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…
Earnings analysis · 10-Q
GWW earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
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,…
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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.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $12.01
What stood out
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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%.
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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%.
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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.
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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%.
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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.
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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.
What to watch
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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.
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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.
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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.
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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.
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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.
Management's outlook
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.
Earlier filings 4
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 itself. Analysis can contain errors; check the source document for full context.