Grainger Tops Estimates With $12.54 Adjusted EPS and Raises 2026 Outlook

Grainger (NYSE: GWW) reported third-quarter revenue of $5.18 billion, above the $5.08 billion analysts expected, and adjusted diluted EPS of $12.54 against the $11.66 average analyst estimate, in an 8-K filed Wednesday, Nov. 4.

Sales rose 11.3% from a year earlier, or 14.9% on a daily, organic constant currency basis. High-Touch Solutions - N.A. sales rose 13.8%, driven by double-digit volume growth and price inflation. Endless Assortment sales rose 11.9%, or 19.3% on a daily, organic constant currency basis, with growth at MonotaRO and Zoro.

Margins and earnings

Reported operating margin was 16.0%, up 500 basis points from a year earlier. On an adjusted basis, operating margin was 16.1%, up 90 basis points, and adjusted operating earnings were $836 million. Gross profit margin was 38.8%, up 20 basis points.

Reported diluted EPS was $12.42, compared with $6.12 a year earlier. The prior-year period included a loss tied to the company's exit from the U.K. market, which the company excludes from its adjusted results.

Raised outlook

Grainger raised its full-year 2026 adjusted diluted EPS range to $47.00 to $48.00 from $45.50 to $47.25. Analysts expected $46.47 for the year. The company also raised its net sales outlook to $19.8 billion to $20.0 billion, compared with the $19.67 billion analyst average.

The company generated $661 million of operating cash flow and $546 million of free cash flow in the quarter. It returned $396 million to shareholders through dividends and share repurchases. Chairman and CEO D.G. Macpherson said the company is 'on track for an exceptional year.'

For the fourth quarter, analysts expect adjusted EPS of $11.17 on revenue of $4.83 billion. Grainger's shares closed at $1,397.98 on Nov. 3, the last close before the filing, for a market value of about $65.85 billion.