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FY2025 Q4
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W.W. Grainger, Inc. earnings call
Buzzberg read
January sales up over 10% daily organic constant currency
Grainger reported solid Q4 2025 results, with total sales growth of ~4.5% and EPS of $9.44, in line with expectations. The company provided an upbeat 2026 outlook, guiding for revenue of $18.7-19.1B, EPS of $42.25-44.75, and operating margins of 15.4-15.9%, driven by strong pricing power and market share gains. Grainger expects 2026 revenue of $18.7-$19.1B and EPS of $42.25-$44.75, up over 10% year-over-year.
Buzzberg read January sales up over 10% daily organic constant currency Grainger reported solid Q4 2025 results, with total sales growth of ~4.5% and EPS of $9.44, in line with expectations. The company provided an upbeat 2026 outlook, guiding for revenue of $18.7-19.1B, EPS of $42.25-44.75, and operating margins of 15.4-15.9%, driven by strong pricing power and market share gains. Grainger expects 2026 revenue of $18.7-$19.1B and EPS of $42.25-$44.75, up over 10% year-over-year. Read full analysisCollapse analysis
Grainger reported solid Q4 2025 results, with total sales growth of ~4.5% and EPS of $9.44, in line with expectations. The company provided an upbeat 2026 outlook, guiding for revenue of $18.7-19.1B, EPS of $42.25-44.75, and operating margins of 15.4-15.9%, driven by strong pricing power and market share gains. Grainger expects 2026 revenue of $18.7-$19.1B and EPS of $42.25-$44.75, up over 10% year-over-year.
- Guidance includes continued market share gains across segments, with high-touch solutions growing 5-7.5% and Endless Assortment growing 12.5-15% (organic).
- Demonstrated strong pricing power by passing through tariff costs with price contribution north of 3% in 2026, and aiming for price/cost neutrality over time.
- Repositioning its measurement of MRO market to a multi-factor model, which it believes more accurately reflects demand, especially during economic disruptions.
Revenue$4.425B-5% QoQ
EPS$9.44-8% QoQ
Gross margin39.46%Reported
Operating margin14.33%Reported
6 grounded callouts
What matters now
The highest-signal changes from the call.
Share Gain
Market share outgrowth target lowered to 400-500 bps average
Pricing
Pricing actions taken to pass through tariff costs
Show 3 more callouts
Capex
Monotaro new DC to nearly double shipping capacity by 2028
Guidance
Endless Assortment segment to grow 12.5-15% in 2026
Margins
2026 operating margin guidance 15.4-15.9%
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| Revenue | $4.425B | -5% QoQ |
| EPS | $9.44 | -8% QoQ |
| Gross margin | 39.46% | Reported |
| Operating margin | 14.33% | Reported |
| Free cash flow | $0.269B | -21% QoQ |
| Capex | $0.126B | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Capex | FY2026 | 550–650 | 600 | Guided |
| EPS | FY2026 | $42.25–$44.75 | $43.50 | Guided |
| Free cash flow | FY2026 | $2.1B–$2.3B | $2.2B | Guided |
| Operating margin | FY2026 | 15.4%–15.9% | 15.65% | Guided |
| Revenue | FY2026 | $18.7B–$19.1B | $18.9B | Guided |
AI, capex & demand read
Management read
Confident
Management expressed confidence in strategy execution and long-term share gains, citing strong January sales, progress on growth engines, and reiterating long-term targets despite a conservative 2026 outlook.
Management AI read
Management emphasized AI and machine learning as key tools across the business, noting that while it's 'still early innings,' they are using these technologies to drive productivity and accelerate momentum, with specific plans to leverage AI in 2026 for seller insights and actionable recommendations.
Investment and capacity
Grainger continues to invest in supply chain capacity, with three new facilities underway: the Northwest DC (Portland) starting outbound operations later this year, the Houston DC beginning inbound operations in 2H 2027, and Monotaro's new automated DC in Mito opening in 2028, which will nearly double shipping capacity. CapEx guidance for 2026 is $550-650 million.
all 3 named companies below
Companiesreturns since call
Customers
Customers
Dean Merriweather
Grainger highlights strong tailwinds in aircraft manufacturing and data center build-outs, two areas where Boeing and large tech companies are key customers, suggesting strong MRO demand from these sectors.
Evidence
“These dynamics are driving bifurcation across industries where tariffs are impacting demand in some industries while others are experiencing a tailwind, notably those tied to aircraft manufacturing and data center build-outs.”
Competitors
Competitors
Dean Merriweather
Grainger's comparison to peer set (which includes Fastenal) suggests its gross margin performance is strong relative to those that do not have the LIFO headwind; Fastenal may be facing similar tariff/LIFO issues, but Grainger highlights that its FIFO margins are expanding.
Evidence
“Similar to last quarter, if we excluded the LIFO headwind and we wanted to compare ourselves to our peer set which report on LIFO, on FIFO, our implied FIFO gross margin rate would have increased year over year with price costs roughly”
Supply chain
Supply chain
D.J. McPherson
Grainger indicates that demand is bifurcating: some manufacturing areas (like aerospace and data centers) are strong, while others are weak. This suggests companies feeding those specific robust end-markets may be outperforming.
Evidence
“From an in-market perspective, our indicators suggest the MRO market gained momentum sequentially but remained muted in the period. For Grainger specifically, we saw strong performance with contractor and manufacturing customers...”
External signals
Supply-chain alpha · 2returns since call
Grainger anticipates SG&A leverage to improve as accelerating top line and productivity efforts offset ramping investment in demand generators; the company expects margins to expand despite the faster-growing lower-margin endless assortment segment.
Evidence
“We expect SG&A leverage to improve as the accelerating top line and our productivity efforts offset ramping investment across our demand generators.”
Grainger management is making a significant change in its internal market measurement model, switching from a single-factor model to a multi-factor model that it believes better reflects MRO consumption during periods of economic disruption.
Evidence
“With this context in mind, if you turn to slide 17, we charted the historical results for both models, starting with the point at which economic input were first published for the multifactor model.”
Methodology & coverage
Management-only analysis. All 3 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.