filings.toolsItem 1. Financial Statements
44K characters. Original on sec.gov ·
Item 1. Financial Statements
W.W. Grainger, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In millions of dollars and shares, except for per share amounts)
(Unaudited)
| Three Months Ended | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net sales | $ | 4,742 | $ | 4,306 | |||||||||||||||||||
| Cost of goods sold | 2,846 | 2,596 | |||||||||||||||||||||
| Gross profit | 1,896 | 1,710 | |||||||||||||||||||||
| Selling, general and administrative expenses | 1,103 | 1,038 | |||||||||||||||||||||
| Operating earnings | 793 | 672 | |||||||||||||||||||||
| Other expense (income): | |||||||||||||||||||||||
| Interest expense – net | 21 | 21 | |||||||||||||||||||||
| Other – net | (3) | (6) | |||||||||||||||||||||
| Total other expense – net | 18 | 15 | |||||||||||||||||||||
| Earnings before income taxes | 775 | 657 | |||||||||||||||||||||
| Income tax provision | 194 | 157 | |||||||||||||||||||||
| Net earnings | 581 | 500 | |||||||||||||||||||||
| Less net earnings attributable to noncontrolling interest | 26 | 21 | |||||||||||||||||||||
| Net earnings attributable to W.W. Grainger, Inc. | $ | 555 | $ | 479 | |||||||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic | $ | 11.67 | $ | 9.88 | |||||||||||||||||||
| Diluted | $ | 11.65 | $ | 9.86 | |||||||||||||||||||
| Weighted average number of shares outstanding: | |||||||||||||||||||||||
| Basic | 47.3 | 48.2 | |||||||||||||||||||||
| Diluted | 47.4 | 48.3 | |||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
W.W. Grainger, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In millions of dollars)
(Unaudited)
| Three Months Ended | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net earnings | $ | 581 | $ | 500 | |||||||||||||||||||
| Other comprehensive earnings (losses): | |||||||||||||||||||||||
| Foreign currency translation adjustments | (19) | 38 | |||||||||||||||||||||
| Postretirement benefit plan losses – net of tax benefit of $1 and $1 | (2) | (2) | |||||||||||||||||||||
| Total other comprehensive earnings (losses) | (21) | 36 | |||||||||||||||||||||
| Comprehensive earnings – net of tax | 560 | 536 | |||||||||||||||||||||
| Less comprehensive earnings (losses) attributable to noncontrolling interest | |||||||||||||||||||||||
| Net earnings | 26 | 21 | |||||||||||||||||||||
| Foreign currency translation adjustments | (5) | 17 | |||||||||||||||||||||
| Total comprehensive earnings (losses) attributable to noncontrolling interest | 21 | 38 | |||||||||||||||||||||
| Comprehensive earnings attributable to W.W. Grainger, Inc. | $ | 539 | $ | 498 |
The accompanying notes are an integral part of these financial statements.
W.W. Grainger, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions of dollars, except for share and per share amounts)
| As of | |||||||||||
| Assets | (Unaudited) March 31, 2026 | December 31, 2025 | |||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 695 | $ | 585 | |||||||
| Accounts receivable (less allowance for credit losses of $32 and $32) | 2,627 | 2,329 | |||||||||
| Inventories – net | 2,385 | 2,394 | |||||||||
| Prepaid expenses and other current assets | 200 | 176 | |||||||||
| Total current assets | 5,907 | 5,484 | |||||||||
| Property, buildings and equipment – net | 2,359 | 2,268 | |||||||||
| Goodwill | 358 | 360 | |||||||||
| Intangibles – net | 268 | 265 | |||||||||
| Operating lease right-of-use | 342 | 345 | |||||||||
| Other assets | 239 | 240 | |||||||||
| Total assets | $ | 9,473 | $ | 8,962 | |||||||
| Liabilities and shareholders' equity | |||||||||||
| Current liabilities | |||||||||||
| Current maturities | $ | 2 | $ | 126 | |||||||
| Trade accounts payable | 1,220 | 963 | |||||||||
| Accrued compensation and benefits | 285 | 343 | |||||||||
| Operating lease liability | 71 | 73 | |||||||||
| Accrued expenses | 423 | 386 | |||||||||
| Income taxes payable | 198 | 49 | |||||||||
| Total current liabilities | 2,199 | 1,940 | |||||||||
| Long-term debt | 2,409 | 2,362 | |||||||||
| Long-term operating lease liability | 299 | 301 | |||||||||
| Deferred income taxes and tax uncertainties | 128 | 121 | |||||||||
| Other non-current liabilities | 95 | 97 | |||||||||
| Shareholders' equity | |||||||||||
| Cumulative preferred stock – $5 par value – 12,000,000 shares authorized; none issued or outstanding | — | — | |||||||||
| Common Stock – $0.50 par value – 300,000,000 shares authorized; 109,659,219 shares issued | 55 | 55 | |||||||||
| Additional contributed capital | 1,448 | 1,446 | |||||||||
| Retained earnings | 15,405 | 14,958 | |||||||||
| Accumulated other comprehensive losses | (181) | (165) | |||||||||
| Treasury stock, at cost – 62,432,376 and 62,240,438 shares, respectively | (12,797) | (12,558) | |||||||||
| Total W.W. Grainger, Inc. shareholders’ equity | 3,930 | 3,736 | |||||||||
| Noncontrolling interest | 413 | 405 | |||||||||
| Total shareholders' equity | 4,343 | 4,141 | |||||||||
| Total liabilities and shareholders' equity | $ | 9,473 | $ | 8,962 |
The accompanying notes are an integral part of these financial statements.
W.W. Grainger, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of dollars)
(Unaudited)
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net earnings | $ | 581 | $ | 500 | |||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
| Provision for credit losses | 6 | 7 | |||||||||
| Deferred income taxes and tax uncertainties | 8 | (4) | |||||||||
| Depreciation and amortization | 62 | 61 | |||||||||
| Non-cash lease expense | 20 | 20 | |||||||||
| Stock-based compensation | 14 | 12 | |||||||||
| Change in operating assets and liabilities: | |||||||||||
| Accounts receivable | (303) | (128) | |||||||||
| Inventories | 5 | 6 | |||||||||
| Prepaid expenses and other assets | (50) | (19) | |||||||||
| Trade accounts payable | 253 | 154 | |||||||||
| Operating lease liabilities | (24) | (25) | |||||||||
| Accrued liabilities | (5) | (42) | |||||||||
| Income taxes – net | 173 | 106 | |||||||||
| Other non-current liabilities | (1) | (2) | |||||||||
| Net cash provided by operating activities | 739 | 646 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | (170) | (125) | |||||||||
| Other – net | (8) | — | |||||||||
| Net cash used in investing activities | (178) | (125) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Short-term borrowings (repayments), original maturities of 90 days or less, net | (125) | — | |||||||||
| Proceeds from debt | 50 | 1 | |||||||||
| Payments of debt | (1) | (502) | |||||||||
| Proceeds from stock options exercised | 6 | 2 | |||||||||
| Payments for employee taxes withheld from stock awards | (5) | (3) | |||||||||
| Purchases of treasury stock | (237) | (281) | |||||||||
| Purchases of noncontrolling interests | (25) | — | |||||||||
| Cash dividends paid | (108) | (115) | |||||||||
| Other – net | (1) | — | |||||||||
| Net cash used in financing activities | (446) | (898) | |||||||||
| Exchange rate effect on cash and cash equivalents | (5) | 7 | |||||||||
| Net change in cash and cash equivalents | 110 | (370) | |||||||||
| Cash and cash equivalents at beginning of year | 585 | 1,036 | |||||||||
| Cash and cash equivalents at end of period | $ | 695 | $ | 666 |
The accompanying notes are an integral part of these financial statements.
W.W. Grainger, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In millions of dollars, except for per share amounts)
(Unaudited)
| Common Stock | Additional Contributed Capital | Retained Earnings | Accumulated Other Comprehensive Earnings (Losses) | Treasury Stock | Noncontrolling Interest | Total | |||||||||||||||||
| Balance at January 1, 2025 | $ | 55 | $ | 1,399 | $ | 13,677 | $ | (274) | $ | (11,499) | $ | 345 | $ | 3,703 | |||||||||
| Stock-based compensation | — | 10 | — | — | 1 | — | 11 | ||||||||||||||||
| Purchases of treasury stock | — | — | — | — | (288) | — | (288) | ||||||||||||||||
| Net earnings | — | — | 479 | — | — | 21 | 500 | ||||||||||||||||
| Other comprehensive earnings (losses) | — | — | — | 19 | — | 17 | 36 | ||||||||||||||||
| Cash dividends paid ($2.05 per share) | — | — | (99) | — | — | (16) | (115) | ||||||||||||||||
| Balance at March 31, 2025 | $ | 55 | $ | 1,409 | $ | 14,057 | $ | (255) | $ | (11,786) | $ | 367 | $ | 3,847 | |||||||||
The accompanying notes are an integral part of these financial statements.
W.W. Grainger, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In millions of dollars, except for per share amounts)
(Unaudited)
| Common Stock | Additional Contributed Capital | Retained Earnings | Accumulated Other Comprehensive Earnings (Losses) | Treasury Stock | Noncontrolling Interest | Total | |||||||||||||||||
| Balance at January 1, 2026 | $ | 55 | $ | 1,446 | $ | 14,958 | $ | (165) | $ | (12,558) | $ | 405 | $ | 4,141 | |||||||||
| Stock-based compensation | — | 14 | — | — | 1 | — | 15 | ||||||||||||||||
| Purchases of treasury stock | — | — | — | — | (240) | — | (240) | ||||||||||||||||
| Transactions with noncontrolling interests, net | — | (12) | — | — | — | (13) | (25) | ||||||||||||||||
| Net earnings | — | — | 555 | — | — | 26 | 581 | ||||||||||||||||
| Other comprehensive earnings (losses) | — | — | — | (16) | — | (5) | (21) | ||||||||||||||||
| Cash dividends paid ($2.26 per share) | — | — | (108) | — | — | — | (108) | ||||||||||||||||
| Balance at March 31, 2026 | $ | 55 | $ | 1,448 | $ | 15,405 | $ | (181) | $ | (12,797) | $ | 413 | $ | 4,343 | |||||||||
The accompanying notes are an integral part of these financial statements.
W.W. Grainger, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
W.W. Grainger, Inc. is a broad line distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America (N.A.) and Japan. In the fourth quarter of 2025, Grainger exited the United Kingdom (U.K.) market by completing the sale of the Cromwell business and closing the Zoro U.K. business. In this report, the words “Grainger” or “Company” mean W.W. Grainger, Inc. and its subsidiaries, except where the context makes it clear that the reference is only to W.W. Grainger, Inc. itself and not its subsidiaries.
Basis of Presentation
The Company's Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting and the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and therefore do not include all information and disclosures normally included in the annual Consolidated Financial Statements. The preparation of these Condensed Consolidated Financial Statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from these estimated amounts. In the opinion of the Company’s management, the Condensed Consolidated Financial Statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation.
The Condensed Consolidated Balance Sheet at December 31, 2025, has been derived from the audited Consolidated Financial Statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.
The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 19, 2026 (2025 Form 10-K).
There were no material changes to the Company’s significant accounting policies from those disclosed in Note 1 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data in the Company's 2025 Form 10-K.
W.W. Grainger, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
NOTE 2 - REVENUE
Grainger serves a large number of customers in diverse industries, which are subject to different economic and market-specific factors. The Company's revenue is primarily comprised of MRO product sales and related activities.
The Company's presentation of revenue by reportable segment and customer industry most reasonably depicts how the nature, amount, timing and uncertainty of the Company's revenue and cash flows are affected by economic and market-specific factors. The majority of Company revenue originates from contracts with a single performance obligation to deliver products, whereby performance obligations are satisfied when control of the product is transferred to the customer per the arranged shipping terms.
The following table presents the Company's percentage of revenue by reportable segment and customer industry:
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||||
| Customer Industry(1) | High-Touch Solutions N.A. | Endless Assortment | Total Company | High-Touch Solutions N.A. | Endless Assortment | Total Company(2) | ||||||||||||||||||||||||||||||||
| Manufacturing | 31 | % | 29 | % | 30 | % | 31 | % | 30 | % | 31 | % | ||||||||||||||||||||||||||
| Government | 18 | % | 3 | % | 15 | % | 18 | % | 3 | % | 15 | % | ||||||||||||||||||||||||||
| Wholesale | 7 | % | 18 | % | 10 | % | 7 | % | 19 | % | 10 | % | ||||||||||||||||||||||||||
| Commercial Services | 7 | % | 12 | % | 8 | % | 7 | % | 12 | % | 8 | % | ||||||||||||||||||||||||||
| Contractors | 6 | % | 12 | % | 7 | % | 5 | % | 12 | % | 6 | % | ||||||||||||||||||||||||||
| Healthcare | 8 | % | 2 | % | 6 | % | 8 | % | 1 | % | 6 | % | ||||||||||||||||||||||||||
| Retail | 4 | % | 4 | % | 4 | % | 4 | % | 4 | % | 4 | % | ||||||||||||||||||||||||||
| Transportation | 4 | % | 2 | % | 4 | % | 4 | % | 2 | % | 4 | % | ||||||||||||||||||||||||||
| Utilities | 3 | % | 2 | % | 3 | % | 3 | % | 2 | % | 3 | % | ||||||||||||||||||||||||||
| Warehousing | 2 | % | 1 | % | 2 | % | 3 | % | — | % | 2 | % | ||||||||||||||||||||||||||
| Other(3) | 10 | % | 15 | % | 11 | % | 10 | % | 15 | % | 11 | % | ||||||||||||||||||||||||||
| Total net sales | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||||||||||||
| Percent of total company revenue | 79 | % | 21 | % | 100 | % | 79 | % | 19 | % | 100 | % | ||||||||||||||||||||||||||
| (1)Customer industry results for the three months ended March 31, 2026 and 2025 primarily use the North American Industry Classification System (NAICS). As customers' businesses evolve, industry classifications may change. When these changes occur, Grainger does not recast the customer classification for prior periods as the industry used in the prior period was appropriate at the point-in-time. As a result, year-over-year changes may be impacted. | ||||||||||||||||||||||||||||||||||||||
| (2)Total Company includes other businesses, which included the Cromwell business through the date of divestiture in the fourth quarter of 2025. For further details on the sale, see Note 2 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data in the Company’s 2025 Form 10-K. Other businesses accounted for approximately 2% of total Company revenue for the three months ended March 31, 2025. | ||||||||||||||||||||||||||||||||||||||
| (3)Other primarily includes revenue from industries and customers that are not material individually, including hospitality, restaurants, property management and natural resources. | ||||||||||||||||||||||||||||||||||||||
Total accrued sales incentives are recorded in Accrued expenses and were approximately $116 million and $115 million as of March 31, 2026 and December 31, 2025, respectively.
The Company did not have any material unsatisfied performance obligations, contract assets or liabilities as of March 31, 2026 and December 31, 2025.
W.W. Grainger, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
NOTE 3 - PROPERTY, BUILDINGS AND EQUIPMENT
Property, buildings and equipment consisted of the following (in millions of dollars):
| As of | |||||||||||
| March 31, 2026 | December 31, 2025 | ||||||||||
| Land and land improvements | $ | 551 | $ | 551 | |||||||
| Building, structures and improvements | 1,943 | 1,883 | |||||||||
| Furniture, fixtures, machinery and equipment | 2,132 | 2,066 | |||||||||
| Property, buildings and equipment | 4,626 | 4,500 | |||||||||
| Less accumulated depreciation | 2,267 | 2,232 | |||||||||
| Property, buildings and equipment – net | $ | 2,359 | $ | 2,268 |
NOTE 4 - GOODWILL AND OTHER INTANGIBLE ASSETS
The Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators during the three months ended March 31, 2026. As such, quantitative assessments were not required.
The balances and changes in the carrying amount of goodwill by segment are as follows (in millions of dollars):
| High-Touch Solutions N.A. | Endless Assortment | Total | ||||||||||||||||||||||||
| Balance at January 1, 2025 | $ | 306 | $ | 49 | $ | 355 | ||||||||||||||||||||
| Translation | 5 | — | 5 | |||||||||||||||||||||||
| Balance at December 31, 2025 | 311 | 49 | 360 | |||||||||||||||||||||||
| Translation | (1) | (1) | (2) | |||||||||||||||||||||||
| Balance at March 31, 2026 | $ | 310 | $ | 48 | $ | 358 |
No goodwill impairment was recorded for the three months ended March 31, 2026 and 2025.
The balances and changes in intangible assets – net are as follows (in millions of dollars):
| As of | |||||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||
| Weighted average life | Gross carrying amount | Accumulated amortization | Net carrying amount | Gross carrying amount | Accumulated amortization | Net carrying amount | |||||||||||||||||||||||||||||||||||
| Customer lists and relationships | 10.7 years | $ | 163 | $ | 158 | $ | 5 | $ | 163 | $ | 157 | $ | 6 | ||||||||||||||||||||||||||||
| Trademarks, trade names and other | 16.5 years | 20 | 17 | 3 | 20 | 17 | 3 | ||||||||||||||||||||||||||||||||||
| Non-amortized trade names and other | Indefinite | 18 | — | 18 | 19 | — | 19 | ||||||||||||||||||||||||||||||||||
| Capitalized software | 4.5 years | 844 | 602 | 242 | 821 | 584 | 237 | ||||||||||||||||||||||||||||||||||
| Total intangible assets | 5.7 years | $ | 1,045 | $ | 777 | $ | 268 | $ | 1,023 | $ | 758 | $ | 265 |
W.W. Grainger, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
NOTE 5 - DEBT
Total debt, including long-term and current maturities, consisted of the following (in millions of dollars):
| As of | |||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||
| 4.60% senior notes due 2045 | $ | 1,000 | $ | 890 | $ | 1,000 | $ | 904 | |||||||||||||||
| 4.45% senior notes due 2034 | 500 | 493 | 500 | 496 | |||||||||||||||||||
| 3.75% senior notes due 2046 | 400 | 331 | 400 | 338 | |||||||||||||||||||
| 4.20% senior notes due 2047 | 400 | 311 | 400 | 317 | |||||||||||||||||||
| Japanese Yen term loans | 129 | 129 | 83 | 83 | |||||||||||||||||||
| Debt issuance costs – net of amortization and other | (20) | (20) | (21) | (21) | |||||||||||||||||||
| Long-term debt | 2,409 | 2,134 | 2,362 | 2,117 | |||||||||||||||||||
| Commercial paper and other | 2 | 2 | 126 | 126 | |||||||||||||||||||
| Current maturities | 2 | 2 | 126 | 126 | |||||||||||||||||||
| Total debt | $ | 2,411 | $ | 2,136 | $ | 2,488 | $ | 2,243 | |||||||||||||||
Senior Notes
Between 2015 and 2024, Grainger issued $2.3 billion in unsecured debt (Senior Notes), net of the $500 million principal repayment for the 1.85% Senior Notes that matured in February 2025, primarily to provide flexibility in funding general working capital needs, share repurchases and long-term cash requirements. The Senior Notes require no principal payments until maturity and interest is paid semi-annually.
The Company incurred debt issuance costs related to its Senior Notes, representing underwriting fees and other expenses. These costs were recorded as a contra-liability in Long-term debt and are being amortized over the term of the Senior Notes using the straight-line method to Interest expense – net. As of March 31, 2026 and December 31, 2025, the cumulative unamortized costs were $20 million and $21 million, respectively.
Japanese Yen Term Loans
In 2026 and 2025, MonotaRO entered into ¥7.5 billion and ¥13 billion, respectively, term loan agreements to fund the expansion of its distribution center (DC) network. The Japanese Yen term loans mature in 2035, payable in equal monthly principal installments from September 2028 through June 2035. The weighted average interest rates on the 2026 and 2025 term loans are 1.74% and 1.27%, respectively.
Fair Value
The estimated fair value of the Company’s Senior Notes was based on available external pricing data and current market rates for similar debt instruments, among other factors, which are classified as Level 2 inputs within the fair value hierarchy.
W.W. Grainger, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
NOTE 6 - SEGMENT INFORMATION
Grainger's two reportable segments are High-Touch Solutions N.A. (HTSNA) and Endless Assortment (EA). These reportable segments align with Grainger's go-to-market strategies and bifurcated business models of high-touch solutions and endless assortment that generate sales primarily through the distribution of MRO products. The remaining businesses are classified as Other to reconcile to consolidated results. These businesses individually and in the aggregate do not meet the criteria of a reportable segment.
The operating and reportable segments reflect the way the chief operating decision maker (CODM) evaluates the business. All expenses directly attributable to each reportable segment are included in the operating results for each segment. The CODM is not regularly provided and does not evaluate the segments using total asset or capital expenditure information and it is therefore not disclosed. For further discussion on the CODM, see Note 13 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data in the Company’s 2025 Form 10-K.
The following is a summary of segment results (in millions of dollars):
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| High-Touch Solutions N.A. | Endless Assortment | Total | High-Touch Solutions N.A. | Endless Assortment | Total | ||||||||||||||||||||||||||||||
| Net sales(1) | $ | 3,752 | $ | 990 | $ | 4,742 | $ | 3,397 | $ | 828 | $ | 4,225 | |||||||||||||||||||||||
| Reconciliation of net sales | |||||||||||||||||||||||||||||||||||
| Other net sales | — | 81 | |||||||||||||||||||||||||||||||||
| Total company net sales | $ | 4,742 | $ | 4,306 | |||||||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||
| Cost of goods sold | 2,153 | 693 | 1,958 | 583 | |||||||||||||||||||||||||||||||
| Other segment items(2) | 911 | 192 | 839 | 173 | |||||||||||||||||||||||||||||||
| Segment operating earnings | $ | 688 | $ | 105 | $ | 793 | $ | 600 | $ | 72 | $ | 672 | |||||||||||||||||||||||
| Reconciliation of operating earnings | |||||||||||||||||||||||||||||||||||
| Other operating earnings | — | — | |||||||||||||||||||||||||||||||||
| Total company operating earnings | $ | 793 | $ | 672 | |||||||||||||||||||||||||||||||
| (1)Intersegment sales are recorded at values based on market prices, which creates intercompany profit sales that are eliminated within each segment to present only the impact of net sales to external customers. | |||||||||||||||||||||||||||||||||||
| (2)Other segment items for HTSNA and EA consist of selling, general and administrative expenses primarily comprised of payroll and benefits, marketing expense, depreciation, amortization and non-cash lease expense, corporate overhead expenses allocated to each segment based upon benefits received, occupancy and other miscellaneous expenses. Intersegment expenses including fees and certain incurred costs for shared services are also included within the amounts shown above. |
W.W. Grainger, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The following is depreciation, amortization and non-cash lease expense (in millions of dollars):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Depreciation, amortization and non-cash lease expense*(1)**:* | |||||||||||
| High-Touch Solutions N.A. | $ | 65 | $ | 58 | |||||||
| Endless Assortment | 15 | 19 | |||||||||
| Other | — | 2 | |||||||||
| Total | $ | 80 | $ | 79 | |||||||
| (1)Depreciation, amortization and non-cash lease expense presented above is related to long-lived assets, capitalized software and right-of-use assets. Long-lived assets consist of property, buildings and equipment. |
The following is revenue by geographic location (in millions of dollars):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Revenue by geographic location*(1)**:* | |||||||||||
| United States | $ | 3,882 | $ | 3,504 | |||||||
| Japan | 589 | 480 | |||||||||
| Canada | 194 | 162 | |||||||||
| Other foreign countries | 77 | 160 | |||||||||
| $ | 4,742 | $ | 4,306 | ||||||||
| (1)Revenue presented above is attributed to the destination country where the customer is located. |
The Company is a broad line distributor of MRO products. Products are regularly added and removed from the Company's inventory assortment. Accordingly, it would be impractical to provide sales information by product category due to the way the business is managed, and the dynamic nature of the inventory offered, including the evolving list of products stocked and additional products available online but not stocked. For further information regarding the Company's sales by segment and customer industry, see Note 2 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1: Financial Statements of this Form 10-Q.
NOTE 7 - CONTINGENCIES AND LEGAL MATTERS
From time to time, the Company is involved in various legal and administrative proceedings, including claims related to: product liability, safety or compliance; privacy and cybersecurity matters; negligence; contract disputes; environmental issues; unclaimed property; wage and hour laws; intellectual property; advertising and marketing; consumer protection; pricing (including disaster or emergency declaration pricing statutes); employment practices; regulatory compliance, including trade and export matters; anti-bribery and corruption; and other matters and actions brought by team members, consumers, competitors, suppliers, customers, governmental entities and other third parties. It is not expected that the ultimate resolution of any of these matters will have, either individually or in the aggregate, a material adverse effect on the Company's consolidated financial position or results of operations.
NOTE 8 - SUBSEQUENT EVENTS
On April 29, 2026, the Company’s Board of Directors declared a quarterly dividend of $2.49 per share, payable June 1, 2026, to shareholders of record on May 11, 2026.
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Previous: Cover and table of contents · Next: Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations