Grainger raises its 2026 profit outlook to $47-$48 a share and the stock jumps 7.8%

W.W. Grainger, the largest US distributor of maintenance, repair and operating supplies, reported third-quarter sales of $5.18 billion and raised its full-year earnings outlook, according to its earnings release filed with the SEC. The shares traded at $1,507.44 at 12:42 PM ET, up $109.46 or 7.83%, per Nasdaq quote data.

The numbers, and which ones to use

Q3 2026	2026	2025	Change
Net sales	$5,181M	$4,657M	+11.3%
Gross margin	38.8%	38.6%	+20 bps
Adjusted operating margin	16.1%	15.2%	+90 bps
Adjusted diluted EPS	$12.54	$10.21	+22.8%
Reported diluted EPS	$12.42	$6.12	+102.9%

Source: Grainger Q3 2026 release. Adjusted figures exclude one-time items as defined by the company.

Two headline figures flatter the quarter, and the company says why. Reported EPS more than doubled because last year's quarter carried a loss from exiting the UK market (the sale of Cromwell and closure of Zoro UK), so the adjusted 22.8% is the fair comparison. Likewise, sales rose 11.3% as reported but 14.9% on a daily, organic, constant-currency basis, because the UK businesses are no longer in the base. The organic figure is the one that measures demand.

The number behind the number: the core business earned less per dollar

Grainger's North American High-Touch business, the one that serves contractors and plant maintenance crews, grew sales 13.8% on both a reported and constant-currency basis. The company described the growth as "double-digit volume growth" plus continued price inflation as cost increases were passed along. Yet that segment's gross margin was 40.8%, down 30 basis points, which Grainger attributed to higher freight expense and mix.

The Endless Assortment segment, which includes Japan's MonotaRO and Zoro, grew 19.3% organically and gained 90 basis points of gross margin. So the company-wide margin rose 20 basis points, but the gain came from the online-catalog side, not from the customers in your local industrial park. The release also notes that part of the company-wide gain was a benefit from leaving the UK.

The guidance change

2026 outlook	August 4	November 4
Net sales	$19.4B-$19.7B	$19.8B-$20.0B
Organic daily sales growth	11.5%-13.0%	13.0%-14.5%
Adjusted EPS	$45.50-$47.25	$47.00-$48.00
Operating cash flow	$2.25B-$2.4B	$2.35B-$2.45B

The midpoint of the EPS range moves from $46.38 to $47.50, an increase of about 2.4% (our arithmetic). The low end rose by $1.50 and the high end by only $0.75, so the company narrowed the range toward the top rather than lifting it evenly. Operating margin guidance of 16.0% to 16.2% is also tighter than before. The third-quarter free cash flow was $546 million ($661 million operating cash flow less $115 million of capital spending), and Grainger returned $396 million through dividends and buybacks.

One governance detail from the release: the call was hosted by CEO D.G. Macpherson and Laurie Thomson, identified as Vice President and Interim CFO.

Who it actually hits

Grainger says it serves more than 4.6 million customers, and many of them are small shops that buy gloves, fasteners, pumps and filters by the box. For an owner, "price inflation as cost increases were passed" means the supply invoice moved up while the shipment volume also rose. Our own listings show how many of those buyers there are:

40,729 independent hvac are listed on CheckThisBiz, a directory of 7,704,724 independent US businesses, including 4,171 in TX, 3,613 in FL, 3,273 in CA. Chains and franchises are excluded from that count, so these are the owner-operated businesses that actually apply for funding.

27,975 independent plumbing are listed on CheckThisBiz, a directory of 7,704,724 independent US businesses, including 3,621 in CA, 3,203 in TX, 2,032 in FL. Chains and franchises are excluded from that count, so these are the owner-operated businesses that actually apply for funding.

Our HVAC playbook covers how to keep parts and supply costs from eating a job's margin.

Grainger's results are a read on industrial and contractor demand, and an upbeat one. They are one company's quarter, though, and the market is also weighing the midterm results and a jobs report on Friday; see our pre-market brief for the wider picture.

Sources: Grainger Q3 2026 earnings release (SEC EDGAR); Nasdaq quote data for GWW at 12:42 PM ET Nov. 4, 2026, which may be delayed; Chronicle business counts. This is market information, not investment advice.