01—Abstract
Summary
Summary of the 10-Q filed August 4, 2026. Cited figures are marked; the original filing is the authoritative source.
W.W.
Grainger, Inc. (GWW) reported strong financial performance for the second quarter and first half of 2026, exceeding prior-year results across key metrics. Net sales saw a significant increase of 10.3%a for the quarter and 10.2% for the first half, driven by robust growth in both the High-Touch Solutions N.A. and Endless Assortment segments. This top-line growth translated into substantial improvements in profitability, with operating earnings rising 19.0% for the quarter and 18.5% for the first half.
Diluted earnings per share also showed impressive gains, increasing by 20.5%b for the quarter and 19.3% for the first half. The company's financial health remains solid, supported by healthy operating cash flows and a strong liquidity position.
While facing macroeconomic uncertainties, Grainger's diversified customer base and the essential nature of its MRO products provide resilience. Management remains focused on executing strategic priorities, including investing in the business and returning capital to shareholders through dividends and share repurchases.
02—Key points
Key Highlights
- Net sales increased by 10.3% to $5.02 billion for the three months ended June 30, 2026, and by 10.2% to $9.76 billion for the six months ended June 30, 2026, compared to the respective prior-year periods.
- Operating earnings grew significantly by 19.0% to $807 million for the three months and 18.5% to $1.60 billion for the six months ended June 30, 2026.
- Diluted earnings per share (EPS) rose by 20.5% to $12.01 for the quarter and 19.3% to $23.66 for the first half of 2026, demonstrating strong profit translation.
- Gross profit margin improved to 39.5% for the quarter and 39.7% for the first half of 2026, up from 38.5% and 39.1% respectively in the prior year periods.
- Both key segments, High-Touch Solutions N.A. and Endless Assortment, contributed to the strong sales growth, with Endless Assortment showing a particularly strong increase of 13.5% in the quarter and 16.3% in the first half on a reported basis.
- The company generated $1.18 billion in cash from operating activities for the first half of 2026, an increase from $1.02 billion in the prior year, indicating robust cash generation.
- Grainger maintained a strong liquidity position with approximately $1.8 billion in available liquidity as of June 30, 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, W.W. Grainger kept $0.11.
- Revenue$5.02B100.0%
- Cost of revenue−$3.04B60.5%
- Gross profit$1.98B39.5%
- Operating costs−$1.18B23.4%
- Operating income$807.0M16.1%
- Interest, other & tax−$237.0M4.7%
- Net income$570.0M11.4%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed August 4, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $5.02B$4.55B | +10.3% |
| Cost of Revenue | $3.04B$2.80B | +8.5% |
| Gross Profit | $1.98B$1.75B | +13.0% |
| SG&A Expenses | $1.18B$1.08B | +9.3% |
| Operating Income | $807.00M$678.00M | +19.0% |
| Net Income | $570.00M$482.00M | +18.3% |
| EPS (Basic) | $12.02$9.99 | +20.3% |
| EPS (Diluted) | $12.01$9.97 | +20.5% |
| Shares Outstanding (Basic) | 47.20M48.00M | −1.7% |
| Shares Outstanding (Diluted) | 47.20M48.10M | −1.9% |
05—Questions
Frequently Asked Questions
What drove the significant increase in net sales for the period?
The increase in net sales was driven by strong performance across both the High-Touch Solutions N.A. and Endless Assortment segments. On a daily, organic constant currency basis, net sales increased by 13.7% for the quarter and 12.9% for the first half of 2026, indicating broad-based operational growth beyond currency fluctuations and divestitures.
How did the company manage its expenses relative to sales growth?
While Selling, General, and Administrative (SG&A) expenses increased by 9.3% for the quarter and 7.8% for the first half, this growth was outpaced by the respective sales increases of 10.3% and 10.2%. This indicates effective cost management, leading to operating leverage and a significant increase in operating earnings.
What is the outlook for the company's liquidity and capital resources?
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 future investments and return capital to shareholders through operating cash flows and may access capital markets if needed.
Are there any significant impacts from macroeconomic conditions mentioned in the report?
The company acknowledges ongoing macroeconomic volatility, including inflation, commodity and transportation costs, and geopolitical developments. However, management believes Grainger's strategy and the non-discretionary nature of its MRO products provide a degree of resilience against these uncertainties.
06—Continue