CHICAGO — Grainger (NYSE: GWW) today reported results for the second quarter of 2025 with sales of $4.6 billion, up 5.6%, or 5.1% on a daily, constant currency basis, and adjusted diluted EPS of $9.97, up 2.2% compared to the second quarter of 2024.
“Our team remains focused on our customers, fostering deep relationships, providing exceptional service and driving innovation through differentiated capabilities,” said D.G. Macpherson, Chairman and CEO. “Our headline results for the quarter finished largely in-line with communicated expectations, although performance was impacted by some tariff-related factors which are also flowing into our updated outlook. Even amid ongoing macroeconomic uncertainty, our commitment to our customers remains steadfast, and we’re well-positioned to continue creating value for all stakeholders.”
Second Quarter Highlights
- Delivered sales of $4.6 billion, up 5.6%, or 5.1% on a daily, constant currency basis
- Achieved operating margin of 14.9%, down 20 basis points on a reported basis, or down 50 basis points on an adjusted basis
- Generated diluted EPS of $9.97, up 4.8% on a reported basis, or up 2.2% on an adjusted basis
- Produced $377 million in operating cash flow and returned $336 million to Grainger shareholders through dividends and share repurchases
- Updating full year 2025 guidance including a lower adjusted diluted EPS range of $38.50 to $40.25
2025 Second Quarter Financial Summary
(1) Results exclude restructuring costs incurred in the second quarter of 2024. See the supplemental information of this release for further information regarding the Company’s non-GAAP measures including reconciliations to the most directly comparable GAAP measure.
Revenue
Sales in the quarter increased 5.6% compared to the second quarter of 2024. When normalizing for the impact of foreign currency exchange, sales on a daily, constant currency basis increased 5.1% compared to the second quarter of 2024.
In the High-Touch Solutions – N.A. segment, sales were up 2.5%, or 2.8% on a daily, constant currency basis compared to the second quarter of 2024 driven by growth across all geographies. In the Endless Assortment segment, sales were up 19.7%, or 16.3% on a daily, constant currency basis compared to the second 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 38.5% in the second quarter of 2025, a decrease of 80 basis points from the second quarter of 2024.
In the High-Touch Solutions – N.A. segment, gross profit margin was 41.0%, a 70 basis point decrease compared to the prior year quarter as tariff-related inflation caused unfavorable price / cost timing and last-in, first-out (LIFO) inventory valuation headwinds. In the Endless Assortment segment, gross profit margin increased by 30 basis points from the second quarter of 2024 due primarily to margin improvement at Zoro.
Earnings
For the second quarter of 2025, total Company operating earnings were $678 million, up 4.5% on a reported basis compared to the second quarter of 2024, or up 2.0% on an adjusted basis when removing restructuring costs incurred in the prior year period. Operating margin was 14.9%, a 20 basis point decrease on a reported basis compared to the second quarter of 2024, or a 50 basis point decrease on an adjusted basis. Unfavorable gross margin in High-Touch Solutions – N.A. was partially offset by strong expense leverage in Endless Assortment.
Diluted earnings per share for the second quarter of 2025 were $9.97, up 4.8% on a reported basis compared to the second quarter of 2024, or up 2.2% on an adjusted basis. The increase was driven primarily by fewer shares outstanding.
Tax Rate
For the second quarter of 2025, the effective tax rate was 23.2%, compared to 22.9% in the second quarter of 2024. Both figures were consistent on a reported and adjusted basis.
Cash Flow
During the second quarter of 2025, the Company generated $377 million of cash flow from operating activities as net earnings were partially offset by unfavorable working capital. The Company invested $175 million in capital expenditures, resulting in free cash flow of $202 million. During the quarter, the Company returned $336 million to Grainger shareholders through dividends and share repurchases.
Guidance
The Company is updating the following guidance ranges to reflect anticipated headwinds from certain known tariff impacts.
Guidance provided is on an adjusted basis. Daily, constant currency sales growth is adjusted for the impact of one less selling day in 2025 as compared to 2024 and changes in foreign currency exchange. The Company does not reconcile forward-looking non-GAAP financial measures. For further details see the supplemental information of this release.
(1) Guidance provided is on an adjusted basis. Daily, constant currency sales growth is adjusted for the impact of one less selling day in 2025 as compared to 2024 and changes in foreign currency exchange. The Company does not reconcile forward-looking non-GAAP financial measures. For further details see the supplemental information of this release.
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