01—Abstract
Summary
Summary of the 10-Q filed October 31, 2025. Cited figures are marked; the original filing is the authoritative source.
W.W.
Grainger, Inc. (GWW) reported its third-quarter and year-to-date results for the period ending September 29, 2025. While total net sales saw a modest increase of 6.1% for the quarter and 4.5% for the nine months, driven by growth in both the High-Touch Solutions N.A. and Endless Assortment segments, overall profitability was significantly impacted by a substantial asset impairment loss related to the decision to exit the U.K. market. The company incurred an $186 milliona impairment loss for its Cromwell business in the U.K. and plans to close Zoro U.K., leading to a reported operating loss in the "Other" segment for the quarter.
Consequently, net earnings attributable to W.W. Grainger, Inc. decreased by 39.5%b for the quarter and 12.5% for the nine months. Despite these challenges, the company's core North American operations, particularly the Endless Assortment segment, demonstrated strong growth and improved operating margins, suggesting resilience in its primary markets.
02—Key points
Key Highlights
- Net sales increased by 6.1% to $4.66 billion for the third quarter and by 4.5% to $13.52 billion for the first nine months, indicating continued top-line growth.
- A significant $186 million asset impairment loss was recognized due to the decision to exit the U.K. market (Cromwell business), negatively impacting operating earnings and net income.
- Operating earnings for the third quarter decreased by 25.5% year-over-year, largely due to the U.K. exit-related charges.
- The Endless Assortment segment showed robust performance, with net sales up 18.2% in the third quarter and gross profit margin expanding by 60 basis points.
- The High-Touch Solutions N.A. segment experienced more moderate growth, with net sales up 3.4% in the quarter, but saw a slight decrease in gross profit margin due to pricing and LIFO inventory impacts.
- Cash flow from operations remained strong at $1.62 billion for the nine months, although down from the prior year, while investing activities saw increased outflows due to capital expenditures for supply chain investments.
- The company declared a quarterly dividend of $2.26 per share, demonstrating continued commitment to returning capital to shareholders.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, W.W. Grainger kept $0.06.
- Revenue$4.66B100.0%
- Cost of revenue−$2.86B61.4%
- Gross profit$1.80B38.6%
- Operating costs−$1.29B27.6%
- Operating income$511.0M11.0%
- Interest, other & tax−$217.0M4.7%
- Net income$294.0M6.3%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed October 31, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $4.66B$4.39B | +6.1% |
| Cost of Revenue | $2.86B$2.67B | +7.2% |
| Gross Profit | $1.80B$1.72B | +4.5% |
| SG&A Expenses | $1.29B$1.03B | +24.5% |
| Operating Income | $511.00M$686.00M | −25.5% |
| Net Income | $294.00M$486.00M | −39.5% |
| EPS (Basic) | $6.13$9.90 | −38.1% |
| EPS (Diluted) | $6.12$9.87 | −38.0% |
| Shares Outstanding (Basic) | 47.80M48.80M | −2.0% |
| Shares Outstanding (Diluted) | 47.90M48.90M | −2.0% |
05—Questions
Frequently Asked Questions
What is the primary reason for the significant drop in reported net earnings for the third quarter?
The primary reason for the significant drop in reported net earnings for the third quarter is a substantial asset impairment loss of $186 million recognized due to W.W. Grainger's decision to exit the U.K. market, specifically its Cromwell business. This one-time charge heavily impacted the company's profitability for the period.
How is the Endless Assortment segment performing compared to the High-Touch Solutions N.A. segment?
The Endless Assortment segment is demonstrating stronger growth, with a 18.2% increase in net sales for the third quarter and an expansion in gross profit margin. In contrast, the High-Touch Solutions N.A. segment, which represents the larger portion of the business, saw more modest sales growth of 3.4% and a slight decrease in gross profit margin.
What is the company's outlook on liquidity and capital resources?
W.W. Grainger believes its current cash and cash equivalents, marketable securities, and revolving credit facility provide sufficient liquidity for the next twelve months. The company plans to fund ongoing business investments and return excess cash to shareholders through dividends and share repurchases, primarily using cash flows from operations.
What is the impact of the U.K. market exit on future operations?
W.W. Grainger states that it does not expect the exit from the U.K. market to have a material effect on its future results of operations. The company is focusing its efforts on markets where it can deliver the greatest long-term impact, primarily its North American operations.
06—Continue