Grainger lifts full-year earnings outlook as quarterly sales rise 11.3% (NYSE: GWW)

What happened

W.W. Grainger, Inc. (NYSE: GWW) raised its 2026 earnings outlook after third-quarter sales rose 11.3% to $5.2 billion from a year earlier.

Adjusted diluted earnings per share rose 22.8% to $12.54. Reported diluted EPS was $12.42, up 102.9%. The year-earlier quarter carried a $196 million loss from the company's exit of the U.K. market.

Chairman and CEO D.G. Macpherson said the quarter reflected "consistent execution and an improving demand environment." He said Grainger is raising its 2026 guidance and remains "on track for an exceptional year."

Key numbers

Metric	Latest	Change	Source
Q3 2026 net sales	$5.2 billion	from $4.66 billion, +11.3%	SEC 8-K, Exhibit 99.1
Adjusted diluted EPS	$12.54	from $10.21, +22.8%	SEC 8-K, Exhibit 99.1
Reported diluted EPS	$12.42	from $6.12, +102.9%	SEC 8-K, Exhibit 99.1
Adjusted operating margin	16.1%	from 15.2%, +90 basis points	SEC 8-K, Exhibit 99.1
Operating cash flow	$661 million	from $597 million, +10.7%	Calculated from SEC 8-K
2026 diluted adjusted EPS guidance	$47.00 to $48.00	from $45.50 to $47.25 (previous guidance)	SEC 8-K, Exhibit 99.1

Read more: W.W. Grainger (GWW) company research

Where the growth came from

Both segments grew at double-digit rates. Sales in High-Touch Solutions – N.A. rose 13.8%. The company credits double-digit volume growth and continued price inflation as it passed on cost increases.

Endless Assortment sales rose 11.9%, or 19.3% on a daily, organic constant currency basis. Both MonotaRO and Zoro performed strongly. That measure leaves out the divested Cromwell business, the closed Zoro U.K. business and currency changes. For the whole company, the same measure shows 14.9% growth.

Stock perps: every US stock that trades as a perpetual future, by leverage, live

Margins, tax and cash

Reported operating margin was 16.0%, up 500 basis points. The prior-year quarter included the U.K. loss. Adjusted operating margin was 16.1%, up 90 basis points. Grainger credits sales leverage in both segments and a benefit from the U.K. exit.

Gross margin was 38.8%, up 20 basis points. Endless Assortment expansion and the U.K. exit benefit helped. In High-Touch Solutions – N.A., gross margin was 40.8%, down 30 basis points on unfavorable freight expense and mix.

The company said the adjusted EPS gain came mainly from operating performance, fewer shares and a lower tax rate. Diluted shares averaged 47.1 million, down from 47.9 million. The adjusted tax rate was 24.3% against 24.8%, on additional tax credit benefits.

Operating cash flow was $661 million. After $115 million of capital expenditures, free cash flow was $546 million. Grainger returned $396 million to shareholders through dividends and share repurchases.

What the raised guidance says

Grainger raised most of its 2026 ranges, which are stated on an adjusted basis. Net sales guidance is now $19.8 billion to $20.0 billion, from $19.4 billion to $19.7 billion. Expected sales growth is now 10.1% to 11.6%, up from 8.4% to 10.0%, against 2025 revenue of $17.9 billion.

Diluted adjusted EPS guidance is $47.00 to $48.00, from $45.50 to $47.25. The low end rose $1.50 and the high end $0.75, so the range is narrower. Operating margin guidance is 16.0% to 16.2%, from 15.8% to 16.2%. Operating cash flow guidance is $2.35 billion to $2.45 billion, from $2.25 billion to $2.4 billion.

The share buyback range was trimmed at the top, to $0.97 billion to $1.02 billion from $0.97 billion to $1.05 billion. The cash flow statement shows $739 million of treasury stock purchases in the first nine months.

Why it matters

OptimistFi has argued that Grainger works if customers keep consolidating MRO spending with it because of product availability, convenience and purchasing scale. Double-digit growth in both segments and a higher full-year outlook strengthen that view.

Part of the gain is not purely recurring operating performance. Adjusted results exclude $8 million of transaction costs from the purchase of technology assets from Adroit Worldwide Media, Inc. They also exclude the prior-year U.K. loss. The U.K. exit also added to current margins, the lower adjusted tax rate rested on extra tax credits, and High-Touch growth included price inflation.

What's next

Macpherson and Laurie Thomson, vice president and interim CFO, will host a live conference call and webcast at 11:00 a.m. ET on Nov. 4. A replay will be available for 90 days at invest.grainger.com.

The next quarterly report is the test. Slower High-Touch volume growth would weaken the case. So would Endless Assortment margin below the guided 10.9% to 11.1% full-year range, which was raised from 10.4% to 10.8%.

More from OptimistFi

• GWW stock: research and coverage of W.W. Grainger
• Stock research on every company OptimistFi covers

From OptimistFi Perps