W.W. Grainger reported third‑quarter 2025 sales of $4.657 billion, up 6.1 % from $4.388 billion in the same quarter of 2024. Adjusted diluted earnings per share were $10.21, a 3.4 % increase over $9.87 in Q3 2024. Gross profit margin held at 38.6 %. The reported operating margin was 11.0 %, down 40 basis points from 11.4 % in Q3 2024, largely due to a $120 million non‑cash asset impairment related to the divestiture of the Cromwell business in the United Kingdom. The adjusted operating margin, excluding the impairment, was 15.2 %, a 40‑basis‑point decline from 15.6 % in the prior year.
The High‑Touch Solutions segment recorded sales growth of 3.4 % to $1.12 billion and a gross margin of 41.1 %. Its operating margin fell 40 basis points to 17.2 %, reflecting higher tariff costs and inventory valuation headwinds. The Endless Assortment segment posted sales growth of 18.2 % to $3.53 billion, a 60‑basis‑point improvement in gross margin to 36.5 % and a 100‑basis‑point expansion in operating margin to 9.8 %, driven by strong performance at MonotaRO and Zoro.
Cash flow from operations reached $597 million, and the company returned $399 million to shareholders through dividends and share repurchases. Operating cash flow for the year is projected at $2.10 billion to $2.20 billion, and capital expenditures are expected to be $0.625 billion to $0.675 billion.
Grainger updated its full‑year 2025 outlook. Net sales are now forecast at $17.8 billion to $18.0 billion, down from the previous range of $17.9 billion to $18.2 billion. Daily constant‑currency sales growth is projected at 3.9 % to 4.7 %, compared with the prior guidance of 4.4 % to 5.1 %. Adjusted operating margin is expected to be 15.0 % to 15.2 %, and adjusted diluted EPS is forecast at $39.00 to $39.75, versus the earlier range of $38.50 to $40.25.
The asset impairment related to the Cromwell divestiture increased the effective tax rate to 34.7 % for the quarter. The exit from the UK market allows Grainger to concentrate resources on its core North American and Japanese operations, where it anticipates higher growth potential. Tariff‑related inflation and LIFO inventory valuation headwinds continue to pressure margins, particularly in the High‑Touch Solutions segment, but management expects gross profit margins to stabilize around 39 % as the tariff environment normalizes.
Grainger operates in a competitive industrial distribution sector, with peers such as MSC Industrial Direct and SiteOne Landscape Supply reporting earnings around the same time. The company’s dual‑model strategy—High‑Touch Solutions and Endless Assortment—remains a key differentiator, enabling it to serve a broad customer base while pursuing e‑commerce and technology initiatives.
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