10q10k10q10k.net
W. W. Grainger

W. W. GraingerGWWEarnings & Financial Report

NYSE · Industrials · Industrial Machinery & Supplies & Components

W. W. Grainger, Inc. is an American Fortune 500 industrial supply company founded in 1927 in Chicago by the company's namesake William W. (Bill) Grainger. He founded the company to provide consumers with access to a consistent supply of motors. The company now serves more than 4.5 million customers worldwide with offerings such as motors, lighting, material handling, fasteners, plumbing, tools, and safety supplies, along with inventory management services and technical support.

What changed in W. W. Grainger's 10-K — 2024 vs 2025

Top changes in W. W. Grainger's 2025 10-K

219 paragraphs added · 219 removed · 196 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

40 edited+3 added−3 removed27 unchanged
Distribution and Sources of Supply In the large and fragmented MRO industry, Grainger holds an advantaged position with its supply chain infrastructure and a broad in-stock product offering . More than 5,000 primary suppliers worldwide provide Grainger businesses with more than 1.4 million products stocked in Distribution Centers (DCs) and branches globally.
Distribution and Sources of Supply In the large and fragmented MRO industry, Grainger holds an advantaged position with its supply chain infrastructure and a broad in-stock product offering . More than 5,000 primary suppliers worldwide provide Grainger businesses with more than 1.5 million products stocked in Distribution Centers (DCs) and branches globally.
Endless Assortment The Company’s Endless Assortment segment provides a streamlined and transparent online platform with one-stop shopping for millions of products. The Endless Assortment segment includes the Company’s Zoro Tools, Inc. (Zoro) and MonotaRO Co., Ltd. (MonotaRO) online channels which operate predominately in the U.S. and Japan.
Endless Assortment The Company’s Endless Assortment segment provides a streamlined and transparent online platform with one-stop shopping for millions of products. The Endless Assortment segment includes the Company’s Zoro Tools, Inc. (Zoro) and MonotaRO Co., Ltd. (MonotaRO) online channels which operate predominately in the U.S. and Japan, respectively.
No single supplier comprised more than 5% of Grainger's total purchases for the year ended December 31, 2024. In the High-Touch Solutions N.A. segment, DCs are the primary order fulfillment channel, mainly through direct shipments to customers. Automation in the DCs allows orders to ship complete with next-day delivery and also replenish branches that provide same-day availability to customers.
No single supplier comprised more than 5% of Grainger's total purchases for the year ended December 31, 2025. In the High-Touch Solutions N.A. segment, DCs are the primary order fulfillment channel, mainly through direct shipments to customers. Automation in the DCs allows orders to ship complete with next-day delivery and also replenish branches that provide same-day availability to customers.
The North American Customer Service Centers handle customer interactions for the region via phone, email, eCommerce portals and online chat. In the Endless Assortment segment, customers are typically smaller and mid-size businesses with less complex purchasing operations and processes. Customers served in this segment have straight-forward product and service needs. Additionally, MonotaRO continues to attract and retain large enterprise customers.
The North American Customer Service Centers manage customer interactions for the region via phone, email, eCommerce portals and online chat. In the Endless Assortment segment, customers are typically smaller and mid-size businesses with less complex purchasing operations and processes. Customers served in this segment have straight-forward product and service needs. Additionally, MonotaRO continues to attract and retain large enterprise customers.
The Grainger Edge Grainger's strategic framework, “The Grainger Edge,” uniquely defines the Company by asserting why it exists, how it serves customers and how team members work together to achieve its objectives. Grainger’s purpose is We Keep the World Working®, which in turn allows customers to focus on the core of their businesses and do what they do best.
The Grainger Edge Grainger's strategic framework, the Grainger Edge®, uniquely defines the Company by asserting why it exists, how it serves customers and how team members work together to achieve its objectives. Grainger’s purpose is We Keep The World Working®, which in turn allows customers to focus on the core of their businesses and do what they do best.
For further segment information, see Part II, Item 7: Management’s Discussion and Analysis (MD&A) of Financial Condition and Results of Operations and Note 12 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. Below is a description of Grainger’s reportable segments and other businesses. High-Touch Solutions N.A.
For further segment information, see Part II, Item 7: Management’s Discussion and Analysis (MD&A) of Financial Condition and Results of Operations and Note 13 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. Below is a description of Grainger’s reportable segments and other businesses. High-Touch Solutions N.A.
Grainger’s customers range from smaller businesses to large corporations, government entities and other institutions, representing a broad collection of industries, including, but not limited to commercial, healthcare, and manufacturing. No single end customer accounted fo r more than 10% of to tal sales for the year ended December 31, 2024.
Grainger’s customers range from smaller businesses to large corporations, government entities and other institutions, representing a broad collection of industries, including, but not limited to commercial, healthcare, and manufacturing. No single end customer accounted fo r more than 10% of to tal sales for the year ended December 31, 2025.
Prior to Grainger, Mr. Macpherson served as Partner and Managing Director at Boston Consulting Group, a global management consulting firm. Deidra C. Merriwether (56) Senior Vice President and Chief Financial Officer, since January 2021. Ms. Merriwether previously served as Senior Vice President, and President, North American Sales & Services, from November 2019 to December 2020, Senior Vice President, U.S.
Prior to Grainger, Mr. Macpherson served as Partner and Managing Director at Boston Consulting Group, a global management consulting firm. Deidra C. Merriwether (57) Senior Vice President and Chief Financial Officer, since January 2021. Ms. Merriwether previously served as Senior Vice President, and President, North American Sales & Services, from November 2019 to December 2020, Senior Vice President, U.S.
Executive officers of Grainger generally serve until the next annual appointment of officers, or until earlier resignation or removal. Name and Age Positions and Offices Held and Principal Occupation and Employment Nancy L. Berardinelli-Krantz (47) Senior Vice President and Chief Legal Officer since January 2023. Ms.
Executive officers of Grainger generally serve until the next annual appointment of officers, or until earlier resignation or removal. Name and Age Positions and Offices Held and Principal Occupation and Employment Nancy L. Berardinelli-Krantz (48) Senior Vice President and Chief Legal Officer since January 2023. Ms.
Merriwether held various positions of increasing responsibility at Sears Holdings Corporation, a broadline retailer, PricewaterhouseCoopers LLP, a global professional services firm, and Eli Lilly & Company, a global pharmaceutical company. Paige K. Robbins (56) Senior Vice President and President, Grainger Business Unit since January 2021. Ms.
Merriwether held various positions of increasing responsibility at Sears Holdings Corporation, a broadline retailer, PricewaterhouseCoopers LLP, a global professional services firm, and Eli Lilly & Company, a global pharmaceutical company. Paige K. Robbins (57) Senior Vice President and President, Grainger Business Unit since January 2021. Ms.
The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. 9 Information about Executive Officers Following is information about the executive officers of Grainger, including age, as of January 31, 2025.
The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. 9 Information about Executive Officers Following is information about the executive officers of Grainger, including age, as of January 31, 2026.
Prior to Grainger, Ms. Robbins served as Partner and Managing Director at Boston Consulting Group, a global management consulting firm. 10 Laurie R. Thomson (51) Vice President, Controller and principal accounting officer since May 2021. Ms.
Prior to Grainger, Ms. Robbins served as Partner and Managing Director at Boston Consulting Group, a global management consulting firm. 10 Laurie R. Thomson (52) Vice President, Controller and principal accounting officer since May 2021. Ms.
The following provides a high-level view of the Company's busin ess models: 5 Customers The Company uses a c ombination of its two business models to serve its more than 4.5 million cu stomers worldwide which rely on Grainger for products and services that enable them to run safe, sustainable and productive operations.
The following provides a high-level view of the Company's business models: 5 Customers The Company uses a c ombination of its two business models to serve its more than 4.6 million cu stomers worldwide which rely on Grainger for products and services that enable them to run safe, sustainable and productive operations.
D.G. Macpherson (57) Chairman of the Board, since October 2017 and Chief Executive Officer since October 2016 at which time he was also appointed to the Board of Directors. Mr.
D.G. Macpherson (58) Chairman of the Board, since October 2017 and Chief Executive Officer since October 2016 at which time he was also appointed to the Board of Directors. Mr.
This framework helps the Company execute its strategy and create value for shareholders. The Grainger Edge principles work as a system and guide the Company’s actions supporting health and safety, an inclusive workplace, and team member experience, including talent acquisition, retention, development and compensation and benefits.
This framework helps the Company execute its strategy and create value for shareholders. The Grainger Edge® principles work as a system and guide the Company’s actions supporting health and safety, a welcoming workplace, and team member experience, including talent acquisition, retention, development and compensation and benefits.
In the High-Touch Solutions N.A. segment, customers are typically mid-size and large businesses with complex purchasing operations and processes. Many customers served in this segment expect product and service depth and are focused on total cost of procurement. C ustomers in this segment utilize sophisticated electronic purchasing platforms that communicate directly with Grainger.com through eProcurement technology.
In the High-Touch Solutions N.A. segment, customers are typically mid-size and large businesses with complex purchasing operations and processes. Many customers served in this segment expect product and service depth and are focused on total cost of procurement. C ustomers in this segment utilize sophisticated electronic purchasing platforms that communicate directly with Grainger's systems through eProcurement technology.
Compliance with these laws, regulations and standards requires the dedication of time and effort of team members as well as financial resources. In 2024, compliance with the applicable laws, regulations and standards did not have a material effect on capital expenditures, earnings or competitive position.
Compliance with these laws, regulations and standards requires the dedication of time and effort of team members as well as financial resources. In 2025, compliance with the applicable laws, regulations and standards did not have a material effect on capital allocation, earnings or competitive position.
In addition to Grainger’s U.S. based operations, which in 2024 generated approximately 82% of its consolidated net sales, Grainger operates its business principally through wholly owned subsidiaries in Canada, Mexico and the U.K., and through its majority-owned subsidiary in Japan.
In addition to Grainger’s U.S. based operations, which in 2025 generated approximately 81% of its consolidated net sales, Grainger operates its business principally through wholly owned subsidiaries in Canada, Mexico and the U.K., and through its majority-owned subsidiary in Japan.
No single product category comprised more than 20% of the Company's sales for the year ended December 31, 2024. In the High-Touch Solutions N.A. segment, Grainger.com provides real-time price and product availability, detailed product information and features, such as product search and compare capabilities.
No single product category compri sed more than 20% of the Company's sales for the year ended December 31, 2025. In the High-Touch Solutions N.A. segment, Grainger.com provides real-time product availability and price, as well as detailed product information and features, such as product search and compare capabilities.
The Company understands that future business success requires a mix of current and new skill sets, multiple experiences, and a broad array of backgrounds and perspectives, and strives to reflect this in its hiring, retention and promotion practices. The Company aspires to increasingly promote a welcoming, inclusive culture that values all people. Grainger's commitment to inclusion applies throughout the organization.
The Company understands that future business success requires a mix of current and new skill sets, multiple experiences, and a broad array of backgrounds and perspectives, and strives to reflect this in its hiring, retention and promotion practices. The Company aspires to increasingly promote a welcoming culture that values all people.
Item 1: Business W.W. Grainger, Inc., incorporated in the State of Illinois in 1928, is a broad line, distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America, Japan and the United Kingdom (U.K.). In this report, the words “Grainger” or “Company” mean W.W.
Item 1: Business W.W. Grainger, Inc., incorporated in the State of Illinois in 1928, is a broad line, distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America, Japan and the United Kingdom (U.K.).
Zoro offers more than 14 million products and MonotaRO provides access to more than 24 million products, primarily through its websites and catalogs. The endless assortment businesses continue to enhance assortment by strategically ad ding products and expanding the offer of third party held products.
Zoro offers approximately 13 million products and MonotaRO provides access to approximately 29 million products, primarily through its websites and catalogs. The endless assortment businesses continue to enhance assortment by strategically ad ding products and expanding the offer of third party held products.
Grainger believes that a purpose-driven culture is an asset that creates a sustainable, competitive advantage for the Company. Building on its strong foundation while evolving a framework to address the future is critical to Grainger’s continued success. Grainger has been consistently recognized for its commitment to its culture, an inclusive workplace and team member engagement.
Grainger believes that a purpose-driven culture is an asset that creates a sustainable, competitive advantage for the Company. Building on its strong foundation while evolving a framework to address the future is critical to Grainger’s continued success.
This includes press releases and other information about financial performance, information on environmental, social and governance matters, and details related to the Company’s annual meeting of shareholders.
This includes press releases and other information about financial performance, information on Grainger's Impact Program, and details related to the Company’s annual meeting of shareholders.
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. For financial information regarding the Company, see the Consolidated Financial Statements and Notes included in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K.
Grainger, Inc. itself and not its subsidiaries. For financial information regarding the Company, see the Consolidated Financial Statements and Notes included in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K.
In 2024 , the Company’s Occupational Safety and Health Administration Total Recordable Incident Rate in the U .S. was 1.3 and the Company’s Lost Time Incident Rate in the U.S. was 0.5 based upon the number of incidents per 100 team members (or per 200,000 work hours).
Managing and reducing risks at DCs and other facilities remain a core objective. In 2025 , the Company’s Occupational Safety and Health Administration Total Recordable Incident Rate in the U .S. was 1.3 and the Company’s Lost Time Incident Rate in the U.S. was 0.7 based upon the number of incidents per 100 team members (or per 200,000 work hours).
The Company is committed to providing team members with resources designed to help them succeed. Grainger focuses on creating opportunities for team member growth, development and training, including offering a comprehensive talent program that continues throughout a team member’s career. This talent program is comprised of performance 8 management, career management, professional development learning opportunities and milestone leadership development programs.
Talent Acquisition, Retention and Development Grainger believes that a great customer experience starts with a great team member experience. The Company is committed to providing team members with resources designed to help them succeed. Grainger focuses on creating opportunities for team member growth, development and training, including offering a comprehensive talent program that continues throughout a team member’s career.
Approximately 85% of these team members are located in North America, 9% in Asia and 6% in Europe. 7 Workplace Practices and Policies The Company's strategic framework, The Grainger Edge, outlines a set of principles that define the behaviors expected from Grainger’s team members in working with each other and the Company's customers, suppliers and communities.
Within Grainger’s global workforce, approximately 42% of team members are women and approximately 39% of U.S. team members are racially and ethnically diverse. Workplace Practices and Policies The Company's strategic framework, the Grainger Edge®, outlines a set of principles that define the behaviors expected from Grainger’s team members in working with each other and the Company's customers, suppliers and communities.
As of December 31, 2024, the Company’s Board of Directors is comprised of approximately 31% female and 23% racially and ethnically diverse directors. Grainger also maintains this commitment with the executive leadership teams. Grainger's global executive leadership team is comprised of approximately 33% women leaders.
As of December 31, 2025, the Company’s Board of Directors is comprised of approximately 33% female and 25% racially and ethnically diverse directors. Grainger's global executive leadership team is comprised of approximately 45% women leaders. The U.S. based executive leadership team is comprised of approximately 27% racially and ethnically diverse leaders.
Compensation and Benefits Grainger believes that its futu re success is highly dependent upon the Company’s continued ability to attract, retain and motivate team members.
This talent program is comprised of performance 8 management, career management, professional development learning opportunities and milestone leadership development programs. Compensation and Benefits Grainger believes that its futu re success is highly dependent upon the Company’s continued ability to attract, retain and motivate team members.
Inclusive Workplace Grainger believes a broad talent pool is essential to live its principles, foster innovation, build high-performing teams and drive business results.
Approximately 90% of these team members are located in North America and 10% in Asia. Grainger believes a broad talent pool is essential to live its principles, foster innovation, build high-performing teams and drive business results.
Grainger has taken steps to protect these service marks and trademarks against infringement and believes they will remain available for future use in its business. Seasonality Grainger sells products that may have seasonal demand fluctuations during the winter or summer seasons or during periods of natural disasters. However, historical seasonality impacts have not been material to Grainger’s operating results.
Seasonality Grainger sells products that may have seasonal demand fluctuations during the winter or summer seasons or during periods of natural disasters. However, historical seasonality impacts have not been material to Grainger’s operating results.
Thomson served as Director, Internal Audit at CVS Health Corporation, a pharmacy healthcare provider, and Audit Manager at Arthur Andersen LLP, a professional services firm. Ms. Thomson is a certified public accountant. 11
Thomson served as Director, Internal Audit at CVS Health Corporation, a pharmacy healthcare provider, and Audit Manager at Arthur Andersen LLP, a professional services firm. Ms. Thomson is a certified public accountant. Melanie Tinto (54) Senior Vice President, Chief Human Resources Officer joined Grainger in April 2025. Ms. Tinto previously served as Chief Human Resources Officer for WEX, Inc.
MonotaRO fulfills customer orders through local DCs and third-party drop shipments. For further information on the Company’s properties, see Part I, Item 2: Properties of this Form 10-K. Trademarks and Service Marks Grainger conducts business under various trademarks and service marks.
Zoro leverages the High-Touch Solution N.A.'s DC network and third-party drop shipments to deliver seamless service and product fulfillment to customers. MonotaRO fulfills customer orders through local DCs and third-party drop shipments. For further information on the Company’s properties, see Part I, Item 2: Properties of this Form 10-K.
Other Other businesses is primarily comprised of the Company's Cromwell business in the U.K. and a wholly owned captive insurance entity .
Other Other businesses is primarily comprised of the Company's Cromwell business in the U.K. and a wholly owned captive insurance entity. These businesses individually and in the aggregate do not meet the criteria of a reportable segment. On December 17, 2025, Grainger completed the sale of the Cromwell business.
Berardinelli-Krantz served in senior leadership positions at The Goodyear Tire & Rubber Company, a multinational tire manufacturer, and worked at Jones Day, an international law firm. Ms.
Berardinelli-Krantz served in senior leadership positions at The Goodyear Tire & Rubber Company, a multinational tire manufacturer, and worked at Jones Day, an international law firm. Ms. Berardinelli-Krantz is a veteran of the United States Army and Judge Advocate General’s Corps. Jonny LeRoy (54) Senior Vice President and Chief Technology Officer since April 2020. Mr.
Approximately 20% of 2024 sales were private label MRO items bearing Grainger’s registered trademarks, including DAYTON®, GRAINGER®, CONDOR®, WESTWARD®, TOUGH GUY®, SPEEDAIRE®, LUMAPRO®, and AIR HANDLER®. Grainger also provides a suite of inventory services to its customers under the KEEPSTOCK® brand, which is a registered service mark.
Trademarks and Service Marks Grainger conducts business under various trademarks and service marks, including DAYTON®, GRAINGER®, CONDOR®, WESTWARD®, SPEEDAIRE®, TOUGH GUY®, LUMAPRO®, ZORO® and AIR HANDLER®. Approximately 19% of 2025 U.S. stocked product sales, within the High-Touch Solutions N.A. segment, were private label MRO items bearing Grainger’s registered trademarks.
These businesses individually and in the aggregate do not meet the criteria of a reportable segment. 4 Business Models Competing with both high-touch solutions and endless assortment business models allows Grainger to leverage its scale and advantaged supply chain to meet the changing needs of its customers.
See Note 2 of the Notes to the Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K for more information on the sale of the Cromwell business. 4 Business Models Competing with both high-touch solutions and endless assortment business models allows Grainger to leverage its scale and advantaged supply chain to meet the changing needs of its customers.
Team Member Profile As of December 31, 2024, Gr ainger had more than 26,000 team members worldwide, of whom approximately 23,500 were full-time and 3,000 were part-time or temporary.
Grainger has been consistently recognized for its commitment to its culture, welcoming workplace and team member engagement. 7 Team Member and Workplace Profile As of December 31, 2025 , Grainger had approximately 25,000 team members worldwide, of whom approximately 22,100 were full-time and 2,900 were part-time or temporary.
Addit ionally, 6 Grainger offers comprehensive inventory management through its KeepStock® program that includes vendor-managed inventory, customer-managed inventory and onsite vending machines . In the Endless Assortment segment, orders are placed primarily through online channels. Zoro leverages the High-Touch Solution N.A.'s DC network and third-party drop shipments to deliver seamless service and product fulfillment to customers.
Addit ionally, Grainger offers comprehensive inventory management through its KeepStock® program which provides onsite industry expertise, flexible storage solutions and intuitive customer tools powered by proprietary processes and technology. 6 In the Endless Assortment segment, orders are placed primarily through online channels.
Removed
Managing and reducing risks at DCs and other facilities remain a core objective and injury rates continue to be low.
Added
In the fourth quarter of 2025, Grainger exited the 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.
Removed
The U.S. based executive leadership team is comprised of approximately 27% racially and ethnically diverse leaders. Within Grainger’s global workforce, approximately 42% of team members were women and approximately 39% of U.S. team members were racially and ethnically diverse. Talent Acquisition, Retention and Development Grainger believes that a great customer experience starts with a great team member experience.
Added
Grainger also provides a suite of inventory services to its customers under the KEEPSTOCK® brand, which is a registered service mark. Grainger has taken steps to protect these service marks and trademarks against infringement and believes they will remain available for future use in its business.
Removed
Berardinelli-Krantz is a veteran of the United States Army and Judge Advocate General’s Corps, where she served as a trial attorney in Fort Hood, Texas, and for the Contract Appeals Division in Washington, D.C. She also served as a trial defense counsel in Baghdad, Iraq. Jonny LeRoy (53) Senior Vice President and Chief Technology Officer since April 2020. Mr.
Added
(WEX), a financial technology solutions provider, from 2018 to April 2025. Prior to WEX, Ms. Tinto served as Vice President of Global Talent Acquisition and Chief Learning Officer of Medtronic plc, a global medical technology company, and previously held senior leadership roles at HP Inc., Walmart, Inc. and Bank of America Corporation. 11

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

78 edited+4 added−5 removed78 unchanged
The level of demand for Grainger's products and services is influenced in multiple ways by the price and availability of raw materials and commodities, including fuel. For example, climate-related regulations on transportation emissions could increase fuel costs, 13 thereby impacting the cost of product distribution.
The level of demand for Grainger's products and services is influenced in multiple ways by the price and availability of raw materials and 13 commodities, including fuel. For example, climate-related regulations on transportation emissions could increase fuel costs, thereby impacting the cost of product distribution.
These deficiencies and other failures of AI systems could subject Grainger to competitive harm, regulatory action, legal liability, including under new proposed legislation regulating AI in jurisdictions such as the U.S. and European Union, new applications of existing data protection, privacy, intellectual property, and other laws, and brand or reputational harm.
These deficiencies and other failures of AI systems could subject Grainger to competitive harm, regulatory action, legal liability, including under new and proposed legislation regulating AI in jurisdictions such as the U.S. and European Union, new applications of existing data protection, privacy, intellectual property, and other laws, and brand or reputational harm.
The agreements governing Grainger’s debt agreements and instruments contain representations, warranties, affirmative, negative and financial covenants, and default provisions. Grainger’s failure to comply with these restrictions and obligations could result in a default under such agreements, which may allow Grainger’s creditors to accelerate the related indebtedness.
The agreements governing Grainger’s debt obligations and instruments contain representations, warranties, affirmative, negative and financial covenants, and default provisions. Grainger’s failure to comply with these restrictions and obligations could result in a default under such agreements, which may allow Grainger’s creditors to accelerate the related indebtedness.
Certain policies, including carbon pricing, emissions trading systems, and regulations limiting industrial emissions, may further contribute to cost fluctuations for fuel, energy, and raw materials. Further changes in U.S. trade policy (including new or additional increases in duties or tariffs) and retaliatory actions by U.S. trade partners could result in a worsening of economic conditions.
Certain policies, including carbon pricing, emissions trading systems, and regulations limiting industrial emissions, may further contribute to cost fluctuations for fuel, energy, and raw materials. Further changes in U.S. and foreign trade policy (including new or additional increases in duties or tariffs), including retaliatory actions by U.S. trade partners, could result in a worsening of economic conditions.
Market variables, such as inflation of product costs, labor rates, fuel, freight and energy costs, as well as geopolitical events, could negatively impact Grainger's ability to effectively manage its operating and administrative expenses. For example, geopolitical conflicts and related international responses have and may continue to exacerbate inflationary pressures, including increases in fuel and other energy costs.
Market variables, such as inflation of product costs, labor rates, fuel, freight and energy costs, as well as geopolitical events, could negatively impact Grainger's ability to effectively manage its operating and administrative expenses. For example, geopolitical conflicts and related international responses have exacerbated, and may continue to exacerbate inflationary pressures, including increases in fuel and other energy costs.
The performance of Grainger’s stock price could impact Grainger’s use of equity-based compensation to attract and retain executives and other key team members. The success of Grainger's team member hiring and retention also depends on Grainger's ability to build and maintain a workplace culture that enables all team members to have the opportunity for a fulfilling and meaningful career.
The performance of Grainger’s stock price could impact Grainger’s use of equity-based compensation to attract and retain executives and other key team members. The success of Grainger's team member hiring and retention also 16 depends on Grainger's ability to build and maintain a workplace culture that enables all team members to have the opportunity for a fulfilling and meaningful career.
Moreover, Grainger is also subject to audits and inquiries in the normal course of business. Failure to comply with any of these laws, regulations and standards could result in civil, criminal, monetary and non-monetary fines, penalties, remediation costs and/or significant legal fees as well as potential damage to Grainger’s reputation.
Moreover, Grainger is also subject to audits and inquiries in the normal course of business. Failure to promptly comply with any of these laws, regulations and standards could result in civil, criminal, monetary and non-monetary fines, penalties, remediation costs and/or significant legal fees as well as potential damage to Grainger’s reputation.
Any such failure to comply or violation could individually or in the aggregate materially adversely affect Grainger’s financial condition, results of operations and cash flows. Grainger is subject to a number of rules and regulations related to its government contracts, which may result in increased compliance costs and potential liabilities.
Any such failure to comply or violation could individually or in the aggregate materially adversely affect Grainger’s financial condition, results of operations and cash flows. 20 Grainger is subject to a number of rules and regulations related to its government contracts, which may result in increased compliance costs and potential liabilities.
Additionally, Grainger’s obligations to comply with the evolving legal and regulatory landscape could entail significant costs or limit its ability to incorporate certain AI capabilities into its digital platforms. Some AI capabilities also present ethical issues, and Grainger may be unsuccessful in identifying or resolving issues before they arise.
Additionally, Grainger’s obligations to comply with the evolving legal and regulatory landscape could entail significant costs or limit its ability to incorporate certain AI capabilities into its digital platforms. Some AI capabilities also present ethical 18 issues, and Grainger may be unsuccessful in identifying or resolving issues before they arise.
Generally, higher wages and benefit costs, competition for talent, and the risk of an increase in team member turnover, could adversely affect Grainger's results of operations. Moreover, changes in immigration policies may impair our ability to recruit and hire technical and professional talent globally.
Generally, higher wages and benefit costs, competition for talent, and the risk of an increase in team member turnover, could adversely affect Grainger's results of operations. Moreover, changes in immigration policies may impair our ability to recruit, hire and retain technical and professional talent globally.
For products sold in the U.S., Canada, and Mexico, Grainger requires its suppliers and sub-suppliers, to comply with Grainger’s Supplier Code of Ethics, or other similar responsible sourcing standards, as a condition of doing business with Grainger.
For products sold in the U.S., Canada, Mexico and Japan, Grainger requires its suppliers and sub-suppliers, to comply with Grainger’s Supplier Code of Ethics, or other similar responsible sourcing standards, as a condition of doing business with Grainger.
The successful execution of Grainger’s eCommerce growth strategy depends on a number of factors, including Grainger’s investment in its eCommerce platforms, consumer preferences and purchasing trends, and the ability to deliver a seamless procurement experience across digital and also physical retail channels.
The successful execution of Grainger’s eCommerce growth strategy depends on a number of factors, including Grainger’s investment in its eCommerce platforms, consumer preferences and purchasing trends, and the ability to deliver a seamless procurement experience across digital and physical retail channels.
For example, Grainger relies in part on internet search engines to drive traffic to its websites, and the reach of Grainger’s eCommerce channels is impacted by how and 15 where its websites rank in both paid and unpaid search results.
For example, Grainger relies in part on internet search engines to drive traffic to its websites, and the reach of Grainger’s eCommerce channels is impacted by how and where its websites rank in both paid and unpaid search results.
Grainger may not be able to pass rising product costs to customers if those customers have ready product or supplier alternatives in the marketplace. These pressures could have a material effect on Grainger’s sales and profitability.
Grainger may not be able to pass rising product costs to customers if those customers have product or supplier alternatives in the marketplace. These pressures could have a material effect on Grainger’s sales and profitability.
Grainger also may be subject to disputes and proceedings incidental to its business, including product-related claims for personal injury or illness, death, environmental or property damage or other commercial disputes, and the types of matters discussed in Note 13 to the Consolidated Financial Statements included in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K.
Grainger also may be subject to disputes and proceedings incidental to its business, including product-related claims for personal injury or illness, death, environmental or property damage or other commercial disputes, and the types of matters discussed in Note 14 to the Consolidated Financial Statements included in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K.
Such a breach could also cause Grainger to make changes to its information systems and administrative processes to address security issues. Although Grainger maintains insurance coverage that may, subject to policy terms and conditions, cover certain aspects of cybersecurity risks, depending on the nature, location and extent of any event, such insurance coverage may be insufficient to cover all losses.
Such a breach could also cause Grainger to make changes to its information systems and administrative processes to address security issues. Although Grainger maintains insurance coverage that may, subject to policy terms and conditions, cover certain aspects of cybersecurity risks, depending on the nature, scope and extent of any event, such insurance coverage may be insufficient to cover all losses.
Any such 20 penalties could result in damage to Grainger’s reputation, increased costs of compliance and/or remediation and could adversely affect Grainger’s financial condition and results of operations.
Any such penalties could result in damage to Grainger’s reputation, increased costs of compliance and/or remediation and could adversely affect Grainger’s financial condition and results of operations.
Grainger has a controlling ownership interest in MonotaRO, which is listed on the Tokyo Stock Exchange (TSE). MonotaRO's disclosure and reporting obligations under TSE listing requirements and Japanese securities laws, including the timing of such obligations, may vary from Grainger's obligations under New York Stock Exchange listing requirements and U.S. securities laws.
Grainger has a controlling ownership interest in MonotaRO, which is listed on the Tokyo Stock Exchange (TSE). MonotaRO's disclosure and reporting obligations under TSE listing requirements and Japanese securities laws, including the timing of such obligations, vary and may continue to vary from Grainger's obligations under New York Stock Exchange listing requirements and U.S. securities laws.
Any inability to obtain financing when needed could materially adversely affect the Company’s business, financial condition or results of operations. 21
Any inability to obtain financing when needed could materially adversely affect the Company’s business, financial condition or results of operations.
As its eCommerce platforms have grown in recent years, Grainger has increased, and expects to continue to increase, its investments in developing, managing and implementing technology information systems, software development and other capabilities to provide simplified customer interactions and to provide high-quality, user-friendly service to its customers and streamline customer interactions.
As its eCommerce platforms have grown in recent years, Grainger has increased, and expects to continue to increase, its investments in developing, managing and implementing technology information systems, software development, machine learning and other capabilities to provide simplified customer interactions and to provide high-quality, user-friendly service to its customers and streamline customer interactions.
If successful, cybersecurity incidents may expose Grainger to risk of loss or misuse of proprietary or confidential information or disruptions of business operations.
If successful, incidents may expose Grainger to risk of loss or misuse of proprietary or confidential information or disruptions of business operations.
In addition, Grainger is exposed to foreign currency exchange rate risk with respect to the U.S. dollar relative to the local currencies of Grainger’s international subsidiaries, primarily the Japanese yen, Mexican peso, Canadian dollar, and British pound sterling, arising from transactions in the normal course of business, such as sales and loans to wholly owned subsidiaries, sales to customers, purchases from suppliers, and bank loans and lines of credit denominated in foreign currencies.
In addition, Grainger is exposed to foreign currency exchange rate risk with respect to the U.S. dollar relative to the local currencies of Grainger’s international subsidiaries, primarily the Japanese yen, Mexican peso, and Canadian dollar, arising from transactions in the normal course of business, such as sales and loans to wholly owned subsidiaries, sales to customers, purchases from suppliers, and bank loans and lines of credit denominated in foreign currencies.
To manage these potential pressures, Grainger continuously considers the adoption of new operating initiatives, including new marketing programs, productivity improvements, inventory management and loss prevention initiatives, practical applications of artificial intelligence (AI) and other similar strategies.
To manage these potential pressures, Grainger routinely considers the adoption of new operating initiatives, including new marketing programs, productivity improvements, inventory management and loss prevention initiatives, practical applications of artificial intelligence (AI) and other similar strategies.
Developing, upgrading, managing or implementing new technologies, including AI, business applications, strategies and innovations may require significant investment of resources by Grainger, may result in unexpected costs and disruptions to operations, may take longer than expected, may increase Grainger's vulnerability to cyber breaches, attacks or intrusions, and may not provide all anticipated benefits.
Developing, upgrading, managing or implementing new technologies, including AI, business applications, strategies and innovations may require significant investment of resources by Grainger, may result in unexpected costs and disruptions to operations, may take longer than expected, may increase Grainger's vulnerability to cyber security incidents, attacks or intrusions, and may not provide all anticipated benefits.
Grainger’s processes and controls for reporting such matters across its operations and supply chain are evolving along with multiple disparate standards for identification, measurement, and reporting Regulatory disclosure standards are or may become required by the SEC, European and other regulators (including, but not limited to, the EU Corporate Sustainability Reporting Directive, the EU Corporate Sustainability Due Diligence Directive, the state of California’s new climate change disclosure requirements, and climate-change disclosure requirements from the SEC that may become effective), and such standards may change over time, which could result in revisions to Grainger’s current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.
Grainger’s processes and controls for reporting such matters across its operations and supply chain are evolving along with multiple disparate standards for identification, measurement, and reporting regulatory disclosure standards are or may become required by the SEC, European and other regulators (including, but not limited to, the EU Corporate Sustainability Reporting Directive, the EU Corporate Sustainability Due Diligence Directive, and other state or federal climate change disclosure requirements that may become effective), and such standards may change over time, which could result in revisions to Grainger’s current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.
Grainger’s eCommerce channels are subject to risks related to online payment methods and other online transactions, including through purchasing platforms. Grainger accepts a variety of payment methods via its eCommerce channels, including credit card, debit card, PayPal and other payment methods and other online transactions, including through its eProcurement technologies which communicate directly with Grainger.com and Grainger's other eCommerce channels.
Grainger’s eCommerce channels are subject to risks related to online payment methods and other online transactions, including through purchasing platforms. Grainger accepts a variety of payment methods via its eCommerce channels, including credit card, debit card, and other payment methods and other online transactions, including through its eProcurement technologies that communicate directly with Grainger.com and Grainger's other eCommerce channels.
In order to compete and have continued growth, Grainger must attract, train, motivate, develop, and retain executives and other key team members, including those in managerial, technical, sales, supply chain, technology development and information technology positions. Grainger competes to hire team members at increasingly competitive wage rates and then must train them and develop their skills and competencies.
In order to compete and experience continued growth, Grainger must attract, train, motivate, develop, and retain executives and other key team members, including those in managerial, technical, sales, supply chain, technology development, data science and information technology positions. Grainger competes to hire team members at increasingly competitive wage rates and then must train them and develop their skills and competencies.
Accordingly, a significant or prolonged slowdown in economic activity in Canada, Japan, Mexico, the U.K., the U.S. or any other major world economy, or a segment of any such economy, could negatively impact Grainger’s sales and results of operations.
Accordingly, a significant or prolonged slowdown in economic activity in Canada, Japan, Mexico, the U.S. or any other major world economy, or a segment of any such economy, could negatively impact Grainger’s sales, results of operations and cash flow.
Methodologies for reporting environmental and social data may be updated and previously reported data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of Grainger’s operations and other changes in circumstances.
Methodologies for reporting applicable data may be updated and previously reported data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of Grainger’s operations and other changes in circumstances.
Grainger’s pursuit of or inability to update, achieve, or accurately report its goals could damage its reputation, financial performance, and growth, leading to increased scrutiny from customers, enforcement authorities, and other various stakeholders and potential risks related to "anti-ESG sentiment", such as reputational harm, lawsuits, or market access restrictions.
Grainger’s pursuit of or inability to update, achieve, or accurately report its goals could damage its reputation, financial performance, and growth, leading to increased scrutiny from customers, enforcement authorities, and other various stakeholders and potential risks such as reputational harm, lawsuits, or market access restrictions.
In addition, a Grainger team member, contractor or other third party with whom Grainger does business may attempt to circumvent security measures or otherwise access Grainger’s information. Grainger’s systems are integrated with customer systems and a breach of Grainger's systems could be used as an attempt to gain illicit access to customer systems and information.
In addition, a Grainger team member, contractor or other third party with whom Grainger does business may attempt to circumvent security measures or otherwise access Grainger’s information. Grainger’s systems may have integrations with customer systems and a breach of Grainger's systems could be used as an attempt to gain illicit access to customer systems and information.
Grainger has incurred indebtedness and may incur additional indebtedness, which could adversely affect cash flow, decrease business flexibility, or prevent Grainger from fulfilling its obligations. As of December 31, 2024, Grainger’s consolidated indebtedness was approximately $2.8 billion.
Grainger has incurred indebtedness and may incur additional indebtedness, which could adversely affect cash flow, decrease business flexibility, or prevent Grainger from fulfilling its obligations. As of December 31, 2025, Grainger’s consolidated indebtedness was approximately $2.5 billion.
Moreover, Grainger shares information with these third parties in connection with the products and services they provide to the business.
Grainger shares information with third parties in connection with the products and services they provide to the business.
Grainger’s business is subject to legislative, legal, and regulatory risks and conditions specific to the countries in which it operates. In addition to Grainger’s U.S. operations, which in 2024 generated approximately 82% of its consolidated net sales, Grainger operates its business principally through wholly owned subsidiaries in Canada, Mexico, and the U.K., and its majority-owned subsidiary in Japan.
Grainger’s business is subject to legislative, legal, and regulatory risks and conditions specific to the countries in which it operates. In addition to Grainger’s U.S. operations, which in 2025 generated approximately 81% of its consolidated net sales, Grainger operates its business principally through wholly owned subsidiaries in Canada and Mexico, and its majority-owned subsidiary in Japan.
Fluctuations in the price of fuel or increased demand for freight services could affect transportation costs. Grainger’s ability to pass on such increases in costs in a timely manner depends on market conditions. The inability to pass along cost increases could result in lower gross margins.
Fluctuations in the price of fuel or increased demand for freight services could affect transportation costs. Grainger’s ability to pass on such increases in costs in a timely manner, or at all, depends on market conditions. The inability to pass along cost increases could result in lower gross margins and lower net earnings.
Changes in customer base or product mix could cause changes in Grainger’s revenue or gross margin, or affect Grainger’s competitive position. From time to time, Grainger experiences changes in its customer base and product mix that affect gross margin.
Changes in customer base or product mix could cause changes in Grainger’s revenue or gross margin, or affect Grainger’s competitive position. Grainger experiences changes in its customer base and product mix that affect gross margin.
In order to compete, Grainger must attract, train, motivate, develop and retain key team members, and the failure to do so could have an adverse effect on results of operations.
In order to compete, Grainger must attract, train, motivate, develop and retain executive leaders and key team members, and the failure to do so could have an adverse effect on results of operations and financial condition.
Even when Grainger is able to find alternate sources for certain products, they may cost more or require Grainger to incur higher transportation costs, which could adversely impact Grainger's profitability and financial condition. For example, disruptions to global transportation networks, such as rising sea levels impacting ports or extreme weather damaging logistics hubs, could increase delays and costs.
Even when Grainger is able to find alternate sources for certain products, they may cost more or require Grainger to incur higher transportation costs, which could adversely impact Grainger's profitability and financial condition. For example, disruptions to global transportation networks, such as labor strikes or extreme weather damaging logistics hubs, could increase delays and costs.
Some of Grainger’s products contain significant amounts of commodity-priced materials, such as steel, copper, petroleum derivatives, rare earth minerals, or other materials or inputs required to manufacture certain products and are subject to price changes based on fluctuations in the commodities market.
Volatility in commodity prices may adversely affect gross margins. Some of Grainger’s products contain significant amounts of commodity-priced materials, such as steel, copper, petroleum derivatives, rare earth minerals, or other materials or inputs required to manufacture certain products and are subject to price changes based on fluctuations in the commodities market.
Grainger’s ability to achieve any environmental or social change is subject to numerous risks, some of which are outside of its control. For example, evolving climate-related regulations in multiple jurisdictions—such as stricter emissions limits, carbon disclosure mandates, and supply chain sustainability requirements—may require Grainger to adjust its operations and increase compliance investments.
Grainger’s ability to achieve the objectives of the Grainger Impact Program is subject to numerous risks, some of which are outside of its control. For example, evolving climate-related regulations in multiple jurisdictions—such as stricter emissions limits, carbon disclosure mandates, and supply chain sustainability requirements—may require Grainger to adjust its operations and increase compliance investments.
There can be no assurance that any future incidents will not be material to Grainger's business, operations or financial condition. Techniques used to obtain unauthorized access or to sabotage systems change frequently and may not be recognized until they are launched against a target. Grainger may be unable to anticipate these techniques or implement preventative measures.
There can be no assurance that any future incidents will not be material to Grainger's business, operations or financial condition. 19 Techniques used to obtain unauthorized access or to sabotage systems change frequently and may not be recognized until they are launched against a target.
Although Grainger generally relies on third parties to facilitate eCommerce payments and payment processing services, Grainger may become subject to additional compliance requirements and regulations regarding these transactions and may also suffer losses from online fraudulent transactions on its eCommerce channels.
Although Grainger generally relies on third parties to facilitate eCommerce payments and payment processing services, Grainger may become subject to additional compliance requirements and regulations regarding these transactions and may also suffer losses from online fraudulent transactions on its eCommerce channels, including theft, credit card fraud and other fraudulent behavior.
Furthermore, our customers may adopt procurement policies that include environmental or social provisions or requirements that their suppliers should comply with, or they may seek to include such provisions or requirements in their procurement terms and conditions. Standards for tracking and reporting Grainger's activity, if any, related to environmental and social matters continue to evolve.
Furthermore, our customers may adopt procurement policies that include varying requirements that their suppliers should comply with, or they may seek to include such provisions or requirements in their procurement terms and conditions. Standards for tracking and reporting Grainger's activity, if any, related to the Grainger Impact Program continue to evolve.
Grainger does not control its suppliers and their sub-suppliers, and neither Grainger nor its suppliers or other partners may be able to uncover all instances of noncompliance with Grainger’s Supplier Code of Ethics and ethical and lawful business practices.
Grainger's Supplier Code of Ethics also addresses how to report potential Supplier Code of Ethics violations and related concerns. Grainger does not control its suppliers and their sub-suppliers, and neither Grainger nor its suppliers or other partners may be able to uncover all instances of noncompliance with Grainger’s Supplier Code of Ethics and ethical and lawful business practices.
In addition, Grainger must pay certain transaction fees relating to these transactions, which may increase over time and could have an impact on product margin, operating costs and profitability.
In addition, Grainger must pay certain transaction fees relating to these transactions, which may increase over time and could adversely impact product margins, operating costs and profitability.
These factors, many of which are outside of Grainger’s control, could cause stock price and trading volume volatility or Grainger’s stock price to decline. Volatility in the price of Grainger's securities could result in the filing of securities class action litigation, which could result in substantial costs and the diversion of management time and resources.
These factors, many of which are outside of Grainger’s control, could cause volatility in securities prices and trading volume, including Grainger’s stock price, to decline. Volatility in the price of Grainger's securities could result in the filing of securities litigation or government investigations, which could result in substantial costs and the diversion of management's time and resources.
Grainger’s Supplier Code of Ethics focuses on four main areas of ethical sourcing: (i) human rights and labor standards (including prohibitions on child and forced labor); (ii) environment, health and safety; (iii) sanctions, trade, bribery and corruption; and (iv) privacy and information security. The Code also addresses how to report potential Code violations and related concerns.
Grainger’s Supplier Code of Ethics focuses on four main areas of ethical sourcing: (i) human rights and labor standards (including prohibitions on child and forced labor); (ii) environment, health and safety; (iii) sanctions, trade, bribery and corruption; and (iv) privacy and information security.
Even an isolated incident, or the aggregate effect of individually insignificant incidents, can erode trust and confidence, particularly if they result in adverse publicity, governmental investigations, product recalls, or litigation, and as a result, could tarnish Grainger’s brand and lead to adverse effects on Grainger’s business. Volatility in commodity prices may adversely affect gross margins.
Even an isolated incident, or the aggregate effect of individually insignificant incidents, can erode trust and confidence, particularly if they result in adverse publicity, governmental attention or investigations, product recalls, or litigation, and as a result, could tarnish Grainger’s brand and lead to adverse effects on Grainger’s business and results of its operations.
Grainger's IT infrastructure also includes products and services provided by suppliers, vendors and other third-party business partners, and these third parties can experience cybersecurity threats, breaches, attacks, disruptions, and cybersecurity incidents that impact the security of systems and proprietary or confidential information.
Grainger's IT infrastructure also includes products and services provided by suppliers, vendors and other third-party business partners, and these third parties may experience cybersecurity threats, breaches, attacks, disruptions, and other incidents that could affect confidentiality, integrity or availability of systems and proprietary or confidential information.
These programs could be challenging to implement and costly to maintain, and Grainger’s actual or perceived failure to achieve its goals or uphold its commitments could adversely affect its reputation, business, and financial performance. To be successful in the future, Grainger must continue to preserve, grow and leverage the value of Grainger’s brand.
These programs can be challenging to implement and costly to maintain, and Grainger’s actual or perceived failure to achieve its goals or uphold its commitments could adversely affect its reputation, business, and financial performance. Grainger must continue to preserve, grow and leverage the value of its brand. Reputational value is based in large part on perceptions of subjective qualities.
In addition, any insurance or indemnification rights, including against the manufacturer of such products, may be insufficient or unavailable to protect Grainger against potential loss exposures. Grainger’s common stock may be subject to volatility or price declines.
The inclusion of Grainger-branded products in the product assortment could subject Grainger to increased claims and litigation activity. In addition, any insurance or indemnification rights related to Grainger-branded products, including against the manufacturer of such products, may be insufficient or unavailable to protect Grainger against potential loss exposures. Grainger’s common stock may be subject to volatility or price declines.
Further, if these investments in Grainger’s eCommerce platforms are less successful at attracting and retaining customers than similar investments by our competitors, or if Grainger is otherwise unsuccessful at realizing the benefits of these technological investments generally, its reputation, financial condition and operating results may be adversely affected.
Further, if these investments in Grainger’s eCommerce platforms are less successful at attracting and retaining customers than similar investments by our competitors, or if Grainger is otherwise unsuccessful at realizing the benefits of these technological investments generally, its reputation, financial condition and operating results may be adversely affected. 15 In addition, the successful operation of Grainger’s eCommerce channels depends in part upon third parties and factors over which Grainger has limited or no control.
Further, failure to successfully hire executives and key team members or adequately plan for the succession, transition, and assimilation of executive leaders and team members in key roles, or to plan for the loss of executives and key team members, could adversely affect Grainger's business results and financial condition. 16 Grainger’s continued success is substantially dependent on positive perceptions of Grainger’s reputation.
Further, failure to successfully hire executives and key team members or adequately plan for the succession, transition, and assimilation of executive leaders and team members in key roles, or to plan for the loss of executives and key team members, could adversely affect Grainger's results of operations and financial condition.
Moreover, Grainger, and its third-party business partners, may face cybersecurity threats and cybersecurity incidents which can include unauthorized access to information systems, business email compromise, viruses, malicious code, ransomware, denial-of-service attacks, and organized cyber-attacks.
Grainger, or its third-party business partners, may face cybersecurity threats and incidents which could include unauthorized access to information systems, business email compromise, misconfiguration of assets, exploitation of vulnerabilities, malware (including viruses and other malicious code), ransomware, denial-of-service attacks and other targeted or organized cyber-attacks.
The foreign currency exchange rate is driven by a variety of macroeconomic factors and fiscal decisions of various governments and central banks, all over which Grainger has no control.
The foreign currency exchange rate is driven by a variety of macroeconomic factors and fiscal decisions of various governments and central banks, all over which Grainger has no control. Grainger also has foreign currency exposure to the extent receipts and expenditures are not denominated in a subsidiary’s functional currency.
If Grainger enables or offers AI products or solutions or implement AI capabilities in its internal operations that are controversial because of their impact on human rights, the environment, privacy, employment, or other social, economic, or political issues, Grainger may experience brand or reputational harm or greater team member attrition. 18 Cybersecurity threats and incidents, including breaches of information systems security could damage Grainger’s reputation, disrupt operations, increase costs and/or decrease revenues.
If Grainger enables or offers AI products or solutions or implement AI capabilities in its internal operations that are controversial because of their impact on human rights, the environment, privacy, employment, or other social, economic, or political issues, Grainger may experience brand or reputational harm or greater team member attrition.
Moreover, Grainger’s operations routinely involve receiving, storing, processing and transmitting sensitive information pertaining to its business, customers, suppliers and team members, and other sensitive matters. Cybersecurity threats are rapidly evolving and some of the means for obtaining access to information in digital and other storage media are becoming increasingly sophisticated.
Grainger’s operations routinely involve receiving, storing, processing and transmitting sensitive information pertaining to its business, customers, suppliers and team members, and other sensitive matters. Cybersecurity threats are rapidly evolving and the means for obtaining unauthorized access to information systems and data are becoming increasingly sophisticated, including through the use of artificial intelligence to enhance social engineering and other techniques.
Although Grainger performs risk assessments on third parties where Grainger deems appropriate to learn about their security program, there is a risk that the confidentiality of data held or accessed by them may be compromised or their systems may be disrupted or interrupted by threat actors.
Although Grainger performs risk assessments on third parties where Grainger deems it appropriate to evaluate their security programs, such assessments may not identify all risks, and the confidentiality of data held or accessed by them may be compromised or their systems may be disrupted or interrupted by threat actors.
If Grainger’s environmental and social practices do not meet evolving government, investor or other stakeholder expectations and standards, then Grainger’s reputation or its attractiveness as an investment, business partner, product or service provider or employer could be negatively impacted, and Grainger could be subject to litigation or regulatory proceedings.
If Grainger’s practices do not meet evolving government, investor or other stakeholder expectations and standards, then Grainger’s reputation or its attractiveness as an investment, business partner, product or service provider or employer could be negatively impacted, and Grainger could be subject to litigation or regulatory proceedings. 17 Technology Risks Interruptions in the proper functioning of information systems could disrupt operations and cause unanticipated increases in costs and/or decreases in revenues.
New environmental laws, regulations, and enforcement could strain Grainger's suppliers and result in increased compliance-related costs, which could result in higher product costs that are passed to Grainger. For instance, California's new climate disclosure requirements and SEC-mandated climate risk reporting could increase compliance burdens and legal exposure.
New environmental laws, regulations, and enforcement could strain Grainger's suppliers and result in increased compliance-related costs, which could result in higher product costs that are passed to Grainger.
Each year, cybersecurity threat actors make numerous attempts to access the information stored in Grainger's information systems or Grainger's third-party business partners.
Threat actors may attempt to access the information stored in Grainger's information systems or the information systems of Grainger's third-party business partners.
Further, cybersecurity threats or cybersecurity incidents that impact Grainger’s systems, or those of its third-party business partners, could have a material adverse effect on Grainger, including its business strategy, financial condition and results of operations, including major disruptions to business operations, alteration or corruption of data or systems, costs related to remediation or the payment of ransom, and litigation including individual claims or consumer class actions, commercial litigation, administrative, and civil or criminal investigations or actions, regulatory intervention and sanctions or fines, investigation and remediation costs and possible prolonged negative publicity.
Such incidents could result in major disruptions to business operations, alteration or corruption of data or systems, costs related to remediation or the payment of ransom, and litigation including individual claims or consumer class actions, commercial litigation, administrative, and civil or criminal investigations or actions, regulatory intervention and sanctions or fines, investigation and remediation costs and possible prolonged negative publicity.
Changes in these laws, regulations and standards, or in their interpretation, could increase the cost of doing business, including, among other factors, as a result of increased investments in technology and the development of new operational processes.
Changes in these laws, regulations and standards, or in how they are interpreted, as well as an inability to effectively engage with the officials or regulators responsible for them, could increase the cost of doing business, including, among other factors, as a result of increased investments in technology and the development of new operational processes.
Technology Risks Interruptions in the proper functioning of information systems could disrupt operations and cause unanticipated increases in costs and/or decreases in revenues. 17 The functioning of Grainger’s information systems is critical to the operation of its business. Grainger continues to invest in software, hardware and network infrastructures to effectively manage its information systems.
The functioning of Grainger’s information systems is critical to the operation of its business. Grainger continues to invest in software, hardware and network infrastructures to effectively manage its information systems.
These efforts include maintaining high standards of product quality and safety, ethical business practices, strong customer relationships, operational reliability, and a commitment to providing a positive workplace environment.
Grainger devotes time and resources to initiatives that align with its corporate values and are designed to strengthen its business and protect and preserve its reputation. These efforts include maintaining high standards of product quality and safety, ethical business practices, strong customer relationships, operational reliability, and a commitment to providing a positive workplace environment.
Cybersecurity incidents can also include team member failures, fraud, phishing or other social engineering attempts or other methods to cause confidential information, payments, account access or access credentials, or other data to be transmitted to an unintended recipient.
Cybersecurity incidents may also include team member failures, fraud, phishing or other social engineering attempts or other methods to cause confidential information, payments, account access or access credentials, or other data to be transmitted to an unintended recipient. Threat actors also may attempt to exploit vulnerabilities in software that is commonly used by companies in cloud-based services and bundled software.
Grainger also has foreign currency exposure to the extent receipts and expenditures are not denominated in a subsidiary’s functional currency and that could have an impact on sales, costs and cash flows. These fluctuations in foreign currency exchange rates have affected and may continue to affect Grainger’s results of operations and impact reported net sales and net earnings.
These fluctuations in foreign currency exchange rates have affected and may continue to affect Grainger’s results of operations and impact reported net sales, costs, cash flows and net earnings.
If Grainger does not manage changing workforce dynamics effectively, it could materially adversely affect Grainger's culture, reputation, and operational flexibility. Additionally, collective bargaining or unionization of team members could decrease Grainger's operational flexibility and lead to work stoppages or slowdowns.
If Grainger does not manage changing workforce dynamics effectively, it could materially adversely affect Grainger's culture, reputation, and operational flexibility.
Further, security measures and efforts may not be effective in each instance and may be subject to human error or failures. Any breach of Grainger’s security measures or any breach, error or 19 malfeasance by its third-party business partners could cause Grainger to incur significant costs to protect any customers, suppliers, team members and other parties whose information is compromised.
Any breach of Grainger’s security measures or any breach, error or malfeasance by its third-party business partners could cause Grainger to incur significant costs to respond to and remediate such incidents, including implementing additional safeguards and addressing impacts to customers, suppliers, team members and other parties whose information is compromised.
In addition, Grainger may in the future seek to raise additional financing for working capital, capital expenditures, refinancing of indebtedness, share repurchases, dividends, corporate investments, mergers and acquisitions, joint ventures, or other general corporate purposes.
Any such acceleration could have a material adverse effect on Grainger’s business, financial condition, results of operations, cash flows, and its ability to obtain financing on favorable terms in the future. 21 In addition, Grainger may in the future seek to raise additional financing for working capital, capital expenditures, refinancing of indebtedness, share repurchases, dividends, corporate investments, mergers and acquisitions, joint ventures, or other general corporate purposes.
One of the reasons customers choose to do business with Grainger and team members choose Grainger as a place of employment is the reputation that Grainger has built over many years. Grainger devotes time and resources to initiatives that align with its corporate values and are designed to strengthen its business and protect and preserve its reputation.
Grainger’s continued success is substantially dependent on positive perceptions of Grainger’s reputation. One of the reasons customers choose to do business with Grainger and team members choose Grainger as a place of employment is the reputation that Grainger has built over many years.
Changes in customer base and product mix result primarily from business acquisitions and divestitures, changes in customer demand, customer acquisitions, selling and marketing activities, competition and the increased use of eCommerce by Grainger and its competitors. 14 In addition, Grainger has entered, and may in the future continue to enter, into contracts with group purchasing organizations (GPOs) that aggregate the buying power of their member customers in negotiating selling prices.
Changes in customer base and product mix result primarily from business acquisitions and divestitures, changes in customer demand, 14 customer acquisitions, selling and marketing activities, competition and the increased use of eCommerce by Grainger and its competitors.
The inability to introduce new products and services and effectively integrate them into Grainger’s existing assortment could have a negative impact on future sales growth and Grainger’s competitive position. The inclusion of Grainger-branded products in the product assortment could subject Grainger to increased claims and litigation activity.
As its customer base and product mix change over time, Grainger must identify new products, product lines and services that respond to industry trends and customer needs. The inability to introduce new products and services and effectively integrate them into Grainger’s existing assortment could have a negative impact on future sales growth and Grainger’s competitive position.
Unexpected product shortages, tariffs, product cost increases and risks associated with Grainger’s suppliers could negatively impact customer relationships or result in an adverse impact on results of operations. Grainger's products are purchased from more than 5,000 primary suppliers located in various countries around the world, not one of which accounted for more than 5% of total purchases.
Unexpected product shortages, product cost increases and risks in trade and tariff policies associated with Grainger’s suppliers could negatively impact customer relationships or result in an adverse impact on results of operations.
Grainger has experienced certain cybersecurity incidents, and in each instance, Grainger provided notifications where required by applicable law and adopted remedial measures. None of these incidents have been deemed to be material to Grainger and Grainger has neither incurred any material net expenses nor been materially penalized or subject to any material settlement amounts with respect to such incidents.
Grainger has not had an information security or cybersecurity incident deemed to be material to Grainger and Grainger has neither incurred any material net expenses nor been materially penalized or subject to any material settlement amounts with respect to such incident.
Grainger’s disclosures related to environmental and social matters expose it to risks that could adversely affect its reputation and performance. Grainger has established and publicly announced environmental and social programs, including its efforts to address climate change, human rights, and an inclusive workplace.
Grainger’s disclosures related to corporate responsibility expose it to risks that could adversely affect its reputation and performance. Grainger has established and publicly announced its Grainger Impact Program, including its efforts to eliminate waste, reduce its carbon footprint, improve workplace safety and foster a welcoming workplace.
If Grainger is unable to enter into, or sustain, contractual arrangements on a satisfactory commercial basis with GPOs, Grainger's results of operations could be adversely affected. As its customer base and product mix change over time, Grainger must identify new products, product lines and services that respond to industry trends and customer needs.
In addition, Grainger has entered, and may in the future continue to enter, into contracts with group purchasing organizations (GPOs) that aggregate the buying power of their member customers in negotiating selling prices. If Grainger is unable to enter into, or sustain, contractual arrangements on a satisfactory commercial basis with GPOs, Grainger's results of operations could be adversely affected.
Any such acceleration could have a material adverse effect on Grainger’s business, financial condition, results of operations, cash flows, and its ability to obtain financing on favorable terms in the future.
Cybersecurity threats or cybersecurity incidents that impact Grainger’s systems, or those of its third-party business partners, could have a material adverse effect on Grainger, including its business strategy, financial condition and results of operations.
Removed
Disruptions in procuring sources of supply could occur due to factors beyond Grainger’s control.
Added
Grainger's products are purchased from more than 5,000 primary suppliers located in various countries around the world, not one of which accounted for more than 5% of total purchases in the year ended December 31, 2025. Disruptions in procuring sources of supply could occur due to factors beyond Grainger’s control.

… 7 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+1 added−1 removed6 unchanged
Item 1C: Cybersecurity Risk Management and Strategy Grainger has a dedicated cybersecurity team that works to prevent, detect, and respond to cybersecurity threats. The cybersecurity team is led by the Vice President and Chief Information Security Officer (CISO), who is responsible for assessing and managing material risks from cybersecurity threats.
Item 1C: Cybersecurity Risk Management and Strategy Grainger has a dedicated cybersecurity team that works to prevent, detect, and respond to cybersecurity threats. The cybersecurity team is led by the Vice President and Chief Information Security Officer (CISO), who is responsible for assessing and managing risks from cybersecurity threats, including processes designed to identify and manage material risks.
The team also works to assess and manage cybersecurity risks by: (i) reviewing risks from cybersecurity threats with senior management; (ii) incorporating cybersecurity in its enterprise risk processes; (iii) establishing regular reviews of cybersecurity risks and mitigation efforts, including with the Audit Committee and the Board; and (iv) using third parties as needed for reviews and testing.
The team also works to assess and manage cybersecurity risks by: (i) reviewing risks from cybersecurity threats with senior management; (ii) incorporating cybersecurity in its enterprise risk processes; (iii) establishing regular reviews of cybersecurity risks and mitigation efforts, including with the Audit Committee and the Board; and (iv) performing pre-emptive measures to assess system vulnerabilities, including using third parties as needed for reviews and testing.
Grainger has developed a cybersecurity risk intake process to facilitate the identification of cybersecurity risks, including those related to third-party vendors. Identified risks are tracked by management, and incorporated into mitigation plans.
Grainger has developed a cybersecurity risk intake process to facilitate the identification of cybersecurity risks, including those related to third-party vendors. Identified risks are tracked by management and incorporated into mitigation plans based on assessed priority and potential impact.
Removed
Grainger has been subject to unauthorized access of systems on which certain supplier, customer, and team member information was stored, which have been deemed immaterial to our business and operations individually and in the aggregate.
Added
Grainger maintains processes designed to evaluate the severity and potential business impact of cybersecurity events, including whether such events may be material. Significant cybersecurity matters are communicated to appropriate members of senior management and as warranted, to the Audit Committee and the Board in connection with their oversight of cybersecurity risk.

Item 2. Properties

Properties — owned and leased real estate

6 edited+0 added−1 removed2 unchanged
(8) The Company owns its corporate headquarters in Lake Forest, Illinois and leases other general offices in the Chicago Metropolitan area that consists of approximately one million square feet. Grainger believes that its properties are generally in excellent condition, well maintained and suitable for the conduct of business.
The Company owns its corporate headquarters in Lake Forest, Illinois and leases other general offices in the Chicago Metropolitan area that consists of approximately one million square feet. Grainger believes that its properties are generally in excellent condition, well maintained and suitable for the conduct of business.
(1) Consists of 21 DCs that range in size from approximately 60,000 to 1.5 million square feet, including six leased facilities that primarily manage bulk products. The remaining DCs are primarily owned. (2) Consists of 245 branches, 65 onsite and four will-call express locations. These facilities range in size from under 1,000 to 110,000 square feet.
(1) Consists of 21 DCs that range in size from approximately 60,000 to 1.5 million square feet, including six leased facilities that primarily manage bulk products. The remaining DCs are primarily owned. (2) Consists of 245 branches, 75 onsite and four will-call express locations. These facilities range in size from under 1,000 to 110,000 square feet.
The following table includes Grainger's material facilities: Location Facility and Use (9) Size in Square Feet (in thousands) Segment U.S. (1) DCs 11,642 High-Touch Solutions N.A. U.S. (2) Branch locations 6,327 High-Touch Solutions N.A. Japan (3) DCs 3,380 Endless Assortment U.S. (4) Other facilities 3,847 High-Touch Solutions N.A.
The following table includes Grainger's material facilities: Location Facility and Use (8) Size in Square Feet (in thousands) Segment U.S. (1) DCs 11,642 High-Touch Solutions N.A. U.S. (2) Branch locations 6,483 High-Touch Solutions N.A. Japan (3) DCs 3,380 Endless Assortment U.S. (4) Other facilities 2,908 High-Touch Solutions N.A.
(4) Primarily consists of storage facilities, office space and customer service centers. These facilities are owned and leased. These facilities range in size from under 1,000 to over 1 million square feet. (5) In Canada, Grainge r ha s 32 branch locations, five DCs and other facilities which total two million square feet.
(4) Primarily consists of storage facilities, office space and customer service centers. These facilities are owned and leased. These facilities range in size from under 1,000 to over 1 million square feet. (5) In Canada, Grainger has 32 branch locations, five DCs and other facilities which total two million square feet.
Item 2: Properties As of December 31, 2024, Grainger’s owned and leased facilities totaled approximately 30.3 million square feet. Grainger owns and leases facilities primarily in the U.S., Japan, Canada (5) , Mexico (6) , Puerto Rico (7) and the U.K.
Item 2: Properties As of December 31, 2025, Grainger’s owned and leased facilities totaled approximately 28.7 million square feet. Grainger owns and leases facilities primarily in the U.S., Japan, Canada (5) , Mexico (6) and Puerto Rico (7) .
(6) In Mexico, Grainger has 15 branch locations, two DCs and one other location which total 650,000 square feet. (7) In Puerto Rico, Grainger has three branch locations and one DC which total 95,000 square feet. (8) In the U.K., Grainger has 33 branch and other facility locations and one DC which total 685,000 square feet.
(6) In Mexico, Grainger has 15 branch locations, two DCs and one other location which total 650,000 square feet. (7) In Puerto Rico, Grainger has three branch locations and one DC which total 95,000 square feet. (8) Owned facilities are not subject to any mortgages.
Removed
(9) Owned facilities are not subject to any mortgages.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Item 3: Legal Proceedings For a description of legal proceedings, see the disclosure contained in Note 13 to the Consolidated Financial Statements included in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K, which is incorporated herein by reference.
Item 3: Legal Proceedings For a description of legal proceedings, see the disclosure contained in Note 14 to the Consolidated Financial Statements included in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K, which is incorporated herein by reference.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+0 added−0 removed3 unchanged
It covers the period commencing December 31, 2019 and ending December 31, 2024. The graph assumes that the value for the investment in Grainger common stock and in each index was $100 on December 31, 2019, and that all dividends were reinvested. December 31, 2019 2020 2021 2022 2023 2024 W.W.
It covers the period commencing December 31, 2020 and ending December 31, 2025. The graph assumes that the value for the investment in Grainger common stock and in each index was $100 on December 31, 2020, and that all dividends were reinvested. December 31, 2020 2021 2022 2023 2024 2025 W.W.
Dividends Grainger expects that its practice of paying quarterly dividends on its common stock will continue, although the payment of future dividends is at the discretion of Grainger’s Board of Directors and will depend upon Grainger’s earnings, capital requirements, financial condition and other factors. Holders As of February 14, 2025, there were 496 shareholders of record of Grainger’s common stock.
Dividends Grainger expects that its practice of paying quarterly dividends on its common stock will continue, although the payment of future dividends is at the discretion of Grainger’s Board of Directors and will depend upon Grainger’s earnings, capital requirements, financial condition and other factors. Holders As of February 12, 2026, there were 489 shareholders of record of Grainger’s common stock.
On April 24, 2024, Grainger's Board of Directors authorized a program for the Company to repurchase an aggregate amount of up to five million shares in the open market, through privately negotiated transactions and block transactions, pursuant to a trading plan or otherwise (2024 Program) with no expiration date.
The 2024 Program authorized the Company to repurchase an aggregate amount of up to five million shares in the open market, through privately negotiated transactions and block transactions, pursuant to a trading plan or otherwise with no expiration date.
(B) Average price paid per share excludes commissions of $0.02 per share paid. (C) Prior to April 28, 2024, purchases were made pursuant to a share repurchase program approved by Grainger's Board of Directors and announced on April 28, 2021 (2021 Program).
(2) Average price paid per share excludes commissions of $0.02 per share paid. (3) Purchases were made pursuant to a share repurchase program approved by Grainger's Board of Directors and announced on April 24, 2024 (2024 Program).
In authorizing the 2024 Program, the Board of Directors terminated the 2021 Program. (D) The difference of 206 shares between the Total Number of Shares Purchased and the Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs represents shares purchased by the administrator and record keeper of the W.W. Grainger, Inc.
(4) The difference of 302 shares between the Total Number of Shares Purchased and the Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs represents shares purchased by the administrator and record keeper of the W.W. Grainger, Inc.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information relating to Grainger's repurchase of common stock during the three months ended December 31, 2024: Period Total Number of Shares Purchased (A) (D) Average Price Paid Per Share (B) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (C) Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs Oct. 1 – Oct. 31 11,339 $1,023.97 11,332 4,570,888 shares Nov. 1 – Nov. 30 148,340 $1,190.32 148,340 4,422,548 shares Dec. 1 – Dec. 31 241,646 $1,132.63 241,447 4,181,101 shares Total 401,325 401,119 (A) There were no shares withheld to satisfy tax withholding obligations.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information relating to Grainger's repurchase of common stock during the three months ended December 31, 2025: Period Total Number of Shares Purchased (1) (4) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs Oct. 1 – Oct. 31 100,717 $961.43 100,717 3,293,362 shares Nov. 1 – Nov. 30 72,129 $943.56 72,110 3,221,252 shares Dec. 1 – Dec. 31 78,943 $1,004.21 78,660 3,142,592 shares Total 251,789 251,487 (1) There were no shares withheld to satisfy tax withholding obligations.
Grainger, Inc. $ 100 $ 123 $ 158 $ 172 $ 259 $ 332 Dow Jones US Industrial Suppliers Total Stock Market Index 100 125 170 151 223 260 S&P 500 Stock Index 100 118 152 125 158 197
Grainger, Inc. $ 100 $ 129 $ 140 $ 211 $ 270 $ 261 Dow Jones US Industrial Suppliers Total Stock Market Index 100 137 121 179 208 231 S&P 500 Stock Index 100 129 105 133 166 196

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

58 edited+15 added−11 removed19 unchanged
Restructuring Actions In the second quarter of 2024, the Company recorded restructuring charges in SG&A of $15 million in the High-Touch Solutions N.A. segment and $1 million in Grainger's Other businesses. The charges consisted primarily of team member severance and benefit costs.
Restructuring Actions In the second quarter of 2024, the Company recorded restructuring charges in SG&A expenses of $15 million in the High-Touch Solutions N.A. segment and $1 million in Grainger's Other businesses. The charges consisted primarily of team member severance and benefit costs.
For further information on the Company's goodwill, see Note 4 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. Contingencies and Legal Matters The Company is subject to various claims and legal proceedings that arise in the ordinary course of business, the outcomes of which are inherently uncertain.
For further information on the Company's goodwill, see Note 5 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. Contingencies and Legal Matters The Company is subject to various claims and legal proceedings that arise in the ordinary course of business, the outcomes of which are inherently uncertain.
Strategic Priorities The Company’s continued strategic aspiration for 2025 is to relentlessly expand Grainger’s leadership position by being the go-to partner for people who build and run safe, sustainable, and productive operations. To achieve this, each Grainger business has a set of strategic growth drivers to drive top-line revenue and MRO market outgrowth.
Strategic Priorities The Company’s continued strategic aspiration for 2026 is to relentlessly expand Grainger’s leadership position by being the go-to partner for people who build and run safe, sustainable, and productive operations. To achieve this, each Grainger business has a set of strategic growth drivers to drive top-line revenue and MRO market outgrowth.
The following table provides a reconciliation of reported net sales growth from the prior year period in accordance with GAAP to the Company's non-GAAP measures daily net sales and daily, organic constant currency net sales for the twelve months end ed December 31, 2024 (in millions of dollars): For the Years Ended December 31, High-Touch Solutions N.A.
The following table provides a reconciliation of reported net sales growth from the prior year period in accordance with GAAP to the Company's non-GAAP measures daily net sales and daily, organic constant currency net sales for the twelve months end ed December 31, 2025 (in millions of dollars): For the Years Ended December 31, High-Touch Solutions N.A.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 are not included in this Form 10-K, and can be found in MD&A of Financial Condition and Results of Operations in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included in this Form 10-K, and can be found in MD&A of Financial Condition and Results of Operations in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
For further information regarding the Company's non-GAAP measures including reconciliations to the most directly comparable GAAP measures, see "Non-GAAP Measures ." For further segment information, see Note 12 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. High-Touch Solutions N.A.
For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measures, see "Non-GAAP Measures ." For further segment information, see Note 13 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. High-Touch Solutions N.A.
The Company adjusts its reported net sales when there are differences in the number of U.S. selling days relative to the prior year period and also excludes the impact on reported net sales due to changes in foreign currency exchange rate fluctuations and results of certain divested businesses.
The Company adjusts its reported net sales when there are differences in the number of U.S. selling days relative to the prior year period and also excludes the impact on reported net sales due to changes in foreign currency exchange rate fluctuations and results of certain divested or closed businesses.
The following discussion should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023 .
The following discussion should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024 .
Both credit rating agencies currently rate the Company's corporate credit at investment grade. 33 The following table summarizes the Company's credit ratings as of December 31, 2024: Corporate Senior Unsecured Short-term Moody's A2 A2 P1 S&P A+ A+ A1 Uses of Liquidity Internally generated cash flows are the primary source of Grainger's working capital and growth initiatives, including capital expenditures.
Both credit rating agencies currently rate the Company's corporate credit at investment grade. 34 The following table summarizes the Company's credit ratings as of December 31, 2025: Corporate Senior Unsecured Short-term Moody's A2 A2 P1 S&P A+ A+ A1 Uses of Liquidity Internally generated cash flows are the primary source of Grainger's working capital and growth initiatives, including capital expenditures.
Dividends For the years ended December 31, 2024 and 2023, Grainger declared and paid $421 million and $392 m illion, respectively, in dividends to holders of the Company's common stock. Commitments and Other Contractual Obligations The Company's material cash requirements include the following commitments and other contractual obligations.
Dividends For the years ended December 31, 2025 and 2024, Grainger declared and paid $467 million and $421 m illion, respectively, in dividends to holders of the Company's common stock. Commitments and Other Contractual Obligations The Company's material cash requirements include the following commitments and other contractual obligations.
For further discussion of the Company's risks and uncertainties, see Part I, Item 1A: Risk Factors of this Form 10-K. 27 Results of Operations In this section, Grainger utilizes non-GAAP (as defined below) measures where it believes it will assist users of its financial statements in understanding its business.
For further discussion of the Company's risks and uncertainties, see Part I, Item 1A: Risk Factors of this Form 10-K. 28 Results of Operations In this section, Grainger utilizes non-GAAP measures where it believes it will assist users of its financial statements in understanding its business.
Capital project spending for 2025 is expected to be in the range of $450 and $550 million. This includes continued supply chain capacity expansion and technology enhancements across the Company. Share Repurchases For the years ended December 31, 2024 and 2023, Grainger repurchased shares of its common stock in the open market for $1,201 million and $850 million, respectively.
Capital project spending for 2026 is expected to be in the range of $550 and $650 million. This includes continued supply chain capacity expansion and technology enhancements across the Company. Share Repurchases For the years ended December 31, 2025 and 2024, Grainger repurchased shares of its common stock in the open market for $1,045 million and $1,201 million, respectively.
For further information regarding the Company's debt instruments and available financing sources, see Note 5 of the Notes to the Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. Total debt as a percent of total capitalization was 42.9% and 40.1%, as of December 31, 2024 and 2023, respectively.
For further information regarding the Company's debt instruments and available financing sources, see Note 6 of the Notes to the Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. Total debt as a percent of total capitalization was 37.5% and 42.9%, as of December 31, 2025 and 2024, respectively.
Share repurchases are executed at prices the Company determines appropriate subject to various factors, including market conditions and the Company's financial performance and may be affected through accelerated share repurchase programs, open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans. Share repurchases for 2025 are expected to be in the range of $1,150 and $1,250 million.
Share repurchases are executed at prices the Company determines appropriate subject to various factors, including market conditions and the Company's financial performance and may be affected through accelerated share repurchase programs, open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans. Share repurchases for 2026 are expected to be in the range of $950 and $1,050 million.
For further information on the Company's contingencies and legal matters, see Note 13 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. 35
For further information on the Company's contingencies and legal matters, see Note 14 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. 36
As of December 31, 2024, the Company had fixed operating lease payment obligations of $437 million, with $91 million payable within 1 2 months. 34 Critical Accounting Estimates The preparation of Grainger’s Consolidated Financial Statements and accompanying notes are in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make assumptions and estimates that affect the reported amounts.
As of December 31, 2025, the Company had fixed operating lease payment obligations of $412 million, with $86 million payable within 1 2 months. 35 Critical Accounting Estimates The preparation of Grainger’s Consolidated Financial Statements and accompanying notes are in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make assumptions and estimates that affect the reported amounts.
The following table is included as an aid to understanding the changes of Grainger's total net sales, daily net sales and daily organic constant currency net sales from the prior period for the twelve months end ed December 31, 2024 (in millions of dollars ): For the Years Ended December 31, 2024 % Change (1) 2023 % Change (1) Net sales $ 17,168 4.2 % $ 16,478 8.2 % Daily net sales (2) $ 66.5 3.4 % $ 65.2 8.6 % Daily, organic constant currency net sales (2) $ 67.4 4.7 % $ 65.8 9.5 % (1) Calculated on the basis of prior year reported net sales for the years ended December 31, 2024 and 2023.
The following table is included as an aid to understanding the changes of Grainger's total net sales, daily net sales and daily, organic constant currency net sales from the prior period for the twelve months end ed December 31, 2025 (in millions of dollars ): For the Years Ended December 31, 2025 % Change (1) 2024 % Change (1) Net sales $ 17,942 4.5 % $ 17,168 4.2 % Daily net sales (2) $ 70.4 4.9 % $ 66.5 3.4 % Daily, organic constant currency net sales (2) $ 70.4 4.9 % $ 67.4 4.7 % (1) Calculated on the basis of prior year reported net sales for the years ended December 31, 2025 and 2024.
Adjusted diluted earnings per share was $38.96 for the year ended December 31, 2024, an increase of 6% compared to $36.67 for the same period in 2023. Segment Analysis In this section, Grainger utilizes non-GAAP measures where it believes it will assist users of its financial statements in understanding its business.
Adjusted diluted earnings per share was $39.48 for the year ended December 31, 2025, an increase of 1% compared to $38.96 for the same period in 2024. Segment Analysis In this section, Grainger utilizes non-GAAP measures where it believes it will assist users of its financial statements in understanding its business.
Cash Flows The following table shows the Company's cash flow activity for the periods presented (in millions of dollars): For the Years Ended December 31, 2024 2023 Total cash provided by (used in): Operating activities $ 2,111 $ 2,031 Investing activities (520) (422) Financing activities (1,180) (1,278) Effect of exchange rate changes on cash and cash equivalents (35) 4 Increase in cash and cash equivalents $ 376 $ 335 Net cash provided by operating activities was $2,111 million and $2,031 million for the year ended December 31, 2024 and 2023, respectively.
Cash Flows The following table shows the Company's cash flow activity for the periods presented (in millions of dollars): For the Years Ended December 31, 2025 2024 Total cash provided by (used in): Operating activities $ 2,015 $ 2,111 Investing activities (645) (520) Financing activities (1,825) (1,180) Effect of exchange rate changes on cash and cash equivalents 4 (35) (Decrease) increase in cash and cash equivalents $ (451) $ 376 Net cash provided by operating activities was $2,015 million and $2,111 million for the year ended December 31, 2025 and 2024, respectively.
Debt As of December 31, 2024, the Company had outstanding debt obligations with varying maturities for an aggregate principal amount of $2,803 million, with $502 million pa ya ble within 12 months. Total future interest payments associated with the Company's outstanding debt obligations was $1,855 million, with $101 million payable within 12 months.
Debt As of December 31, 2025, the Company had outstanding debt obligations with varying maturities for an aggregate principal amount of $2,509 million, with $126 million pa ya ble within 12 months. Total future interest payments associated with the Company's outstanding debt obligations was $1,763 million, with $101 million payable within 12 months.
Purchase Obligations Grainger had purchase o bligations of approximately $1,687 million as of December 31, 2024, which includes approximately $1,021 million payable within 12 months. Grainge r's purchase obligations primarily include commitments to purchase inventory, uncompleted additions to property, buildings and equipment and other goods and services.
Purchase Obligations Grainger had purchase obligations of approximately $1,991 million as of December 31, 2025, which includes approximately $1,289 million payable within 12 months. Grainge r's purchase obligations primarily include commitments to purchase inventory, uncompleted additions to property, buildings and equipment and other goods and services.
As of December 31, 2024 and 2023, the ratio of current assets to current liabilities was 2.9 and 2.8, respectively. Capital Expenditures In fiscal 2024, the Company's capital expenditures were $541 million and $445 million for the years ended December 31, 2024 and 2023, respectively.
As of December 31, 2025 and 2024, the ratio of current assets to current liabilities was 3.0 and 2.9, respectively. Capital Expenditures In fiscal 2025, the Company's capital expenditures were $684 million and $541 million for the years ended December 31, 2025 and 2024, respectively.
Grainger, Inc. and adjusted diluted earnings per share for the twelve months ended December 31, 2024 and 2023 (in millions of dollars): 31 Twelve Months Ended December 31, 2024 Reported Adjustment (1) Adjusted % Change Reported (2) % Change Adjusted (2) Selling, general and administrative expenses High-Touch Solutions N.A. $ 3,356 $ (15) $ 3,341 Endless Assortment 663 — 663 Other (3) 102 (1) 101 Selling, general and administrative expenses $ 4,121 $ (16) $ 4,105 4.8% 5.1% Earnings High-Touch Solutions N.A. $ 2,385 $ 15 $ 2,400 Endless Assortment 260 — 260 Other (3) (8) 1 (7) Operating earnings $ 2,637 $ 16 $ 2,653 2.8% 2.4% Total other expense – net (53) — (53) Income tax provision (4) (595) (4) (599) Net earnings $ 1,989 $ 12 $ 2,001 Noncontrolling interest (80) — (80) Net earnings attributable to W.W.
Grainger, Inc. $ 1,706 $ 196 $ 1,902 (10.6)% (1.0)% Diluted earnings per share $ 35.40 $ 4.08 $ 39.48 (8.6)% 1.3% Twelve Months Ended December 31, 2024 Reported Adjustment (2) Adjusted % Change Reported (3) % Change Adjusted (3) Selling, general and administrative expenses High-Touch Solutions N.A. $ 3,356 $ (15) $ 3,341 Endless Assortment 663 — 663 Other (4) 102 (1) 101 Selling, general and administrative expenses $ 4,121 $ (16) $ 4,105 4.8% 5.1% Earnings High-Touch Solutions N.A. $ 2,385 $ 15 $ 2,400 Endless Assortment 260 — 260 Other (4) (8) 1 (7) Operating earnings $ 2,637 $ 16 $ 2,653 2.8% 2.4% Total other expense – net (53) — (53) Income tax provision (5) (595) (4) (599) Net earnings $ 1,989 $ 12 $ 2,001 Noncontrolling interest (80) — (80) Net earnings attributable to W.W.
Grainger, Inc. $ 1,909 $ 1,829 4.4 11.1 % 11.1 % Diluted earnings per share: $ 38.71 $ 36.23 6.8 % (1) For further information regarding the Company's disaggregated revenue, see Note 2 of the Notes to the Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K.
Grainger, Inc. $ 1,706 $ 1,909 (10.6) 9.5 % 11.1 % Diluted earnings per share: $ 35.40 $ 38.71 (8.6) % (1) For further information regarding the Company's disaggregated revenue, see Note 3 of the Notes to the Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K.
Note 1 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K describes the significant accounting policies and methods used in the preparation of the Company’s Consolidated Financial Statements.
Note 1 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K describes the significant accounting policies and methods used in the preparation of the Company’s Consolidated Financial Statements. Inventories Company inventories primarily consist of merchandise purchased for resale.
The Company expects to continue to return excess capital to shareholders through share repurchases and dividends. Working Capital Working capital as of December 31, 2024 was $3,282 million, an increase of $204 million compared to $3,078 million as of December 31, 2023. The increase was primarily due to sustained sales growth.
The Company expects to continue to return excess capital to shareholders through share repurchases and dividends. Working Capital Working capital as of December 31, 2025 was $3,515 million, an increase of $233 million compared to $3,282 million as of December 31, 2024. The increase was primarily due to sales growth and inventory inflation.
The following tables provide a reconciliation of reported SG&A expenses, operating earnings, net earnings attributable to W.W. Grainger, Inc. and diluted earnings per share determined in accordance with GAAP to the Company's non-GAAP measures adjusted SG&A, adjusted operating earnings, adjusted net earnings attributable to W.W.
Grainger, Inc. and diluted earnings per share determined in accordance with GAAP to the Company's non-GAAP measures adjusted SG&A, adjusted operating earnings, adjusted net earnings attributable to W.W.
Additionally, all Grainger businesses are focused on continuously enhancing our operational processes to improve service and cost through customer experience, technology and supply chain infrastructure which ultimately delivers long-term returns for shareholders.
Additionally, all Grainger businesses are focused on continuously enhancing our operational processes to improve service and cost through technology, strong supplier relationships, supply chain infrastructure and a continuous improvement mindset, which ultimately delivers long-term returns for shareholders.
For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measure, see below "Non-GAAP Measures." Net sales of $17,168 million for the year ended December 31, 2024 increased $690 million, or 4%, and on a daily, organic constant currency basis, net sales increased 5% compared to the same period in 2023.
For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measure, see below "Non-GAAP Measures." 29 Net sales of $17,942 million for the year ended December 31, 2025 increased $774 million, which represents a 5% increase on a reported and daily, organic constant currency basis compared to the same period in 2024.
The Company does not expect this business exit to have a material effect on its future results of operations.
The Company does not expect these actions to have a material effect on its future results of operations.
There were 256 and 254 sales days in the full year 2024 and 2023, respectively. (4) Excludes the impact on net sales due to year-over-year foreign currency exchange rate fluctuations on a daily basis. (5) Excludes the net sales results of the divested E&R business in the prior year period on a daily basis.
There were 255 and 256 sales days in the full year 2025 and 2024, respectively. (4) Excludes the impact on net sales due to year-over-year foreign currency exchange rate fluctuations on a daily basis. (5) Excludes the net sales results of the divested Cromwell business and closed Zoro U.K. business in the prior year period on a daily basis.
There were 256 and 254 sales days in the full year 2024 and 2023, respectively.
There were 255 and 256 sales days in the full year 2025 and 2024, respectively.
Endless Assortment Total Company (1) 2024 % Change (2) 2024 % Change (2) 2024 % Change (2) Reported net sales $ 13,720 3.4 % $ 3,134 7.5 % $ 17,168 4.2 % Daily impact (3) (0.4) (0.8) (0.1) (0.9) (0.5) (0.8) Daily net sales 53.2 2.6 12.1 6.6 66.5 3.4 Foreign currency exchange (4) 0.1 0.1 0.6 5.0 0.6 0.9 Business divestiture (5) 0.3 0.5 — — 0.3 0.4 Daily, organic constant currency net sales $ 53.6 3.2 % $ 12.7 11.6 % $ 67.4 4.7 % 2023 % Change (2) 2023 % Change (2) 2023 % Change (2) Reported net sales $ 13,267 8.9 % $ 2,916 4.7 % $ 16,478 8.2 % Daily impact (3) 0.2 0.4 — 0.4 0.3 0.4 Daily net sales 52.4 9.3 11.5 5.1 65.2 8.6 Foreign currency exchange (4) — — 0.6 5.3 0.6 0.9 Business divestiture (5) — 0.1 — — — — Daily, organic constant currency net sales $ 52.4 9.4 % $ 12.1 10.4 % 65.8 9.5 % (1) Total Company includes Other.
Endless Assortment Total Company (1) 2025 % Change (2) 2025 % Change (2) 2025 % Change (2) Reported net sales $ 13,993 2.0 % $ 3,625 15.7 % $ 17,942 4.5 % Daily impact (3) 0.2 0.4 0.1 0.5 0.3 0.4 Daily net sales 54.9 2.4 14.2 16.2 70.4 4.9 Foreign currency exchange (4) 0.1 0.2 (0.1) (0.7) — — Business divestiture (5) — — — 0.1 — — Daily, organic constant currency net sales $ 55.0 2.6 % $ 14.1 15.6 % $ 70.4 4.9 % 2024 % Change (2) 2024 % Change (2) 2024 % Change (2) Reported net sales $ 13,720 3.4 % $ 3,134 7.5 % $ 17,168 4.2 % Daily impact (3) (0.4) (0.8) (0.1) (0.9) (0.5) (0.8) Daily net sales 53.2 2.6 12.1 6.6 66.5 3.4 Foreign currency exchange (4) 0.1 0.1 0.6 5.0 0.6 0.9 Business divestiture (6) 0.3 0.5 — — 0.3 0.4 Daily, organic constant currency net sales $ 53.6 3.2 % $ 12.7 11.6 % 67.4 4.7 % (1) Total Company includes Other.
(3) Grainger's businesses reported in Other do not meet the criteria of a reportable segment. (4) Reflects a tax benefit related to the restructuring costs incurred in the second quarter of 2024. Grainger's reported and adjusted effective tax rates were 23.0% for the year ended December 31, 2024.
(2) Reflects restructuring costs incurred in the second quarter of 2024. (3) Compared to the reported and adjusted results of the prior year period. (4) Grainger's businesses reported in Other do not meet the criteria of a reportable segment. (5) Grainger's reported and adjusted effective tax rates were 25.6% and 23.7% for the twelve months ended December 31, 2025, respectively.
Market value is based on an analysis of inventory trends including, but not limited to, reviews of inventory levels, sales and cost information and on-hand quantities relative to the sales history for the product and shelf-life.
The majority of the Company’s inventory is accounted for using the last-in, first-out (LIFO) method, valued at the lower of cost or market value. Market value is based on an analysis of inventory trends including, but not limited to, reviews of inventory levels, sales and cost information and on-hand quantities relative to the sales history for the product and shelf-life.
The following table shows reported segment results (in millions of dollars): For the Years Ended December 31, 2024 2023 % Change Net sales $ 13,720 $ 13,267 3.4 % Gross profit 5,741 5,546 3.5 Selling, general and administrative expenses 3,356 3,212 4.5 Operating earnings $ 2,385 $ 2,334 2.2 % Net sales of $13,720 million for the year ended December 31, 2024 increased $453 million, or 3% compared to the same period in 2023.
The following table shows reported segment results (in millions of dollars): For the Years Ended December 31, 2025 2024 % Change Net sales $ 13,993 $ 13,720 2.0 % Gross profit 5,832 5,741 1.6 Selling, general and administrative expenses 3,478 3,356 3.6 Operating earnings $ 2,354 $ 2,385 (1.3) % Net sales of $13,993 million for the year ended December 31, 2025 increased $273 million, or 2%, and on a daily constant currency basis increased 3% compared to the same period in 2024.
The Company had approximately $2.3 billion in available liquidity as of December 31, 2024.
The Company had approximately $1.8 billion in available liquidity as of December 31, 2025.
The increase was primarily due to volume. Gross profit of $5,741 million for the year ended December 31, 2024 increased $195 million, or 4%, and gross profit margin of 41.8% was flat compared to the same period in 2023.
The increase was primarily due to volume. Gross profit of $5,832 million for the year ended December 31, 2025 increased $91 million, or 2%, and gross profit margin of 41.7% decreased 10 basis points compared to the same period in 2024.
Operating earnings of $2,385 million for the year ended December 31, 2024 increased $51 million, or 2%, and adjusted operating earnings of $2,400 million increased $40 million, or 2% compared to the same period in 2023. 29 Endless Assortment The following table shows reported segment results (in millions of dollars): For the Years Ended December 31, 2024 2023 % Change Net sales $ 3,134 $ 2,916 7.5 % Gross profit 923 864 6.8 Selling, general and administrative expenses 663 631 5.1 Operating earnings $ 260 $ 233 11.6 % Net sales of $3,134 million for the year ended December 31, 2024 increased $218 million, or 7%, and on a daily constant currency basis, increased 12% compared to the same period in 2023.
Endless Assortment The following table shows reported segment results (in millions of dollars): For the Years Ended December 31, 2025 2024 % Change Net sales $ 3,625 $ 3,134 15.7 % Gross profit 1,085 923 17.6 Selling, general and administrative expenses 740 663 11.6 Operating earnings $ 345 $ 260 32.7 % Net sales of $3,625 million for the year ended December 31, 2025 increased $491 million, which represents a 16% increase on a reported and daily, organic constant currency basis compared to the same period in 2024.
Income tax provision of $595 million for the year ended December 31, 2024 decreased $2 million, compared to the same period in 2023. Adjusted income taxes of $599 million decreased $2 million compared to the same period in 2023. Grainger's effective tax rates were 23.0% and 23.9% for the years ended December 31, 2024 and 2023, respectively.
Income taxes of $622 million for the year ended December 31, 2025 increased $27 million, compared to the same period in 2024. Grainger's effective tax rates were 25.6% and 23.0% for the years ended December 31, 2025 and 2024, respectively. The adjusted effective tax rates were 23.7% and 23.0% for the twelve months ended December 31, 2025 and 2024, respectively.
The increase was primarily driven by continued growth in net earnings. Net cash used in investing activities was $520 million and $422 million for the year ended December 31, 2024 and 2023, respectively. The increase reflects the continued investment in U.S. supply chain capacity expansion throughout 2024.
The decrease was driven by unfavorable changes in working capital primarily due to an increase in accounts receivable and inventory inflation. Net cash used in investing activities was $645 million and $520 million for the year ended December 31, 2025 and 2024, respectively. The increase reflects the continued investment in U.S. and MonotaRO supply chain capacity expansion throughout 2025.
SG&A of $3,356 million for the year ended December 31, 2024 increased $144 million, or 5%, and adjusted SG&A of $3,341 million increased $155 million, or 5% compared to the same period in 2023. The increase was primarily due to higher marketing and payroll and benefit expenses.
SG&A expenses of $740 million for the year ended December 31, 2025 increased $77 million, or 12%, compared to the same period in 2024. Adjusted SG&A of $730 million increased $67 million, or 10%, compared to the same period in 2024. The increase was primarily due to higher marketing expenses in 2025.
For further discussion on the Company's net sales, see the Segment Analysis section below. 28 Gross profit of $6,758 million for the year ended December 31, 2024 increased $262 million, or 4%, and gross profit margin of 39.4% was flat compared to the same period in 2023. Both segments contributed to gross profit dollar expansion in 2024.
Gross profit of $7,009 million for the year ended December 31, 2025 increased $251 million, or 4%, and gross profit margin of 39.1% decreased 30 basis points compared to the same period in 2024. For further discussion on the Company's gross profit, see the Segment Analysis section below.
The adjusted effective tax rates were 23.0% and 23.8%. The Company's effective tax rate was positively impacted from the expiration of a statute of limitation period in 2024. Diluted earnings per share was $38.71 for the year ended December 31, 2024, an increase of 7% compared to $36.23 for the same period in 2023.
The Company's adjusted effective tax rate increase was primarily due to the prior year benefit from the expiration of a statue of limitation period in 2024. Diluted earnings per share was $35.40 for the year ended December 31, 2025, a decrease of 9% compared to $38.71 for the same period in 2024.
Grainger uses its high-touch solutions and endless assortment businesses to serve customers worldwide, who rely on Grainger for products and services that enable them to run safe, sustainable and productive operations.
Overview W.W. Grainger, Inc. is a broad line distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America, Japan and the U.K. Grainger uses its high-touch solutions and endless assortment businesses to serve customers worldwide, who rely on Grainger for products and services that enable them to run safe, sustainable and productive operations.
Both High-Touch Solutions N.A. and the Endless Assortment segments contributed to sales growth in 2024.
Both High-Touch Solutions N.A. and the Endless Assortment segments contributed to sales growth in 2025. For further discussion on the Company's net sales, see the Segment Analysis section below.
(2) Daily net sales are adjusted for the difference in U.S. selling days relative to the prior year period. Daily, organic constant currency net sales are also adjusted to exclude the impact on net sales due to year-over-year foreign currency exchange rate fluctuations and the prior year period results of E&R divested in the fourth quarter of 2023.
Daily, organic constant currency net sales are also adjusted to exclude the impact on net sales due to year-over-year foreign currency exchange rate fluctuations and excludes the results of Cromwell and Zoro U.K. in the comparable prior year period post date of divestiture and closure, respectively, for the year ended December 31, 2025.
Grainger's reported and adjusted effective tax rates were 23.9% and 23.8%, respectively, for the year ended December 31, 2023. 32 Liquidity and Capital Resources Grainger believes its current balances of cash and cash equivalents, marketable securities and availability under its revolving credit facility will be sufficient to meet its liquidity needs for the next twelve months.
The twelve months ended December 31, 2024 reflect a tax benefit related to the restructuring costs incurred in the second quarter of 2024. 33 Liquidity and Capital Resources Grainger believes its current balances of cash and cash equivalents, marketable securities and availability under its revolving credit facility, which supports the Company's commercial paper program, will be sufficient to meet its liquidity needs for the next twelve months.
The increase was primarily due to higher marketing expenses in 2024. SG&A leverage improved 40 basis points compared to the same period in 2023. Operating earnings of $260 million for the year ended December 31, 2024 increased $27 million, or 12%, compared to the same period in 2023.
The increase was primarily due to higher payroll and benefits and marketing expenses in 2025. 30 Operating earnings of $2,354 million for the year ended December 31, 2025 decreased $31 million, or 1%, compared to the same period in 2024. Adjusted operating earnings decreased $46 million, or 2% compared to the same period in 2024.
Net cash used in financing activities was $1,180 million and $1,278 million for the year ended December 31, 2024 and 2023, respectively. The decrease in cash used in financing activities was due to the issuance of long-term debt, which includes $500 million in unsecured senior notes partially offset by higher treasury stock repurchases in 2024.
Net cash used in financing activities was $1,825 million and $1,180 million for the year ended December 31, 2025 and 2024, respectively. The increase in cash used in financing activities was primarily due to the repayment of the 1.85% Senior Notes in the amount of $500 million in 2025.
For the Years Ended December 31, % of Net Sales 2024 2023 % Change 2024 2023 Net sales (1) $ 17,168 $ 16,478 4.2 % 100.0 % 100.0 % Cost of goods sold 10,410 9,982 4.3 60.6 60.6 Gross profit 6,758 6,496 4.0 39.4 39.4 Selling, general and administrative expenses 4,121 3,931 4.8 24.0 23.8 Operating earnings 2,637 2,565 2.8 15.4 15.6 Other expense – net 53 65 (18.5) 0.3 0.4 Income tax provision 595 597 (0.3) 3.5 3.6 Net earnings 1,989 1,903 4.5 11.6 11.6 Less noncontrolling interest 80 74 (8.1) 0.5 0.5 Net earnings attributable to W.W.
For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable U.S. generally accepted accounting principles (GAAP) measures, see "Non-GAAP Measures ." The following table is included as an aid to understanding the changes in Grainger's Consolidated Statements of Earnings for the twelve months ended December 31, 2025 and 2024 (in millions of dollars except per share amounts): For the Years Ended December 31, % of Net Sales 2025 2024 % Change 2025 2024 Net sales (1) $ 17,942 $ 17,168 4.5 % 100.0 % 100.0 % Cost of goods sold 10,933 10,410 5.0 60.9 60.6 Gross profit 7,009 6,758 3.7 39.1 39.4 Selling, general and administrative expenses 4,514 4,121 9.5 25.2 24.0 Operating earnings 2,495 2,637 (5.4) 13.9 15.4 Other expense – net 65 53 22.6 0.3 0.3 Income tax provision 622 595 4.5 3.5 3.5 Net earnings 1,808 1,989 (9.1) 10.1 11.6 Less noncontrolling interest 102 80 27.5 0.6 0.5 Net earnings attributable to W.W.
Adjusted SG&A of $4,105 million increased $200 million, or 5%, compared to the same period in 2023 driven by higher marketing and payroll and benefit expenses. SG&A leverage and adjusted SG&A leverage decreased 20 basis points in 2024. Operating earnings of $2,637 million for the year ended December 31, 2024 increased $72 million, or 3%.
SG&A expenses of $3,478 million for the year ended December 31, 2025 increased $122 million, or 4%, compared to the same period in 2024. Adjusted SG&A increased $137 million, or 4%.
Grainger, Inc. $ 1,909 $ 12 $ 1,921 4.4% 3.8% Diluted earnings per share $ 38.71 $ 0.25 $ 38.96 6.8% 6.2% Twelve Months Ended December 31, 2023 Reported Adjustment (1) Adjusted % Change Reported (2) % Change Adjusted (2) Selling, general and administrative expenses High-Touch Solutions N.A. $ 3,212 $ (26) $ 3,186 Endless Assortment 631 — 631 Other (3) 88 — 88 Selling, general and administrative expenses $ 3,931 $ (26) $ 3,905 8.2% 6.8% Earnings High-Touch Solutions N.A. $ 2,334 $ 26 $ 2,360 Endless Assortment 233 — 233 Other (3) (2) — (2) Operating earnings $ 2,565 $ 26 $ 2,591 15.8% 18.1% Total other expense – net (65) — (65) Income tax provision (5) (597) (4) (601) Net earnings $ 1,903 $ 22 $ 1,925 Noncontrolling interest (74) — (74) Net earnings attributable to W.W.
Grainger, Inc. and adjusted diluted earnings per share for the twelve months ended December 31, 2025 and 2024 (in millions of dollars): 32 Twelve Months Ended December 31, 2025 Reported Adjustment (1) Adjusted % Change Reported (3) % Change Adjusted (3) Selling, general and administrative expenses High-Touch Solutions N.A. $ 3,478 $ — $ 3,478 Endless Assortment 740 (10) 730 Other (4) 296 (186) 110 Selling, general and administrative expenses $ 4,514 $ (196) $ 4,318 9.5% 5.2% Earnings High-Touch Solutions N.A. $ 2,354 $ — $ 2,354 Endless Assortment 345 10 355 Other (4) (204) 186 (18) Operating earnings $ 2,495 $ 196 $ 2,691 (5.4)% 1.4% Total other expense – net (65) — (65) Income tax provision (5) (622) — (622) Net earnings $ 1,808 $ 196 $ 2,004 Noncontrolling interest (102) — (102) Net earnings attributable to W.W.
Recent Events Macroeconomic Conditions The global economy continues to experience volatility and uncertainty including to the commodity, labor and transportation markets, arising from a combination of geopolitical conditions and events, and various economic and financial factors. These conditions have affected the Company's operations and may continue to affect the Company's business, financial condition and results of operations.
Recent Events Macroeconomic Conditions The global economy continues to experience elevated levels of volatility and uncertainty, including within the commodity, labor, and transportation markets, driven by a combination of geopolitical developments and macroeconomic factors that can influence demand, cost and execution risk.
Gross profit of $923 million for the year ended December 31, 2024 increased $59 million, or 7%, and gross profit margin of 29.5% decreased 10 basis points compared to the same period in 2023. SG&A of $663 million for the year ended December 31, 2024 increased $32 million, or 5%, compared to the same period in 2023.
The increase was due to repeat business for the segment and enterprise customer growth at MonotaRO. Gross profit of $1,085 million for the year ended December 31, 2025 increased $162 million, or 18%, and gross profit margin of 29.9% increased 40 basis points compared to the same period in 2024.
Sources of Liquidity Cash and Cash Equivalents As of December 31, 2024 and 2023, Grainger had cash and cash equivalents of $1,036 million and $660 million, respectively. The increase in cash was primarily due to cash flows from operations and issuance of new long-term debt, partially offset by continued capital expenditure spend and higher volume of share repurchases.
Sources of Liquidity Cash and Cash Equivalents As of December 31, 2025 and 2024, Grainger had cash and cash equivalents of $585 million and $1,036 million, respectively. The decrease in cash was primarily due to cash used in financing activities due to repayment of the 1.85% Senior Notes in the amount of $500 million and continued capital project spending.
For further discussion on the Company's gross profit, see the Segment Analysis section below. Selling, general, and administrative (SG&A) expenses of $4,121 million for the year ended December 31, 2024 increased $190 million, or 5%.
Selling, general, and administrative (SG&A) expenses of $4,514 million for the year ended December 31, 2025 increased $393 million, or 10%. Adjusted SG&A of $4,318 million increased $213 million, or 5%, due to higher payroll and benefits and marketing expenses in 2025.
The Company has implemented strategies designed to mitigate certain adverse effects from the impact of the changing inflationary environment while remaining market price competitive. Historically, the Company’s broad and diverse customer base and the nondiscretionary nature of the Company’s products to its customers has helped to insulate it from the effects of recessionary periods in the industrial MRO market.
Historically, the Company's broad and diverse customer base and the generally nondiscretionary nature of its products have provided a degree of resilience during periods of economic contraction in the industrial MRO market.
Removed
Overview W.W. Grainger, Inc. is a broad line distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America, Japan and the United Kingdom (U.K.).
Added
These dynamics, together with recent changes in U.S. and foreign tariff and trade policies, continue to drive intermittent disruptions in global capital markets and supply chains. These developments may impact the Company’s operations, business, financial condition, and results of operations.
Removed
The Company continues to monitor economic conditions in the U.S. and globally, and the impact of macroeconomic pressures, including repercussions from changes in interest rates, currency exchange fluctuations, changing inflationary environment, and a potential recession on the Company’s business, customers, suppliers and other third parties.
Added
The Company is actively monitoring economic conditions in the U.S. and key international markets, including the continued uncertainty regarding evolving tariff and trade policies, changes in interest rates, foreign currency exchange rate fluctuations, inflationary pressures, and the risk of a global or regional economic recession.
Removed
The full extent and impact of these conditions are uncertain and cannot be predicted at this time.
Added
Although the precise timing and magnitude of these factors remains uncertain, the Company believes its strategy is well positioned to navigate a range of outcomes.
Removed
For further information regarding the Company's non-GAAP measures including reconciliations to the most directly comparable U.S. generally accepted accounting principles (GAAP) measures, see "Non-GAAP Measures ." The following table is included as an aid to understanding the changes in Grainger's Consolidated Statements of Earnings for the twelve months ended December 31, 2024 and 2023 (in millions of dollars).
Added
The Company continues to evaluate the impact of evolving tariff and trade policies, including potential changes in product sourcing strategies, cost management and customer pricing, and has implemented various strategies designed to mitigate certain adverse effects of changing inflationary conditions and challenges in our supply chain, while striving to maintain market price competitiveness.
Removed
Adjusted operating earnings of $2,653 million increased $62 million, or 2%, compared to the same period in 2023 due to higher gross profit dollars, partially offset by increased SG&A expense. Operating margin and adjusted operating margin decreased 20 basis points in 2024.
Added
The full extent and impact of ongoing macroeconomic conditions, including recent, unprecedented tariff-related developments and shifting government budget policies and priorities at the municipal, state, and national levels, 27 remains uncertain and cannot be predicted at this time, but may impact the Company’s operations, business, financial condition and results of operations.
Removed
SG&A leverage decreased 20 basis points and adjusted SG&A leverage decreased 30 basis points compared to the same period in 2023.
Added
As discussed in the "Non-GAAP Measures" section, we have adjusted the current year results to exclude one-time losses recorded in SG&A expenses of $186 million within Other and $10 million within Endless Assortment related to the Cromwell divestiture and closure of Zoro U.K., respectively.
Removed
The increase was due to sales growth of 12%, driven by customer acquisition for the segment and enterprise customer growth at MonotaRO. Sales growth was partially offset by unfavorable currency exchange of 5% due to changes in the exchange rate between U.S. dollar and the Japanese yen.
Added
(2) Daily net sales are adjusted for the difference in U.S. selling days relative to the prior year period.
Removed
The Company does not expect these actions to have a material effect on its future results of operations. 30 Business Divestitures In the fourth quarter of 2023, Grainger divested E & R Industrial Sales, Inc. (E&R) and recorded a one-time pre-tax loss on the divestiture of $26 million in SG&A.
Added
Operating earnings of $2,495 million for the year ended December 31, 2025 decreased $142 million, or 5%, compared to the same period in 2024. Adjusted operating earnings of $2,691 million increased $38 million, or 1%, compared to the same period in 2024.
Removed
Grainger, Inc. $ 1,829 $ 22 $ 1,851 18.2% 21.2% Diluted earnings per share $ 36.23 $ 0.44 $ 36.67 20.5% 23.6% (1) Reflects restructuring costs incurred in the second quarter of 2024 and the loss on divestiture of E&R in the fourth quarter of 2023. (2) Compared to the reported and adjusted results of the prior year period.
Added
Operating earnings of $345 million for the year ended December 31, 2025 increased $85 million, or 33%, compared to the same period in 2024. Adjusted operating earnings of $355 million increased $95 million, or 37%, compared to the same period in 2024.
Removed
(5) Reflects a one-time tax benefit recognized upon the divestiture of E&R in the fourth quarter of 2023.
Added
Exiting Market in the United Kingdom In 2025, Grainger performed an assessment of its businesses in the United Kingdom (U.K.) and made the decision to exit the U.K. market in order to concentrate efforts where it can deliver the greatest long-term impact. On December 17, 2025, Grainger completed the divestiture of the Cromwell business.
Removed
Inventories Company inventories primarily consist of merchandise purchased for resale and are valued at the lower of cost or market value. The majority of the Company’s inventory is accounted for using the last-in, first-out (LIFO) method.
Added
The Company recorded a loss of $186 million in SG&A expenses related to the sale. There was no tax benefit as a result of this loss. Additionally, the Company completed the closure of Zoro U.K. in its Endless Assortment segment during the fourth quarter of 2025. Expenses related to the closure of $10 million were also recorded in SG&A expenses.

… 4 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−2 removed1 unchanged
The Company regularly monitors commodity trends and, as a broad line supplier, mitigates any material exposure to commodity price risk by having alternative sourcing plans in place that mitigate the risk of supplier concentration, passing commodity-related inflation to customers and continuing to scale its distribution networks, including its transportation infrastructure. 36
The Company regularly monitors commodity trends and, as a broad line supplier, mitigates any material exposure to commodity price risk by having alternative sourcing plans in place that mitigate the risk of supplier concentration, passing commodity-related inflation to customers and continuing to scale its distribution networks, including its transportation infrastructure. 37
For the fiscal year ended December 31, 2024, approximately 18% of the Company's net sales were denominated in a currency other than the Company's functional U.S. dollar currency. Consequently, the Company is exposed to the impact of exchange rate volatility primarily between the U.S. dollar and the Japanese yen, Mexican peso, Canadian dollar and the British pound sterling.
For the fiscal year ended December 31, 2025, approximately 19 % of the Company's net sales were denominated in a currency other than the Company's functional U.S. dollar currency. Consequently, the Company is exposed to the impact of exchange rate volatility primarily between the U.S. dollar and the Japanese yen, Mexican peso, Canadian dollar and the British pound sterling.
Commodity Price Risks Grainger’s transportation costs are exposed to fluctuations in the price of fuel and some sourced products contain commodity-priced materials.
A hypothetical 10% change in the relative value of the U.S. dollar would not materially impact the Company's net earnings for 2025. Commodity Price Risks Grainger’s transportation costs are exposed to fluctuations in the price of fuel and some sourced products contain commodity-priced materials.
Removed
A hypothetical 10% change in the relative value of the U.S. dollar would not materially impact the Company's net earnings for 2024. Interest Rate Risks Grainger is exposed to interest rate risk on its long-term debt. In February 2020, Grainger entered into certain derivative instrument agreements to hedge a portion of its fixed-rate long-term debt to manage this risk.
Removed
The annualized effect of a hypothetical 1 percentage point increase in interest rates on Grainger’s variable-rate debt obligations would not materially impact the Company's net earnings for 2024. For debt and derivative instrument information, see Note 5 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K.

Other GWW 10-K year-over-year comparisons