CHICAGO — Grainger reported results for the first quarter of 2025 with sales of $4.3 billion, up 1.7%, or 4.4% on a daily, constant currency basis, and diluted EPS of $9.86, up 2.5% compared to the first quarter of 2024.
“Across both segments, our team kicked off 2025 by excelling at what we do best: delivering exceptional service, advancing our capabilities and being a trusted partner for our customers,” said D.G. Macpherson, Chairman and CEO. “This focus on what truly matters has led to solid performance despite the continued muted demand environment. Looking ahead, we will remain committed to our purpose, We Keep the World Working®, while providing an outstanding customer experience and delivering on our commitments to our stakeholders.”
Revenue
Sales in the quarter increased 1.7% compared to the first quarter of 2024. When normalizing for one fewer selling day in the current quarter and the impact of foreign currency exchange, sales on a daily, constant currency basis increased 4.4% compared to the first quarter of 2024.
In the High-Touch Solutions – N.A. segment, sales were down (0.2)%, or up 1.9% on a daily, constant currency basis compared to the first quarter of 2024 driven by growth across all geographies. In the Endless Assortment segment, sales were up 10.3%, or 15.3% on a daily, constant currency basis compared to the first quarter of 2024. Revenue growth for the segment was driven by strong performance at both MonotaRO and Zoro.
Gross Profit Margin
Gross profit margin was 39.7% in the first quarter of 2025, an increase of 30 basis points from the first quarter of 2024.
In the High-Touch Solutions – N.A. segment, gross profit margin was 42.4%, a 60-basis point increase compared to the prior year quarter due to favorable product mix and a supplier funding benefit from the annual Grainger Sales Meeting. In the Endless Assortment segment, gross profit margin increased by 30 basis points from the first quarter of 2024 due primarily to margin improvement at Zoro.
Earnings
For the first quarter of 2025, total Company operating earnings were $672 million, up 0.4% compared to the first quarter of 2024. Operating margin in the quarter was 15.6%, a 20-basis point decrease from the first quarter of 2024. Gross margin favorability in both segments and strong expense leverage in Endless Assortment more than offset deleverage in High-Touch Solutions – N.A., which was exacerbated by one fewer selling day in the current quarter.
Diluted earnings per share for the first quarter of 2025 were $9.86, up 2.5% compared to the first quarter of 2024. The increase was driven primarily by fewer shares outstanding.
Tax Rate
For the first quarter of 2025, the effective tax rate was 23.9%, compared to 24.2% in the first quarter of 2024.
Cash Flow
During the first quarter of 2025, the Company generated $646 million of cash flow from operating activities driven by net earnings and aided by favorable working capital in the period. The Company invested $125 million in capital expenditures, resulting in free cash flow of $521 million. During the quarter, the Company returned $380 million to Grainger shareholders through dividends and share repurchases.
Guidance
The Company is reaffirming the following guidance ranges as previously announced on January 31, 2025. Guidance incorporates certain known impacts of tariffs today and assumes that mitigating actions help offset future potential impacts.
