CHICAGO — Grainger today reported results for the second quarter of 2026 with sales of $5.0 billion, up 10.3%, or 13.7% on a daily, organic constant currency basis, and diluted EPS of $12.01, up 20.5% compared to the second quarter of 2025.
“Despite ongoing geopolitical uncertainty, we executed well during the second quarter and delivered exceptional service to customers. Sales remained strong and core operating profitability was in line with expectations,” said D.G. Macpherson, Chairman and CEO. “Looking ahead, we are increasing our outlook to reflect our strong first half performance and the continued momentum we are seeing across the demand environment.”
2026 Second Quarter Financial Summary
Revenue
Sales in the quarter increased 10.3% compared to the second quarter of 2025. When normalizing for the Company’s exit from the U.K. market and the impact of foreign currency exchange, sales on a daily, organic constant currency basis increased 13.7% compared to the second quarter of 2025.
In the High-Touch Solutions – N.A. segment, sales were up 11.9%, or 11.7% on a daily, constant currency basis compared to the second quarter of 2025. Results for the segment were driven by volume growth and price inflation as tariff costs are passed. In the Endless Assortment segment, sales were up 13.5% compared to the second quarter of 2025, or up 20.6% on a daily, organic constant currency basis. Growth for the segment was driven by strong performance at both MonotaRO and Zoro.
Gross Profit Margin
Gross profit margin was 39.5% in the second quarter of 2026, up 100 basis points compared to the second quarter of 2025, driven by strength from both segments and a benefit related to the Company’s exit from the U.K. market. Results were inclusive of refunds recognized on IEEPA tariffs for products directly imported by Grainger, which reduced cost of goods sold by $43 million.
In the High-Touch Solutions – N.A. segment, gross profit margin was 41.8%, up 80 basis points compared to the prior year quarter as the benefit from the IEEPA tariff refunds and positive mix were partly offset by unfavorable freight and headwinds from certain private label products. In the Endless Assortment segment, gross profit margin increased by 90 basis points from the second quarter of 2025 due to improvement across the segment.
Earnings
For the second quarter of 2026, total Company operating earnings were $807 million, up 19.0% compared to the second quarter of 2025. Operating margin was 16.1%, a 120 basis point increase compared to the second quarter of 2025. This increase in operating margin was driven by gross margin improvement in both segments, sales leverage improvement in Endless Assortment, and a benefit related to the Company’s exit from the U.K. market.
Diluted earnings per share for the second quarter of 2026 were $12.01, up 20.5% compared to the second quarter of 2025. The increase was due primarily to strong operating performance and fewer shares outstanding, partly offset by a higher effective tax rate.
Tax Rate
For the second quarter of 2026, the effective tax rate was 24.8%, compared to 23.2% in the second quarter of 2025. The increase in the effective tax rate was primarily due to decreased tax credit activity in the current year period and the impact of tax legislation effective in 2026.
Cash Flow
During the second quarter of 2026, the Company generated $444 million of cash flow from operating activities as net earnings were partly offset by unfavorable working capital. The Company invested $111 million in capital expenditures, resulting in free cash flow of $333 million. During the quarter, the Company returned $341 million to Grainger shareholders through dividends and share repurchases.
Guidance
The Company is updating the following guidance ranges for 2026:
