GWW

Industrials

W. W. Grainger

Price Chart

Market Data

Financials

XBRL · SEC EDGAR

2007–2025(19yr)

Revenue

Net Income

Free CF

Metric	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$6.4B	$6.9B	$6.2B	$7.2B	$8.1B	$9.0B	$9.4B	$10.0B	$10.0B	$10.1B	$10.4B	$11.2B	$11.5B	$11.8B	$13.0B	$15.2B	$16.5B	$17.2B	$17.9B	+4.5%
Gross Profit	$2.6B	$2.8B	$2.6B	$3.0B	$3.5B	$3.9B	$4.1B	$4.3B	$4.2B	$4.1B	$4.1B	$4.3B	$4.4B	$4.2B	$4.7B	$5.8B	$6.5B	$6.8B	$7.0B	+3.7%
Gross Margin	40.6%	41.0%	41.8%	41.8%	43.5%	43.8%	43.8%	43.3%	42.4%	40.6%	39.3%	38.7%	38.3%	35.9%	36.2%	38.4%	39.4%	39.4%	39.1%	-0.3pp
Operating Income	$670.7M	$782.7M	$665.2M	$860.5M	$1.1B	$1.1B	$1.3B	$1.3B	$1.3B	$1.1B	$1.0B	$1.2B	$1.3B	$1.0B	$1.5B	$2.2B	$2.6B	$2.6B	$2.5B	-5.4%
Operating Margin	10.4%	11.4%	10.7%	12.0%	13.0%	12.6%	13.7%	13.5%	13.0%	11.0%	10.1%	10.3%	11.0%	8.6%	11.9%	14.5%	15.6%	15.4%	13.9%	-1.5pp
Net Income	$420.1M	$475.4M	$430.5M	$510.9M	$658.4M	$689.9M	$797.0M	$801.7M	$769.0M	$605.9M	$585.7M	$782.0M	$849.0M	$695.0M	$1.0B	$1.5B	$1.8B	$1.9B	$1.7B	-10.6%
Net Margin	6.5%	6.9%	6.9%	7.1%	8.2%	7.7%	8.4%	8.0%	7.7%	6.0%	5.6%	7.0%	7.4%	5.9%	8.0%	10.2%	11.1%	11.1%	9.5%	-1.6pp
Free Cash Flow	$271.5M	$335.1M	$590.0M	$469.3M	$549.2M	$566.3M	$714.4M	$572.4M	$616.0M	$718.7M	$819.3M	$818.0M	$821.0M	$926.0M	$682.0M	$1.1B	$1.6B	$1.6B	$1.3B	-15.2%
FCF Margin	4.2%	4.9%	9.5%	6.5%	6.8%	6.3%	7.6%	5.7%	6.2%	7.1%	7.9%	7.3%	7.1%	7.8%	5.2%	7.1%	9.6%	9.1%	7.4%	-1.7pp
EPS (Diluted)	$4.91	$5.97	$5.62	$6.93	$9.07	$9.52	$11.13	$11.45	$11.58	$9.87	$10.02	$13.73	$15.32	$12.82	$19.84	$30.06	$36.23	$38.71	$35.40	-8.6%

Total Debt$2.5B

Cash & Equiv.$585.0M

Net Debt$1.9B

4 min read

1. THE BIG PICTURE

Grainger is no longer just a warehouse operation; it is a bifurcated business attempting to outrun the maturity of its core North American segment through aggressive digital expansion. While the "High-Touch" business provides the scale and logistics backbone, the future of W. W. Grainger’s valuation rests on its "Endless Assortment" online platforms, which are currently growing nearly seven times faster than the traditional business.

2. WHERE THE RISKS HIT HARDEST

Grainger’s primary competitive strength—its "advantaged supply chain" that promises same-day or next-day delivery—is directly threatened by inflationary pressures in fuel and labor (10-K Item 1A). Because Grainger’s model relies on a dense logistics network to maintain its "KeepStock" inventory services, rising energy costs can compress margins faster than W. W. Grainger can raise prices for its mid-size and large customers. Furthermore, W. W. Grainger’s heavy geographic concentration, with 81% of sales coming from the U.S., makes its accounts receivable highly vulnerable to domestic economic downturns, potentially turning a sales slowdown into a liquidity squeeze (10-K Item 1A).

3. WHAT THE NUMBERS SAY TOGETHER

The financial data reveals a tension between top-line scale and bottom-line efficiency. While Grainger generated $17.91 billion in TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue, it maintains the thinnest margins in its peer group, with a net margin of 9.7% compared to the 21.6% seen at ITW (XBRL). This margin profile is under further pressure; in the most recent quarter, operating margins fell 70 basis points to 14.3% due to "unforeseen healthcare costs" and sluggishness in the North American segment (8-K).

This divergence is critical: total revenue grew 4.5%, but quarterly EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric actually fell 2.8% (8-K). This suggests that Grainger is currently running harder just to stay in place. Sentiment is somewhat cautious, with short interest sitting at 3.8% of the float (Yahoo Finance), likely reflecting concerns that W. W. Grainger’s "High-Touch" segment (up only 2.2%) is losing steam while the "Endless Assortment" segment (up 14.3%) is not yet large enough to protect total company margins from rising corporate overhead.

4. IS IT WORTH IT AT THIS PRICE?

At 22.9x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Grainger trades at an 18% discount to the peer median of 28.0x (Peer Benchmarking). This discount is justified by W. W. Grainger’s position as the lowest-margin operator among its major rivals, including Fastenal and Cintas. According to the CAPM analysis, the current price implies a long-term growth rate of 6.1%.

This growth target is credible but requires flawless execution. If Grainger hits its 2026 guidance of 6.5% to 9.0% organic sales growth, the stock is likely fairly priced. However, the sensitivity analysis suggests significant downside: if growth slows to a GDP-pace of 2.5%, the justified multiple would drop to 12.5x, representing a nearly 45% decline from current levels (CAPM analysis). Investors are essentially betting that the 14.3% growth in the digital segments can permanently replace the slowing growth in the core industrial business.

5. WHAT WOULD CHANGE THIS VIEW?

Constructive if the "Endless Assortment" segment maintains growth above 15% for consecutive quarters, proving the digital model can scale without further eroding consolidated margins.
Cautious if operating margins for 2026 fall below the guided floor of 15.4%, which would indicate that "unforeseen" labor and healthcare costs are a structural trend rather than a one-time quarterly blip.
Cautious if U.S. industrial production indices decline, as Grainger’s 81% U.S. sales concentration leaves it with no geographic hedge against a domestic manufacturing slowdown.

6. BOTTOM LINE

Structural Advantage: A massive, scale-driven logistics network that enables a "High-Touch" service model that smaller regional distributors cannot replicate. Bottom Line: Grainger is a solid, albeit lower-margin, value play that will only see a valuation re-rating if it can prove its digital platforms can drive earnings growth as effectively as they drive sales volume.

Source: Synthesis · LLM Analysis

3 min read

1. Top 5 Material Risks

Inflationary Cost Pressures: Rising costs for products, labor, fuel, and energy may grow faster than net sales. If W. W. Grainger cannot pass these costs to customers in a timely manner, gross profit margins and net earnings will decline.
Supply Chain Vulnerability: W. W. Grainger relies on a logistics network that is susceptible to natural disasters, pandemics, and geopolitical events. Disruptions threaten W. W. Grainger’s ability to meet its same-day and next-day delivery commitments, leading to lost sales and increased costs.
Economic Sensitivity: Demand for W. W. Grainger’s products is tied to the production activity and capital spending of its customers. A slowdown in major economies—specifically the U.S., Canada, Mexico, or Japan—could reduce purchase volumes and increase the risk of customers failing to make timely payments.
Supplier Concentration and Sourcing: While W. W. Grainger sources from over 5,000 primary suppliers (none accounting for more than 5% of total purchases), disruptions in sourcing—particularly from Asia—could lead to inventory shortages and higher costs.
Commodity Price Volatility: Fluctuations in the prices of steel, copper, and petroleum derivatives directly impact product costs. Climate-related regulations and carbon pricing mechanisms may further increase these costs, threatening gross margins if they cannot be passed on to customers.

2. Company-Specific Risks

eCommerce Platform Execution: W. W. Grainger’s growth strategy depends on significant investments in digital platforms and AI. If these systems are perceived as less compelling than competitors' offerings, or if digital marketing efforts fail to attract customers, W. W. Grainger’s financial condition and reputation may suffer.
MonotaRO Ownership: W. W. Grainger holds a controlling interest in MonotaRO, which is listed on the Tokyo Stock Exchange. This exposes W. W. Grainger to risks associated with Japanese securities laws and potential volatility in MonotaRO’s stock price.
Grainger-Branded Products: The inclusion of W. W. Grainger-branded products in the assortment increases the risk of product liability claims and litigation, for which existing insurance or indemnification rights may be insufficient.
Grainger Impact Program: Publicly announced goals regarding carbon footprint reduction and workplace safety create reputational risk. Failure to achieve these goals or changes in reporting standards could lead to increased scrutiny from stakeholders and potential regulatory or legal consequences.

3. Regulatory/Legal Risks

Global Compliance: W. W. Grainger operates under a complex array of international laws, including anti-bribery, antitrust, data privacy (such as the GDPR and California Consumer Privacy Act), and import/export regulations. Failure to comply can result in significant fines, legal fees, and reputational damage.
Government Contracting: Contracts with federal, state, and local entities are subject to specific procurement regulations. Violations can lead to fines, criminal sanctions, and the loss of the ability to participate in future government business.
Intellectual Property: W. W. Grainger must protect its own proprietary information while avoiding infringement on the rights of others. Litigation to defend these rights can be costly and divert management resources.

4. Financial Impact Map

Inflationary Cost Pressures → Gross Profit Margin → Inability to pass product cost increases to customers in a timely manner. Supply Chain Disruptions → Net Sales → Lost sales due to inability to meet same-day and next-day delivery requirements. Economic Downturns → Accounts Receivable → Impairment of customers' ability to make full and timely payments. Commodity Price Volatility → Gross Margin → Fluctuations in raw material costs (steel, copper, petroleum) that cannot be offset by pricing. eCommerce Investments → Operating Expenses → Significant capital expenditures and ongoing costs for technology, AI, and digital marketing.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
14A	Mar 2026	—
10-K	Feb 2026	Dec 2025
8-K	Feb 2026	—
10-Q	Oct 2025	Sep 2025