Graco (GGG) Q1 2026 earnings summary

Executive summary

• Net sales increased 2% year-over-year to $540.1 million, driven by acquisitions and favorable currency translation, offset by a 6% organic sales decline.

• Operating earnings fell 4% and net earnings decreased 5% compared to the same quarter last year; adjusted net earnings dropped 7%.

• Gross margin declined by 0.6 percentage points to 52.0%, due to unfavorable product/channel mix, higher product costs, and lower margins from acquisitions.

• Diluted adjusted EPS was $0.66, down 6% from the prior year.

• Operating expenses rose 7%, with increases from acquisitions and currency effects.

Financial highlights

• Acquisitions contributed 5 percentage points to sales growth; currency translation added 3 points.

• Net cash from operations was $120 million, down $5 million year-over-year.

• Capital expenditures were $12 million in Q1; full-year plan is $90–$100 million.

• Backlog, excluding acquisitions, increased $26 million (13%) from year-end 2025.

• Tariffs increased product costs by $7 million in the quarter.

Outlook and guidance

• 2026 revenue guidance maintained: low single-digit organic growth (constant currency), mid-single-digit including acquisitions.

• Organic order backlog increased 13% from year-end 2025, supporting confidence in the outlook.

• Capital expenditures for 2026 projected at $90–$100 million, with $50 million for facility expansion.

• Effective tax rate anticipated at 20–21% for Q2 and full year 2026.