W.W. Grainger reported fourth-quarter diluted EPS of $9.44, narrowly surpassing the consensus estimate of $9.43. Revenue for the period reached $4.43 billion, a 4.5% increase versus the same quarter in 2024, driven by strong demand across the Endless Assortment platform which contributed to double-digit growth in non-catalog sales. Sales in the core MRO business rose 3.2% year-over-year, while the international segment delivered a 6.8% increase in constant currency terms. These results offset a 70 basis-point contraction in operating margin as supply-chain and labor costs remained elevated.

For the full year, Grainger posted sales of $17.9 billion, up 4.5% over 2024. Operating margin declined by 150 basis points to 13.9%, though on an adjusted basis margin contracted by just 50 basis points to 15.0%. Diluted EPS was $35.40, down 8.6% from the prior year, while adjusted EPS rose 1.3% to $39.48. The company generated $2.0 billion in operating cash flow and returned $1.5 billion to shareholders through dividends and repurchases, reflecting continued financial discipline and commitment to shareholder returns.

Grainger faced margin pressure in 2025 as freight costs increased by 12% and wages rose in response to competitive labor markets. The company absorbed these headwinds by enhancing pricing strategies, raising catalog prices by an average of 2.4%, and improving distribution center efficiencies. Inventory turnover improved to 5.6 times per year, up from 5.4, reducing working capital needs. Grainger’s adjusted operating margin of 15.0% on a full-year basis highlights its ability to partially offset cost inflation through productivity gains and pricing discipline.

Looking ahead, Grainger forecasts daily organic constant-currency sales growth of 6.5% to 9.0% for 2026, supported by continued expansion of its Endless Assortment offerings and digital channels. The company plans to invest $600 million in technology upgrades, including machine-learning algorithms for inventory stocking and predictive analytics for customer demand. With a debt-to-equity ratio of 0.76 and a current ratio of 2.72, Grainger is positioned to fund these initiatives while maintaining a solid liquidity profile. Management reiterated its long-term goal of mid-single-digit sales growth and adjusted operating margin expansion through targeted cost controls and customer-focused service enhancements.