Grainger Q4 profit misses estimates as margins decline

Overview

• Broad line distributor's Q4 revenue slightly beat analyst expectations

• Adjusted EPS for Q4 missed analyst expectations

• Company issued 2026 outlook with 6.5%-9.0% organic sales growth

Outlook

• Grainger expects 2026 daily, organic constant currency sales growth of 6.5% to 9.0%

• Grainger forecasts 2026 net sales between $18.7 bln and $19.1 bln

• Company anticipates 2026 operating margin of 15.4% to 15.9%

Result Drivers

• HIGH-TOUCH SOLUTIONS - Sales growth in U.S. and Canada contributed to modest growth in this segment

• ENDLESS ASSORTMENT GROWTH - Strong performance at MonotaRO and Zoro drove significant growth in this segment

• OPERATING MARGIN DECLINE - Increased expenses, including unforeseen healthcare costs, led to a decrease in operating margin

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 5 "strong buy" or "buy", 12 "hold" and 4 "sell" or "strong sell"

• The average consensus recommendation for the industrial machinery & equipment peer group is "buy."

• Wall Street's median 12-month price target for WW Grainger Inc is $1,052.50, about 4% below its February 2 closing price of $1,096.18

• The stock recently traded at 25 times the next 12-month earnings vs. a P/E of 23 three months ago

Press Release: ID:nPn2h4WGna

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