash flow less capital expenditures was approximately $1.448 billion.
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Healthy liquidity position
Liquidity strengthened, with cash increasing to $768 million from $585 million at December 31, 2025 and working capital rising to $3.651 billion from $3.515 billion. Management reported approximately $2.0 billion of available liquidity as of September 30, 2026.
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Investment in inventory technology
The Adroit acquisition added technology and talent intended to improve inventory management in High-Touch Solutions N.A.; the transaction was valued at $215 million and added $166 million of goodwill and $49 million of intangible assets.
What to watch
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Cost pressure on HTSNA margins
High-Touch Solutions N.A. gross margin declined 30 basis points year over year to 40.8%, while management cited higher payroll and benefit expenses; segment SG&A increased 12.6% to $981 million. The filing also identifies higher fuel and transportation costs and supply-chain disruption as ongoing risks.
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Currency and macroeconomic exposure
Endless Assortment revenue growth included a 6% unfavorable currency impact from changes in the Japanese yen exchange rate. Management also identified foreign-exchange fluctuations, tariffs, inflation, interest rates and recession risk as sources of uncertainty.
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Working-capital absorption
Accounts receivable increased $548 million to $2.877 billion from December 31, 2025, contributing to a $557 million operating-cash-flow use in the first nine months. Accrued sales incentives also increased to approximately $130 million from $115 million.
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Acquisition execution risk
The company incurred $8 million of acquisition transaction costs related to Adroit, partially offset by a $2 million tax benefit. The purchase price allocation remains preliminary, and the $215 million acquisition included $166 million of goodwill that may be subject to future valuation changes.
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Higher debt and refinancing exposure
Total debt increased to $2.685 billion from $2.488 billion at December 31, 2025, including commercial paper of $225 million versus $125 million. Japanese yen term loans increased to $178 million from $83 million, exposing the company to additional financing and currency-related risks.
Management's outlook
The 10-Q does not provide explicit quantitative revenue or EPS guidance. Management states that approximately $2.0 billion of liquidity was available as of September 30, 2026 and expects to continue investing in the business while funding dividends and share repurchases through operating cash flow.
Earlier filings 4
10-Q · May 7, 2026
W.W. Grainger, Inc. reported strong Q1 2026 earnings with revenue of $4.742 billion and earnings per share of $11.65, exceeding consensus expectations. Both the High-Touch Solutions and Endless Assortment segments…
10-K · February 19, 2026
Grainger delivered moderate top-line growth in 2025 with net sales of $17,942 million, up 4.5% year-over-year, driven by a 16% increase in the Endless Assortment business. GAAP profitability was pressured (diluted EPS…
10-Q · October 31, 2025
Grainger reported Q3 2025 net sales of $4,657 million, up $269 million or 6.1% versus Q3 2024, while GAAP diluted EPS declined to $6.12 from $9.87 a year ago driven by a $186 million impairment related to the planned…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.