Grainger Boosts Full Year Earnings Outlook

Grainger, a leading broad line distributor headquartered in Chicago, has reported impressive financial results for the third quarter of 2026, with sales reaching $5.2 billion, up 11.3% from the same period in 2025. This performance marks a significant milestone in the company's ongoing strategy to maintain and enhance its market position.

The company's third quarter highlights underscore its robust financial health and continued growth trajectory. Sales were up 14.9% on a daily, organic, and constant currency basis, reflecting a strong and resilient demand environment. This growth was driven by both the High-Touch Solutions and Endless Assortment segments, which delivered impressive growth figures.

In the High-Touch Solutions - N.A. segment, sales increased by 13.8% on both a reported and daily, constant currency basis compared to the third quarter of 2025. This growth was attributed to double-digit volume growth and continued price inflation, as cost increases were passed on to customers. The Endless Assortment segment, on the other hand, saw sales rise by 11.9% compared to the third quarter of 2025, or by 19.3% on a daily, organic, and constant currency basis. The segment's growth was primarily driven by strong performance at MonotaRO and Zoro.

Grainger's gross profit margin in the third quarter of 2026 stood at 38.8%, up 20 basis points from the third quarter of 2025. This improvement was largely attributed to the expansion of the Endless Assortment segment and a benefit related to the company's exit from the U.K. market. In the High-Touch Solutions - N.A. segment, gross profit margin decreased by 30 basis points to 40.8%, primarily due to unfavorable freight expense and product mix. In the Endless Assortment segment, gross profit margin increased by 90 basis points to 44.3%, driven by improvements at both MonotaRO and Zoro.

For the third quarter of 2026, Grainger reported total Company reported operating earnings of $828 million, up 62.0% compared to the third quarter of 2025. On an adjusted basis, operating earnings were $836 million, up 18.2% compared to the third quarter of 2025. Adjusted operating margin was 16.1%, a 90 basis point increase compared to the third quarter of 2025. This increase in adjusted operating margin was driven by sales leverage in both segments and a benefit related to the company's exit from the U.K. market. These adjusted results for the quarter excluded transaction costs associated with the acquisition of technology assets in the current year period and the loss related to the company's exit of the U.K. market, including the sale of the Cromwell business and closure of Zoro U.K., in the prior year period.

Grainger's earnings for the third quarter of 2026 were $12.42 on a reported basis, up 102.9% compared to the third quarter of 2025. On an adjusted basis, diluted EPS was $12.54, up 22.8% compared to the third quarter of 2025. The increase was primarily due to strong operating performance, fewer shares outstanding, and a lower effective tax rate.

Grainger has also been proactive in managing its cash flow, generating $661 million in operating cash flow during the third quarter of 2026. The company invested $115 million in capital expenditures, resulting in free cash flow of $546 million. During the quarter, the company returned $396 million to Grainger shareholders through dividends and share repurchases.

In light of these strong results, Grainger has increased its full year 2026 earnings outlook, including a diluted adjusted EPS range of $47.00 to $48.00.

Grainger, known for its commitment to service and purpose-driven culture, reported 2025 revenue of $17.9 billion. The company's financial performance for the third quarter of 2026 demonstrates its continued success and strong market position.