W W Grainger (GWW) Q2 2026 earnings summary

Executive summary

• Achieved strong sales and profitability in Q2 2026, with reported sales of $5.021 billion, up 10.3% year-over-year, and daily organic constant currency sales up 13.7%, driven by robust performance in both High-Touch Solutions and Endless Assortment segments.

• Diluted EPS rose 20.5% to $12.01, benefiting from IEEPA tariff refunds and strong operating performance.

• Operating margin improved by 120 basis points to 16.1%, with ROIC reaching 43.5%.

• Returned $341 million to shareholders via dividends and share repurchases.

• Announced CFO transition: Dee Merriwether stepping down, Laurie Thomson appointed interim CFO.

Financial highlights

• Q2 2026 sales: $5.021 billion, up from $4.55 billion in Q2 2025; gross profit margin increased 100 bps to 39.5%.

• Operating earnings up 19% to $807 million; net earnings attributable to shareholders were $570 million, up 18%.

• Operating cash flow was $444 million; free cash flow for the quarter was $333 million.

• Net leverage ratio at 0.6x; working capital at $3,615 million; current ratio 2.8.

• Maintained strong liquidity with $589 million in cash and equivalents at quarter-end.

Outlook and guidance

• Raised FY 2026 sales guidance to $19.4–$19.7 billion (8.4%–10.0% growth), with daily organic constant currency sales expected to grow 11.5%–13.0%.

• Adjusted EPS guidance raised to $45.50–$47.25, up over 17% year-over-year at midpoint.

• Gross profit margin guidance increased to 39.3%–39.6%; operating margin at 15.8%–16.2%.

• Operating cash flow for 2026 expected at $2.2–$2.4 billion; capital expenditures $575–$650 million.

• Q3 sales expected to exceed $5 billion, with operating margins anticipated in the mid-15% range.