W.W. Grainger, Inc. stands as a significant global supplier of maintenance, repair, and operating (MRO) supplies and related services. Its market presence ...
W.W. Grainger, Inc. is a Fortune 500 company and a global leader in the distribution of maintenance, repair, and operating (MRO) products and services. Founded in 1927 by William W. Grainger in Chicago, the company has grown to serve over 4 million customers worldwide, offering over 1 million products. Headquartered ...W.W. Grainger, Inc. is a Fortune 500 company and a global leader in the distribution of maintenance, repair, and operating (MRO) products and services. Founded in 1927 by William W. Grainger in Chicago, the company has grown to serve over 4 million customers worldwide, offering over 1 million products. Headquartered in Lake Forest, Illinois, Grainger operates through two main segments: High-Touch Solutions N.A. and Endless Assortment. The High-Touch Solutions segment focuses on North America, providing personalized service and a comprehensive assortment of MRO supplies to businesses, government entities, and institutions. The Endless Assortment segment includes the company's e-commerce platform, which offers a wider range of products and services geared for smaller and mid-sized customers. Grainger's product categories include safety and security supplies, material handling and storage equipment, plumbing and pumps, cleaning and janitorial items, metalworking tools, and hand tools. The company also provides technical support, inventory management solutions, and specialized services to help customers optimize their operations. In recent years, Grainger has emphasized digital transformation, expanding its online presence and enhancing its supply chain efficiency. Financially, the company reported approximately $17.2 billion in revenue for 2024, with a net income of around $2.64 billion. Its market capitalization is over $60 billion, and it has a strong return on equity of 48.7% and a net profit margin of 9.9%. Grainger employs around 26,000 people and is led by Chairman and CEO Donald G. Macpherson, who has been with the company since 2003 and became CEO in 2016. The company is known for its robust distribution network, customer loyalty, and consistent dividend payments, making it a stalwart in the industrial distribution sector.
YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength.
QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes.
RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three).
$17.9B
+4.5%
+5.9%
Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day.
$1.7B
-10.6%
+2.7%
Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials.
+39.1%
+0.3%
-1.2%
Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on).
+15.0%
-2.4%
-3.9%
Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales.
+9.5%
-14.5%
-3.0%
Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock.
$1.3B
-15.2%
-41.5%
FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine.
+7.4%
-18.9%
-44.7%
Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe.
84.7%
-10.7%
-4.3%
Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking.
2.83x
+13.6%
+4.4%
Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground.
Operator: Greetings, and welcome to the W.W. Grainger Second Quarter 2026 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce Kyle Bland, Vice President, Investor Relations. Thank you. You may begin.
Kyle Bland: Good morning. Welcome to Grainger's Second Quarter 2026 Earnings Call. With me are D.G. Macpherson, Chairman and CEO; and Dee Merriwether, Senior Vice President and CFO. As a reminder, some of our comments today may include forward-looking statements that are subject to various risks and uncertainties. Additional information regarding factors that could cause actual results to differ materially is included in the company's most recent Form 8-K and other periodic reports filed with the SEC. This morning's call includes non-GAAP financial measures, which reflect certain adjustments in previous periods as noted in the presentation. There were no adjusting items in the second quarter of 2026 period. We have also included organic revenue adjustments in the presentation, which normalized sales growth to reflect our exit from the U.K. market, including the Cromwell divestiture and the closure of Zoro U.K., both of which were completed in the fourth quarter 2025. Definitions and full reconciliations of our non-GAAP financial measures with their corresponding GAAP measures are found in the tables at the end of this presentation and in our earnings release, both of which are available on our IR website. We will also share results related to MonotaRO. Please remember that MonotaRO was a public company and follows Japanese GAAP, which differs from U.S. GAAP and is reported in our results 1 month in arrears. As a result, the numbers discussed will differ from MonotaRO's public statements. Now I'll turn it over to D.G.
Donald Macpherson: Thanks, Kyle. Good morning, everyone, and thanks for joining today. Building on our momentum from the start of the year, we delivered strong performance in the second quarter by executing well and delivering exceptional service to customers. Despite ongoing uncertainty, sales remain strong in both the High-Touch and Endless Assortment segments, and core operating profitability was in line with expectations. While the external landscape remains fluid. We're confident in our ability to manage the impact or remain committed to our pricing tenets. We also saw continued strength in the demand environment during the period with most end markets showing acceleration. As I spend time with customers, I can see this playing out in the way we serve them on site and inside their operations. Recently, I visited several manufacturing customers where our teams are closely connected to the day-to-day work. We're helping them manage inventory in ways that fit their specific needs, and that is contributing to strong year-over-year growth at these locations. More and more customers are asking us to help them run their operations more efficiently and …