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W.W. Grainger, Inc.
S&P 500
$63.2B
Market Cap
28.5
P/E
2.74
PEG
28.9%
ROCE
45.3%
ROE
0.64
D/E
13.9%
OPM
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🌏 Global Investor Returns
Currency-adjusted total returns for GWW including FX impact
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Ratio Health
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Shareholding
About

W.W. Grainger, Inc., together with its subsidiaries, distributes maintenance, repair, and operating products and services primarily in North America, Japan, and the United Kingdom.

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⭐ Superinvestors Holding GWW
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Manager Shares Value % of Fund Period
Jim Simons Renaissance Technologies LLC 19.2K $21.0M 0.03% Mar 2026

SEC Form 13F data. 45-day lag from quarter end.

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3-Statement Financial Model
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Good quarter Investor Presentation One-Pager? Q1 2026
Revenue
$4.742B
+10.1% YoY
Operating Income
$793M
+18.0% YoY
Operating Margin
16.7%
+110 bps YoY
Net Income
$555M
+15.9% YoY
What Went Right
  • Sales grew 12.2% daily organic constant currency, well above initial expectations.
  • Operating margin expanded 110 bps to 16.7% driven by gross margin expansion and SG&A leverage.
  • Diluted EPS of $11.65 grew 18.2% YoY, beating the prior guide.
What to Watch
  • Fuel cost leakage from free parcel shipping for large customers is pressuring margins and expected to build in Q2.
  • Private label inventory costs (FIFO) will hit Q2 as lower-cost layers were not sold through in Q1.
  • Ongoing tariff and geopolitical uncertainty may lead to further cost pressures, especially in Japan from Middle East conflict.
Management Guidance
  • Full-year 2026 daily organic constant currency sales growth raised to 9.5% – 12.0%.
  • Full-year 2026 diluted EPS raised to $44.25 – $46.25 (midpoint $45.25).
  • Q2 2026 sales expected north of $4.9B (daily organic constant currency growth approaching 12%) with operating margin in the low 15% range.
Investor Lens
The thesis is stronger after this call. Grainger delivered a clear beat, raised guidance, and demonstrated pricing power and volume momentum despite a challenging tariff environment. While near-term margin headwinds from fuel and private label costs are real, management's track record of price-cost management, strong execution, and cash generation (free cash flow $739M in Q1) supports confidence in the full-year outlook. The continued share gains and positive MRO demand signals further reinforce the long-term growth story.
From investor presentation · AI-generated analysis · Not investment advice
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📈 STRONG Strong Q1 beat with 12.2% organic growth; guidance raised.
Revenue
Total company sales reached $4.742B, up 10.1% YoY. On a daily organic constant currency basis, growth was 12.2%, driven by High-Touch Solutions (10.0% daily constant currency) and Endless Assortment (21.9% daily organic constant currency).
Profitability
Net earnings attributable to Grainger were $555M, up 15.9% YoY, with diluted EPS of $11.65, up 18.2% YoY. The increase was primarily due to strong operating performance and fewer shares outstanding, partly offset by a higher effective tax rate (25.1% vs 23.9%).
Margins
Gross margin was 40.0%, up 30 bps YoY. Operating margin reached 16.7%, up 110 bps YoY, driven by gross margin flow-through and SG&A leverage in both segments. High-Touch Solutions operating margin was 18.3% (+60 bps), Endless Assortment operating margin was 10.6% (+190 bps).
Balance Sheet
Operating cash flow was $739M; free cash flow after $170M capex was $569M. $345M returned to shareholders via dividends and share repurchases. Total company operating cash flow guidance raised to $2.2 – $2.4 billion for 2026.
Key Risks
Management flagged fuel cost leakage from free parcel shipping, expected to intensify in Q2. Private label inventory costs (FIFO) will hit in Q2. Tariff and geopolitical uncertainty, especially from Middle East conflict impacting Japan's raw material costs, could create further headwinds.
Outlook
For Q2 2026, sales are expected north of $4.9B (approaching 12% daily organic constant currency growth) with operating margin in the low 15% range. Full-year 2026 diluted EPS raised to $44.25 – $46.25, reflecting strong Q1 momentum and continued execution.
Generated by AI · Q1 2026 results · Not investment advice
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📊 Analysis Methodology

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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

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Investment Risk:
Investing in securities, including US equities and ETFs, involves inherent risks including the potential loss of principal. All investments are subject to market fluctuations, economic conditions, regulatory changes, and other factors that may affect their value. Past performance is not indicative of future results. This analysis is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

No Investment Recommendation:
This analysis does not constitute, nor should it be interpreted as, an offer, solicitation, or recommendation to buy, sell, or hold any securities or financial products. Investors are strongly advised to conduct their own independent research and due diligence and to consult with a licensed financial advisor or an SEC-registered investment adviser before making any investment decisions, taking into account their individual financial situation, risk tolerance, and investment objectives.

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Conflict of Interest Disclosure:
The author and/or analyst may currently hold or have previously held positions in the securities discussed. Any such positions are not intended to influence the objectivity or independence of the analysis. This research is produced independently and is not sponsored, endorsed, or commissioned by any company or institution.

Information Sources:
The analysis is based on publicly available information including SEC filings (10-K, 10-Q), annual reports, management commentary, and publicly available financial data. Information is believed to be accurate as of the date of publication but may be subject to change without notice. Readers are encouraged to independently verify all information before acting upon it.

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