W W Grainger (GWW) Q1 2026 earnings summary

Executive summary

• Achieved strong Q1 2026 results with net sales of $4.74 billion, up 10.1% year-over-year, and diluted EPS of $11.65, up 18.2%, driven by robust growth in both High-Touch Solutions and Endless Assortment segments.

• Operating margin improved to 16.7%, a 110 basis point increase from Q1 2025, with gross margin at 40.0%, up 30 basis points.

• Generated $739 million in operating cash flow and returned $345 million to shareholders via dividends and share repurchases.

• Increased quarterly dividend by 10%, marking 55 consecutive years of increases, and continued leadership development initiatives.

• Recognized as a top workplace and maintained a customer-centric approach despite tariff and geopolitical uncertainties.

Financial highlights

• Net sales rose to $4,742 million from $4,306 million, a 10.1% increase year-over-year, with gross profit reaching $1,896 million and gross margin at 40.0%.

• Operating earnings were $793 million, up 18.0%; net earnings attributable to shareholders were $555 million, up 15.9%.

• Diluted EPS increased to $11.65 from $9.86, an 18.2% rise.

• Free cash flow for Q1 2026 was $569 million.

• ROIC reached 44.0%, up 320 basis points year-over-year.

Outlook and guidance

• Raised full-year 2026 guidance: net sales expected at $19.2–$19.6 billion (6.7%–9.1% growth; 9.5%–12.0% daily organic constant currency).

• Full-year EPS now expected between $44.25 and $46.25, nearly 15% growth at midpoint.

• Operating margin guidance increased to 15.6%–16.0%; gross profit margin expected at 39.2%–39.5%.

• Q2 sales expected to exceed $4.9 billion, with operating margins in the low 15% range due to seasonality, fuel, and inventory costs.

• Operating cash flow guidance: $2.125–$2.325 billion; capital expenditures: $550–$650 million.