01—Abstract
Summary
Summary of the 10-Q filed August 1, 2025. Cited figures are marked; the original filing is the authoritative source.
W.W.
Grainger, Inc. reported solid financial results for the second quarter and the first half of 2025, demonstrating continued growth and operational strength in a dynamic economic environment. Net sales for the quarter increased 5.6% to $4.55 billiona, and for the six-month period, rose 3.7% to $8.86 billion. This growth was driven by strong performance across both the High-Touch Solutions N.A. and Endless Assortment segments, with the latter showing particularly robust sales expansion.
The company's profitability also saw positive movement, with diluted earnings per share (EPS) increasing by 4.8% to $9.97b for the quarter and 3.7% to $19.83 for the six-month period. Despite some pressures on gross profit margin, primarily due to timing and LIFO inventory impacts, the company managed its expenses effectively, leading to an increase in operating earnings. Grainger highlighted its strategic investments and resilience, managing through macroeconomic volatility including inflation and supply chain challenges, and maintaining its investment-grade credit ratings.
02—Key points
Key Highlights
- Net sales for the second quarter of 2025 increased by 5.6% to $4.55 billion compared to the prior year, with the Endless Assortment segment showing a significant 19.7% growth.
- Diluted earnings per share (EPS) for the quarter rose 4.8% to $9.97, reflecting an overall improvement in profitability.
- The company's operating earnings increased by 4.5% to $678 million for the quarter, driven by higher gross profit dollars despite increased SG&A expenses.
- For the first six months of 2025, net sales grew 3.7% to $8.86 billion and diluted EPS increased 3.7% to $19.83.
- Grainger continues to invest in its business, with capital expenditures of $300 million in the first half of 2025, primarily for supply chain enhancements.
- The company's financial condition remains strong, with total debt as a percentage of total capitalization decreasing to 36.5% as of June 30, 2025.
- Grainger declared a quarterly dividend of $2.26 per share, demonstrating a commitment to returning value to shareholders.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, W.W. Grainger kept $0.11.
- Revenue$4.55B100.0%
- Cost of revenue−$2.80B61.5%
- Gross profit$1.75B38.5%
- Operating costs−$1.08B23.6%
- Operating income$678.0M14.9%
- Interest, other & tax−$196.0M4.3%
- Net income$482.0M10.6%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed August 1, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $4.55B$4.31B | +5.6% |
| Cost of Revenue | $2.80B$2.62B | +6.9% |
| Gross Profit | $1.75B$1.69B | +3.6% |
| SG&A Expenses | $1.08B$1.04B | +3.1% |
| Operating Income | $678.00M$649.00M | +4.5% |
| Net Income | $482.00M$470.00M | +2.6% |
| EPS (Basic) | $9.99$9.54 | +4.7% |
| EPS (Diluted) | $9.97$9.51 | +4.8% |
| Shares Outstanding (Basic) | 48.00M49.00M | −2.0% |
| Shares Outstanding (Diluted) | 48.10M49.20M | −2.2% |
05—Questions
Frequently Asked Questions
What was the main driver of sales growth in the second quarter of 2025?
Sales growth in the second quarter of 2025 was driven by contributions from both the High-Touch Solutions N.A. and Endless Assortment segments. The Endless Assortment segment showed particularly strong growth of 19.7%, fueled by repeat business and enterprise customer expansion at MonotaRO. High-Touch Solutions N.A. also contributed with a 2.5% increase, primarily due to volume.
How did the company manage its gross profit margin in the current quarter?
The gross profit margin decreased by 80 basis points to 38.5% for the second quarter of 2025 compared to the prior year. This decrease was primarily attributed to a negative price-cost spread, influenced by timing and Last-In, First-Out (LIFO) inventory valuation impacts. Despite this, the gross profit dollars increased due to higher sales volumes.
What is the company's outlook on liquidity and capital resources?
Grainger believes its current cash and cash equivalents, marketable securities, and available credit facility provide sufficient liquidity for the next twelve months. The company plans to fund ongoing investments and return excess cash to shareholders through dividends and share repurchases, funded by operational cash flows. They also maintain access to capital markets for potential debt or equity issuance.
Are there any significant changes in debt or leverage reported in this filing?
The company repaid $500 million of its 1.85% Senior Notes that matured in February 2025, leading to a decrease in total debt. As a result, total debt as a percentage of total capitalization decreased to 36.5% as of June 30, 2025, from 42.9% at the end of 2024, indicating improved leverage.
06—Continue