Grainger Beats Earnings Estimates and Raises Full-Year Guidance as Sales Rise 11.3%

W.W. Grainger reported third-quarter 2026 results on Wednesday, beating Wall Street expectations and raising its full-year outlook as strong demand lifted sales across its industrial supply business.

The company said net sales rose 11.3% from a year earlier to $5.18 billion, while adjusted diluted earnings per share climbed 22.8% to $12.54, topping the Zacks Consensus Estimate of $11.64. On a daily, organic constant-currency basis, sales grew 14.9%. Reported diluted earnings per share were $12.42, up 102.9% from $6.12 a year earlier, a comparison flattered by a prior-year loss tied to the company's exit from the U.K. market.

Grainger raised its 2026 sales forecast to $19.8 billion to $20 billion, up from $19.4 billion to $19.7 billion, and lifted its adjusted earnings guidance to $47.00 to $48.00 per share, from $45.50 to $47.25. The company also raised its adjusted operating margin outlook to 16% to 16.2% and its operating cash flow guidance to $2.35 billion to $2.45 billion.

Chairman and CEO D.G. Macpherson said the quarter reflected strong demand and operating leverage, with growth in both of the company's primary segments. Gross margin was 38.8%, up slightly from 38.6% a year earlier, while operating margin reached 16.0%. Grainger returned $396 million to shareholders during the quarter through dividends and share repurchases.

Management also pointed to pricing actions and cost pressures in the quarter, including a 1% price increase in September to help offset inflation from rising freight and product costs. Executives said freight headwinds trimmed about 20 basis points from third-quarter gross margins as diesel and logistics costs rose.

Looking ahead, Grainger expects fourth-quarter sales of more than $4.9 billion, with growth of over 14% at the midpoint on a daily, organic constant-currency basis. The company cautioned that integration costs for newly acquired technology assets would weigh on operating margins by 10 to 15 basis points in the fourth quarter and into 2027 as it scales a new inventory management solution.