1. GWW's Q1 2025 sales increased 1.7% year-over-year. 2. Diluted EPS rose by 2.5% to $9.86 in Q1 2025. 3. Company reaffirms 2025 guidance for net sales of $17.6 - $18.1 billion. 4. High-Touch Solutions segment sales were down 0.2%, Endless Assortment up 10.3%. 5. GWW generated $646 million in operating cash flow during Q1 2025.
GWW's sales growth, margin improvement, and reaffirmed guidance indicate strong fundamentals, suggesting a positive outlook. Historical examples show that consistent sales growth and earnings improvements generally correlate with stock price increases.
The article details key financial metrics and guidance that are directly relevant to GWW's market performance. Factors such as sales growth, margins, and cash flow are critical for investor confidence and market sentiment.
The reaffirmed guidance and operational strategies may lead to sustained growth over time, aligning with GWW's long-term objectives. Past performance shows similar affirmations resulted in consistent growth trajectories.
CHICAGO, May 1, 2025 /PRNewswire/ -- Grainger (NYSE: GWW) today 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 $9.86, up 2.5% compared to the first quarter of 2024.
"Across both segments, our team kicked off 2025 by excelling at what we do best: delivering exceptional service, advancing our capabilities and being a trusted partner for our customers," said D.G. Macpherson, Chairman and CEO. "This focus on what truly matters has led to solid performance despite the continued muted demand environment. Looking ahead, we will remain committed to our purpose, We Keep the World Working®, while providing an outstanding customer experience and delivering on our commitments to our stakeholders."
| ($ in millions, except per share amounts) | Q1 2025 | Q1 2024 | Q1'25 vs. Q1'24 Fav. / (Unfav.) |
|---|---|---|---|
| Net Sales | $4,306 | $4,235 | 1.7% |
| Gross Profit | $1,710 | $1,668 | 2.5% |
| Operating Earnings | $672 | $669 | 0.4% |
| Net Earnings Attributable to W.W. Grainger, Inc. | $479 | $478 | 0.2% |
| Diluted Earnings Per Share | $9.86 | $9.62 | 2.5% |
| Gross Profit Margin | 39.7% | 39.4% | 30 bps |
| Operating Margin | 15.6% | 15.8% | (20) bps |
| Effective Tax Rate | 23.9% | 24.2% | 30 bps |
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 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.
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.
For the first quarter of 2025, the effective tax rate was 23.9%, compared to 24.2% in the first quarter of 2024.
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.
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.
| Category | 2025 Guidance |
|---|---|
| Net Sales | $17.6 - $18.1 billion |
| Sales growth | 2.7% - 5.2% |
| Daily, constant currency sales growth | 4.0% - 6.5% |
| Gross Profit Margin | 39.1% - 39.4% |
| Operating Margin | 15.1% - 15.5% |
| Diluted Earnings per Share | $39.00 - $41.50 |
| Operating Cash Flow | $2.05 - $2.25 billion |
| CapEx (cash basis) | $0.45 - $0.55 billion |
| Share Buyback | $1.15 - $1.25 billion |
| Effective Tax Rate | ~23.8% |
| Segment Operating Margin | High-Touch Solutions - N.A.: 17.0% - 17.4% |
| Endless Assortment | 8.5% - 9.0% |
(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.
The Company will conduct a live conference call and webcast at 11:00 a.m. ET on Thursday, May 1, 2025, to discuss the first quarter results. The event will be hosted by D.G. Macpherson, Chairman and CEO, and Deidra Merriwether, Senior Vice President and CFO, and can be accessed at invest.grainger.com. To access the conference call via phone, please send a request to investorrelations@grainger.com. For those unable to participate in the live event, a webcast replay will be available for 90 days at invest.grainger.com.
W.W. Grainger, Inc., is a leading broad line distributor with operations primarily in North America, Japan and the United Kingdom. At Grainger, We Keep the World Working® by serving more than 4.5 million customers worldwide with products delivered through innovative technology and deep customer relationships. Known for its commitment to service and award-winning culture, the Company had 2024 revenue of $17.2 billion across its two business models. In the High-Touch Solutions segment, Grainger offers approximately 2 million maintenance, repair and operating (MRO) products and services, including technical support and inventory management. In the Endless Assortment segment, Zoro.com offers customers access to more than 14 million products, and MonotaRO.com offers more than 24 million products. For more information, visit www.grainger.com.
Visit invest.grainger.com to view information about the Company, including a supplement regarding 2025 first quarter results. Additional Company information can be found on the Grainger Investor Relations website which includes the Company Snapshot and ESG report.
All statements in this communication, other than those relating to historical facts, are "forward-looking statements." Forward-looking statements can generally be identified by their use of terms such as "anticipate," "estimate," "believe," "expect," "could," "forecast," "may," "intend," "plan," "predict," "project," "will," or "would," and similar terms and phrases, including references to assumptions. Forward-looking statements are not guarantees of future performance and are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such statements.
Forward-looking statements include, but are not limited to, statements about future strategic plans and future financial and operating results. Important factors that could cause actual results to differ materially from those presented or implied in the forward-looking statements include, without limitation:
W.W. Grainger, Inc. and Subsidiaries
(In millions of dollars, except for share and per share amounts)
(Unaudited)
| Three Months Ended March 31, | 2025 | 2024 | |
|---|---|---|---|
| Net sales | $4,306 | $4,235 | |
| Cost of goods sold | $2,596 | $2,567 | |
| Gross profit | $1,710 | $1,668 | |
| Selling, general and administrative expenses | $1,038 | $999 | |
| Operating earnings | $672 | $669 | |
| Other (income) expense: | Interest expense – net | $21 | $21 |
| Other – net | ($6) | ($7) | |
| Total other expense – net | $15 | $14 | |
| Earnings before income taxes | $657 | $655 | |
| Income tax provision | $157 | $158 | |
| Net earnings | $500 | $497 | |
| Less net earnings attributable to noncontrolling interest | $21 | $19 | |
| Net earnings attributable to W.W. Grainger, Inc. | $479 | $478 | |
| Earnings per share: Basic | $9.88 | $9.65 | |
| Diluted | $9.86 | $9.62 | |
| Weighted average number of shares outstanding: Basic | 48.2 | 49.2 | |
| Diluted | 48.3 | 49.4 |
(In millions of dollars)
(Unaudited)
| As of | (Unaudited) | Assets | March 31, 2025 | December 31, 2024 |
|---|---|---|---|---|
| Current assets | Cash and cash equivalents | $666 | $1,036 | |
| Accounts receivable (less allowance for credit losses of $33 and $32, respectively) | $2,369 | $2,232 | ||
| Inventories – net | $2,309 | $2,306 | ||
| Prepaid expenses and other current assets | $186 | $163 | ||
| Total current assets | $5,530 | $5,737 | ||
| Property, buildings and equipment – net | $1,974 | $1,927 | ||
| Goodwill | $356 | $355 | ||
| Intangibles – net | $249 | $243 | ||
| Operating lease right-of-use | $366 | $371 | ||
| Other assets | $183 | $196 | ||
| Total assets | $8,658 | $8,829 |
| Current liabilities | Current maturities | $3 | $499 | |
| Trade accounts payable | $1,114 | $952 | ||
| Accrued compensation and benefits | $272 | $324 | ||
| Operating lease liability | $78 | $78 | ||
| Accrued expenses | $412 | $407 | ||
| Income taxes payable | $138 | $45 | ||
| Total current liabilities | $2,017 | $2,305 | ||
| Long-term debt | $2,278 | $2,279 | ||
| Long-term operating lease liability | $320 | $327 | ||
| Deferred income taxes and tax uncertainties | $97 | $101 | ||
| Other non-current liabilities | $99 | $114 | ||
| Shareholders' equity | $3,847 | $3,703 | ||
| Total liabilities and shareholders' equity | $8,658 | $8,829 |
(In millions of dollars)
(Unaudited)
| Three Months Ended March 31, | 2025 | 2024 |
|---|---|---|
| Cash flows from operating activities: | ||
| Net earnings | $500 | $497 |
| Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
| Provision for credit losses | $7 | $6 |
| Deferred income taxes and tax uncertainties | ($4) | ($2) |
| Depreciation and amortization | $61 | $56 |
| Non-cash lease expense | $20 | $21 |
| Stock-based compensation | $12 | $11 |
| Change in operating assets and liabilities: | ||
| Accounts receivable | ($128) | ($163) |
| Inventories | $6 | $76 |
| Prepaid expenses and other assets | ($19) | ($85) |
| Trade accounts payable | $154 | $202 |
| Operating lease liabilities | ($25) | ($23) |
| Accrued liabilities | ($42) | ($35) |
| Income taxes – net | $106 | $107 |
| Other non-current liabilities | ($2) | ($7) |
| Net cash provided by operating activities | $646 | $661 |
| Cash flows from investing activities: | ||
| Capital expenditures | ($125) | ($119) |
| Proceeds from sale of assets | — | $1 |
| Net cash used in investing activities | ($125) | ($118) |
| Cash flows from financing activities: | ||
| Proceeds from debt | $1 | $1 |
| Payments of debt | ($502) | ($17) |
| Proceeds from stock options exercised | $2 | $9 |
| Payments for employee taxes withheld from stock awards | ($3) | ($10) |
| Purchases of treasury stock | ($281) | ($268) |
| Cash dividends paid | ($115) | ($105) |
| Other – net | — | ($1) |
| Net cash used in financing activities | ($898) | ($391) |
| Exchange rate effect on cash and cash equivalents | $7 | ($8) |
| Net change in cash and cash equivalents | ($370) | $144 |
| Cash and cash equivalents at beginning of period | $1,036 | $660 |
| Cash and cash equivalents at end of period | $666 | $804 |
The Company supplements the reporting of financial information determined under U.S. generally accepted accounting principles (GAAP) with the non-GAAP financial measures as defined below. The Company believes these non-GAAP financial measures provide meaningful information to assist investors in understanding financial results and assessing future performance as they provide a better baseline for analyzing the ongoing performance of its business by excluding items that may not be indicative of core operating results.
The Company has a controlling ownership interest in MonotaRO, which is part of our Endless Assortment segment. MonotaRO's results are fully consolidated, reflected in U.S. GAAP, and reported one-month in arrears. Results will differ from MonotaRO's externally reported financials which follow Japanese GAAP.
Exclude certain non-recurring items, like restructuring charges, asset impairments, gains and losses associated with business divestitures and other non-recurring, infrequent or unusual gains and losses (together referred to as "non-GAAP adjustments"), from the Company's most directly comparable reported U.S. GAAP figures (reported gross profit, SG&A, operating earnings, net earnings and EPS). The Company believes these non-GAAP adjustments provide meaningful information to assist investors in understanding financial results and assessing future performance as they provide a better baseline for analyzing the ongoing performance of its business by excluding items that may not be indicative of core operating results.
Calculated using total cash provided by operating activities less capital expenditures. The Company believes the presentation of FCF allows investors to evaluate the capacity of the Company's operations to generate free cash flow.
Refers to sales for the period divided by the number of U.S. selling days for the period.
Refers to daily sales adjusted for changes in foreign currency exchange rates.
Refers to daily sales excluding the sales of certain divested businesses in the comparable prior year period and changes in foreign currency exchange rates.
Calculated by dividing current period local currency daily sales by current period average exchange rate and subtracting the current period local currency daily sales divided by the prior period average exchange rate.
2024: Q1-64, Q2-64, Q3-64, Q4-64, FY-256
2025: Q1-63, Q2-64, Q3-64, Q4-64, FY-255
2026: Q1-63, Q2-64, Q3-64, Q4-64, FY-255
they may not be possible to compare these measures with other companies' non-GAAP measures having the same or similar names. These non-GAAP measures should not be considered in isolation or as a substitute for reported results. These non-GAAP measures reflect an additional way of viewing aspects of operations that, when viewed with GAAP results, provide a more complete understanding of the business. This press release also includes certain non-GAAP forward-looking information. The Company believes that a quantitative reconciliation of such forward-looking information to the most comparable financial measure calculated and presented in accordance with GAAP cannot be made available without unreasonable efforts. A reconciliation of the most directly comparable forward-looking GAAP measures is not provided.
(percent change compared to prior year period)
(unaudited)
| Q1 2025 | Total Company | High-Touch Solutions - N.A. | Endless Assortment |
|---|---|---|---|
| Reported sales | 1.7% | (0.2)% | 10.3% |
| Daily impact | 1.6% | 1.5% | 1.7% |
| Daily sales(1) | 3.3% | 1.3% | 12.0% |
| Foreign currency exchange(2) | 1.1% | 0.6% | 3.3% |
| Daily, constant currency sales | 4.4% | 1.9% | 15.3% |
(1) Based on U.S. selling days, there were 63 and 64 selling days in Q1 2025 and Q1 2024, respectively.
(2) Excludes the impact of year-over-year foreign currency exchange rate fluctuations.
(in millions of dollars)
(unaudited)
| Q1 2025 | |
|---|---|
| Net cash flows provided by operating activities | $646 |
| Capital expenditures | ($125) |
| Free cash flow | $521 |
SOURCE W.W. Grainger, Inc.