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W.W. Grainger 8-K Report, Financial Results (Feb 3, 2026)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed February 3, 2026
Period End
February 3, 2026
Security
GWW
In the record · 2016–202610-K1110-Q328-K92

GWW filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 92 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Oct ’17Oct ’17
  2. Leadership change8-K · Feb ’22Feb ’22
  3. Leadership change8-K · Aug ’24Aug ’24

01—Abstract

Summary

Summary of the 8-K filed February 3, 2026. Cited figures are marked; the original filing is the authoritative source.

W.W.

Grainger closed 2025 with fourth-quarter sales of $4.4 billiona, up 4.5% (4.6% on a daily, organic constant currency basis), but profitability came under pressure. Q4 operating margin fell 70 basis points to 14.3% and diluted EPS declined 2.8% to $9.44, with unforeseen healthcare costs and slower growth in High-Touch Solutions - N.A. weighing on results. For the full year, sales grew 4.5% to $17.9 billion, but reported operating earnings fell 5.4% and reported diluted EPS dropped 8.6% to $35.40, driven by a $196 million loss tied to the exit from the U.K. market (the sale of Cromwell and closure of Zoro U.K.).

On an adjusted basis, which excludes that loss and 2024 restructuring costs, full-year operating margin was 15.0% (down 50 bps) and adjusted diluted EPS rose 1.3% to $39.48b. Cash generation remained solid. Full-year operating cash flow was $2.0 billion and free cash flow was $1.3 billion, and Grainger returned $1.5 billion to shareholders through dividends and buybacks.

Cash on the balance sheet fell to $585 millionc from $1.036 billion, and long-term debt rose to $2.36 billion, so capital allocation is shifting toward reinvestment (capex rose to $684 million from $541 million) and shareholder returns. For 2026, management guided to net sales of $18.7 to $19.1 billion, daily organic constant currency sales growth of 6.5% to 9.0%, and adjusted diluted EPS of $42.25 to $44.75.

The guidance implies a recovery in adjusted operating margin to 15.4%d to 15.9%, supported by segment margin targets of 16.9% to 17.4% for High-Touch Solutions - N.A. and 10.0% to 10.5% for Endless Assortment. Investors will be watching whether margin expansion materializes as tariff-related inflation and LIFO headwinds ease and cost pressures subside.

02—Key points

Key Highlights

  1. Q4 2025 net sales rose 4.5% to $4.4 billion; daily organic constant currency growth was 4.6%, with Endless Assortment up 14.3% (15.7% organic constant currency) and High-Touch Solutions - N.A. up 2.2%.
  2. Q4 2025 operating margin declined 70 bps to 14.3%, and diluted EPS fell 2.8% to $9.44, reflecting unforeseen healthcare costs and an unfavorable tax rate of 22.8% versus 20.1% a year earlier.
  3. FY 2025 reported diluted EPS was $35.40 (down 8.6%); adjusted diluted EPS was $39.48 (up 1.3%), excluding a $196 million U.K. exit loss.
  4. FY 2025 gross margin fell 30 bps to 39.1%, driven by tariff-related inflation, unfavorable price/cost timing, and LIFO inventory valuation headwinds in High-Touch Solutions - N.A.
  5. FY 2025 operating cash flow was $2.0 billion and free cash flow was $1.3 billion; capex rose to $684 million and $1.5 billion was returned to shareholders.
  6. 2026 guidance calls for net sales of $18.7-$19.1 billion, daily organic constant currency growth of 6.5%-9.0%, adjusted operating margin of 15.4%-15.9%, and adjusted diluted EPS of $42.25-$44.75.
  7. Cash fell to $585 million from $1.036 billion at year-end 2024 while long-term debt increased to $2.36 billion, indicating a shift in the balance sheet toward investment and shareholder returns.

03—Questions

Frequently Asked Questions

  1. Why did reported earnings decline more than adjusted earnings in 2025?

    Reported 2025 operating earnings included a $196 million loss from Grainger's exit from the U.K. market, including the sale of the Cromwell business and closure of Zoro U.K. That charge, which had no corresponding tax benefit, drove reported operating earnings down 5.4% and reported diluted EPS down 8.6%. Excluding it, adjusted operating earnings rose 1.4% and adjusted diluted EPS rose 1.3%.

  2. What is driving the margin pressure in the core business?

    Management cited tariff-related inflation, which created unfavorable price/cost timing and LIFO inventory valuation headwinds in High-Touch Solutions - N.A. In Q4, operating margin also absorbed unforeseen healthcare costs and slower sales growth in that segment. Endless Assortment, by contrast, showed gross margin improvement of 70 bps in Q4.

  3. What does 2026 guidance imply for profitability?

    Guidance calls for adjusted operating margin of 15.4%-15.9%, up from an adjusted 15.0% in 2025, and adjusted diluted EPS of $42.25-$44.75, versus $39.48 in 2025. The plan assumes segment margins of 16.9%-17.4% for High-Touch Solutions - N.A. and 10.0%-10.5% for Endless Assortment, with an effective tax rate of about 25%.

  4. How strong is Grainger's cash generation and how is it being used?

    Grainger generated $2.0 billion in operating cash flow and $1.3 billion in free cash flow in 2025, and returned $1.5 billion to shareholders through dividends and buybacks. Capex rose to $684 million from $541 million. The 2026 plan calls for operating cash flow of $2.125-$2.325 billion, capex of $0.55-$0.65 billion, and buybacks of $0.95-$1.05 billion.

  5. Is the balance sheet becoming more leveraged?

    Cash declined to $585 million from $1.036 billion, while long-term debt increased to $2.362 billion from $2.279 billion, and current maturities fell to $126 million from $499 million. Shareholders' equity rose to $4.141 billion. Investors should monitor whether the company maintains enough liquidity while continuing its buyback and capex programs.

04—Continue

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