GWW earnings analysis
What we found in GWW's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
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, with Endless Assortment producing the faster growth and greater operating-profit increase. Liquidity remains sound, with $589 million of cash, approximately $1.8 billion of available liquidity and $902 million of first-half free cash flow, though receivables rose sharply and tariff refunds, freight, FX and taxes are important earnings-quality considerations.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Double-digit sales growth and sequential acceleration
- Q2 net sales were $5.021 billion, up $467 million or 10.3% from $4.554 billion a year ago and up 5.9% sequentially from $4.740 billion in Q1 2026. Daily organic constant-currency sales increased 13.7%.
- Year-over-year margin expansion
- Gross margin expanded 100 bps year over year to 39.5%, while operating margin rose 120 bps to 16.1%. Operating earnings increased 19.0% to $807 million; sequentially, operating margin moderated 60 bps from Q1's 16.7%.
- EPS growth exceeded consensus
- Diluted EPS rose 20.5% to $12.01 from $9.97, exceeding the supplied $11.27 consensus estimate by 6.6%. EPS also increased 3.1% from $11.65 in Q1 2026.
- HTSNA volume-led growth
- HTSNA sales increased $423 million, or 11.9%, to $3.967 billion, driven primarily by volume. Segment operating earnings rose 16.5% to $686 million and gross margin increased 80 bps to 41.8%.
- Endless Assortment outgrew company
- Endless Assortment sales grew $125 million, or 13.5%, to $1.054 billion; daily organic constant-currency growth was 20.6%. Operating earnings increased 31.5% to $121 million, supported by repeat business, MonotaRO enterprise growth, favorable Zoro discounts and mix.
- Strong operating cash generation
- Six-month operating cash flow increased $160 million to $1.183 billion. After $281 million of capital expenditures, six-month free cash flow was $902 million, with capex equal to 23.8% of operating cash flow.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Tariff-refund benefit may not recur
- HTSNA's 41.8% gross margin included tariff-refund benefits, while management said higher freight costs partly offset the benefit. Company gross margin was 39.5%, up 100 bps year over year, so future margin comparisons may be less favorable if refunds do not recur.
- Receivables growth pressures cash conversion
- Accounts receivable increased $496 million to $2.825 billion from $2.329 billion at year-end, and receivables consumed $510 million of operating cash flow in the first six months. This working-capital use remains a cash-conversion risk despite $1.183 billion of operating cash flow.
- FX and macro volatility remain headwinds
- Endless Assortment reported 13.5% sales growth, but unfavorable currency reduced growth by 5.9 percentage points in Q2. Management also cites continued uncertainty around tariff and trade policies, inflation, fuel and transportation costs.
- Higher tax rate weighs on earnings
- The effective tax rate increased to 24.8% from 23.2% a year ago, lifting Q2 income-tax expense by $45 million to $198 million. Management attributed the increase to lower tax-credit activity and tax legislation effective in 2026.
- No material risk-factor update; debt remains
- There were no material changes to risk factors from the 2025 Form 10-K. However, total debt was $2.408 billion at June 30, 2026, including $2.406 billion of long-term debt, while management continues to identify interest rates, credit ratings and debt-agreement compliance as forward-looking risks.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $12.01
- Gross margin
- 39.5%
- Operating margin
- 16.1%
- Segment
- High-Touch Solutions N.A. revenue: $3.967 billion (+11.9% YoY)
- Segment
- Endless Assortment revenue: $1.054 billion (+13.5% YoY)
What they said about what is next.
The 10-Q contains no explicit quantitative FY2026 sales or EPS outlook. Quantitative guidance was provided separately in the earnings release/call rather than this filing.
The filing reads better than the one before it.
What came before.
- 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…
- 10-Q · May 1, 2025
- W.W. Grainger reported Q1 net sales of $4,306 million (up $71 million, +1.7% vs Q1 2024) and diluted EPS of $9.86 (up $0.24, +2.5% vs Q1 2024). Gross margin expanded to 39.7% (+30 bps YoY) while operating earnings were…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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