Core Viewpoint - W.W. Grainger, Inc. is set to announce its fiscal fourth-quarter earnings for 2025, with analysts projecting a slight decline in profit per share compared to the previous year [1][2]. Financial Performance - Analysts expect GWW to report a profit of $9.45 per share on a diluted basis for Q4 2025, down 2.7% from $9.71 per share in the same quarter last year [2]. - For the full fiscal year 2025, GWW is projected to report an EPS of $39.48, reflecting a 1.3% increase from $38.96 in fiscal 2024 [3]. - EPS is anticipated to rise 10.7% year over year to $43.71 in fiscal 2026 [3]. - GWW's adjusted EPS for Q3 was reported at $10.21, exceeding Wall Street expectations of $9.93, with revenue reaching $4.7 billion, surpassing forecasts of $4.6 billion [6]. Stock Performance - GWW stock has underperformed the S&P 500 Index, which gained 16.4% over the past 52 weeks, with GWW shares down 4.7% during the same period [4]. - The stock also lagged behind the Industrial Select Sector SPDR Fund, which saw a 17.6% increase [4]. Market Position and Strategy - GWW is facing challenges from inflation and tariffs, which have impacted margins despite steady demand [5]. - The company is implementing productivity initiatives and price hikes to mitigate costs [5]. - GWW is streamlining its portfolio by exiting the UK business and investing in digital transformation to enhance growth and profitability [5]. Analyst Sentiment - The consensus opinion on GWW stock is cautious, with a "Hold" rating overall; out of 19 analysts, three recommend a "Strong Buy," 13 suggest a "Hold," one advises a "Moderate Sell," and two advocate a "Strong Sell" [7]. - The average analyst price target for GWW is $1,034.15, indicating a potential upside of 2.5% from current levels [7].

Core Insights - Parnassus Investments reported that the S&P 500 Index increased by 8.12% in Q3 2025, driven by investor optimism regarding monetary easing, strong consumer demand, and solid corporate earnings [1] - The Parnassus Core Equity Fund (Investor Shares) returned 2.57% in Q3 2025, underperforming the S&P 500 Index, with a year-to-date return of 9.89% compared to the index's 14.83% [1] Company Highlights - W.W. Grainger, Inc. (NYSE:GWW) is highlighted as a key holding in the Parnassus Core Equity Fund, with a one-month return of 9.89% and a 52-week loss of 5.14% [2] - As of December 22, 2025, W.W. Grainger, Inc. shares closed at $1,034.87, with a market capitalization of $49.21 billion [2] - The company reported Q3 2025 sales of $4.7 billion, reflecting a 6.1% increase on a reported basis and a 5.4% increase on a daily constant currency basis [4] Investment Strategy - The Parnassus Core Equity Fund has reallocated assets by trimming IT holdings in Advanced Micro Devices and Broadcom, and investing in W.W. Grainger, Inc. due to its economies of scale, network effects, and strong customer loyalty [3] - The management team of W.W. Grainger, Inc. is noted for its proven track record of outperforming industry peers, positioning the company to benefit from trends such as digitization and nearshoring [3]

Core Viewpoint - W.W. Grainger Inc. has demonstrated exceptional dividend safety with a 53-year history of consecutive dividend increases, supported by strong cash flow and low payout ratios, positioning it as a reliable investment for income-focused investors [5][12]. Financial Metrics - The annual dividend is $8.62 per share, yielding 0.89% [5][13]. - Operating cash flow for 2024 was $2.11 billion, with dividend payments totaling $421 million, resulting in a coverage ratio of 5.0x [5][12]. - Free cash flow for 2024 was $1.57 billion after capital expenditures of $541 million, covering the dividend 3.7 times [5][12]. Payout Ratios - The free cash flow payout ratio is 27%, indicating substantial room for dividend growth or economic downturns [6][12]. - The earnings payout ratio stands at 24%, reflecting a healthy distribution of earnings to shareholders [6][7]. Dividend Growth History - Grainger has increased its dividend every year since 1972, with a five-year compound annual growth rate of approximately 6% [8]. - Total dividend payments rose from $316 million in 2018 to $421 million in 2024, marking a 33% increase over six years [8][9]. Recent Dividend Payments - In 2024, total dividends paid were $421 million, a year-over-year increase of 7.4% [9]. - The company has consistently raised dividends, even during economic downturns such as the 2008 financial crisis and the 2020 pandemic [9]. Shareholder Returns - In 2024, Grainger returned $1.62 billion to shareholders through dividends and share repurchases, with dividends representing just 22% of free cash flow [11][12]. - The company maintains a strong return on equity of 46.7%, supporting continued dividend growth [12].

Core Insights - W.W. Grainger, Inc. (GWW) is valued at $44.9 billion and serves over 4.5 million customers across various sectors, including manufacturing and healthcare [1][2] - The company has a strong brand reputation and a hybrid business model that combines traditional service with e-commerce platforms, providing a competitive edge in the industrial distribution industry [2] Financial Performance - GWW's stock has declined 20% from its 52-week high of $1,201.68, with a 5.5% decrease over the past three months, underperforming the Industrial Select Sector SPDR Fund's (XLI) 1.5% gain [3] - Year-to-date, GWW shares are down 8.8% and 19.5% over the past 52 weeks, while XLI has seen YTD gains of 15.9% and 6.9% returns over the last year [4] - On October 31, GWW reported third-quarter results with adjusted EPS of $10.21, exceeding expectations of $9.93, and revenue of $4.7 billion, slightly above the consensus estimate of $4.6 billion [5]

Core Insights - W.W. Grainger, Inc. (GWW) is a major distributor of maintenance, repair, and operating products, with a market cap of $45.3 billion [1] - The company has faced significant stock underperformance, declining 22.9% over the past year compared to an 11% increase in the S&P 500 Index [2] - GWW's stock has also underperformed relative to the Industrial Select Sector SPDR Fund (XLI), which gained 5.2% over the same period [3] Financial Performance - GWW reported Q3 results with an adjusted EPS of $10.21, exceeding Wall Street's expectation of $9.93, and revenue of $4.7 billion, surpassing the forecast of $4.6 billion [5] - For the full fiscal year, GWW expects adjusted EPS between $39 and $39.75, and revenue between $17.8 billion and $18 billion [5] - Analysts project a 1.3% growth in EPS to $39.46 for the current fiscal year, with a mixed earnings surprise history [6] Analyst Sentiment - Among 19 analysts covering GWW, the consensus rating is a "Hold," with three "Strong Buy," 13 "Holds," one "Moderate Sell," and two "Strong Sells" [6] - The current analyst sentiment is more bearish than two months ago, with one analyst suggesting a "Strong Sell" [7] Strategic Initiatives - GWW is facing challenges from inflation and tariffs, which have impacted margins, but has implemented productivity initiatives and price hikes to mitigate costs [4] - The company is streamlining its portfolio by exiting the UK business and investing in digital transformation to enhance growth and profitability [4]

Core Insights - W.W. Grainger's third quarter results were influenced by inflation, tariff-related inventory costs, and operational execution focus [1] - Customer demand for maintenance and repair solutions remained steady, particularly in contractor and healthcare segments, with manufacturing customers showing improvement [1] - CEO emphasized the importance of inventory management for operational efficiency [1] Financial Performance - Revenue reached $4.66 billion, exceeding analyst estimates of $4.64 billion, reflecting a 6.1% year-on-year growth [6] - Adjusted EPS was $10.21, beating analyst expectations of $9.95 by 2.6% [6] - Adjusted EBITDA was $772 million, surpassing estimates of $739.3 million, with a margin of 16.6% [6] - The company slightly raised its full-year revenue guidance to $17.9 billion from $17.85 billion [6] - Operating margin decreased to 11% from 15.6% in the same quarter last year [6] - Organic revenue growth was 5.4% year-on-year, slightly below the 5.7% growth expected by analysts [6] Strategic Insights - CFO clarified that exiting the U.K. business would reduce fourth-quarter sales by $40 million but improve annual operating margin [6] - Gross margins are expected to stabilize near 39% as inflationary impacts recede, despite ongoing LIFO accounting headwinds [6] - The company is not considering switching from LIFO to FIFO accounting due to potential large tax implications [6] - CEO estimated a daily one-point impact on total sales from potential government shutdowns, with longer shutdowns posing greater risks [6] - Investments in AI applications are being made to enhance customer experience and operational efficiency [6]

Core Viewpoint - W.W. Grainger's shares have underperformed, with an 8.7% loss over the past six months compared to the S&P 500's 19.5% gain, raising questions about potential investment opportunities or risks [1] Group 1: Organic Growth Concerns - W.W. Grainger's organic revenue growth averaged 4.9% year-on-year over the last two years, indicating waning demand in its core business and suggesting a need for improvements in products, pricing, or go-to-market strategies [3][4] - The projected revenue growth for W.W. Grainger is modest, with analysts expecting a 4.4% increase over the next 12 months, which aligns closely with its historical growth rate of 8.7% over the past five years, indicating that newer products and services may not enhance top-line performance [5][6] Group 2: Earnings Performance - W.W. Grainger's annual EPS growth of 5.9% over the last two years reflects its revenue trends, suggesting that the company has maintained per-share profitability while expanding [7] - The stock is currently trading at a forward P/E of 22.5, which is considered reasonable; however, the company's underlying fundamentals present significant downside risk, leading to a conclusion that there may be better investment opportunities available [8]

Group 1 - Apple, International Business Machines, and W.W. Grainger will trade ex-dividend on 11/10/25, with respective dividends of $0.26, $1.68, and $2.26 [1] - The expected price adjustments for the stocks on the ex-dividend date are approximately 0.10% lower for Apple, 0.55% lower for IBM, and 0.23% lower for W.W. Grainger [2] - Apple is a contender for the "Dividend Aristocrats" index, having increased dividends for over 14 years [3] Group 2 - The estimated annualized yields are 0.38% for Apple, 2.19% for IBM, and 0.94% for W.W. Grainger, indicating varying levels of dividend stability [7] - In recent trading, Apple shares remained flat, while IBM shares increased by about 2% and W.W. Grainger shares rose by approximately 0.7% [8]

Core Insights - W.W. Grainger (GWW) is highlighted as a strong long-term investment, having seen its shares rise less than 20% since the beginning of 2024, underperforming the broader market [1] Company Performance - W.W. Grainger was trading at all-time highs at the start of 2024, indicating strong market confidence in the company [1] - The stock has not kept pace with the wider market performance, suggesting potential concerns or market dynamics affecting its growth [1] Investment Strategy - The investment group "Value In Corporate Events" focuses on identifying opportunities through major corporate events such as IPOs, mergers & acquisitions, and earnings reports [1] - The group aims to cover 10 major events monthly, seeking to find the best investment opportunities for its members [1]

Financial Performance - Net sales for Q3 2025 reached $4,657 million, a 6.1% increase from $4,388 million in Q3 2024[10] - Gross profit for the nine months ended September 30, 2025, was $5,263 million, compared to $5,082 million for the same period in 2024, reflecting a 3.6% increase[10] - Operating earnings decreased to $511 million in Q3 2025 from $686 million in Q3 2024, representing a decline of 25.5%[10] - Net earnings attributable to W.W. Grainger, Inc. for the nine months ended September 30, 2025, were $1,255 million, down from $1,434 million in 2024, a decrease of 12.5%[10] - For the three months ended September 30, 2025, net earnings attributable to W.W. Grainger, Inc. were $490 million, a decrease of 39.5% compared to the prior year[113] - Diluted earnings per share were $6.12, a decrease of 38% from $9.87 in the same period last year[74] - Diluted earnings per share for the nine months ended September 30, 2025, was $25.97, a decrease of 10% compared to $29.00 in 2024, while adjusted diluted earnings per share increased by 3%[93] Cash and Liquidity - Cash and cash equivalents decreased to $535 million as of September 30, 2025, from $1,036 million at the end of 2024[15] - The company reported a net cash provided by operating activities of $1,620 million for the nine months ended September 30, 2025, compared to $1,683 million in 2024[18] - The company maintains a liquidity position with approximately $1.8 billion available as of September 30, 2025[118] Shareholder Equity and Dividends - Total shareholders' equity increased to $3,961 million as of September 30, 2025, from $3,703 million at the end of 2024[15] - The company paid cash dividends of $358 million during the nine months ended September 30, 2025, compared to $321 million in 2024[18] - A quarterly dividend of $2.26 per share was declared on October 29, 2025, payable on December 1, 2025, to shareholders of record on November 10, 2025[55] Capital Expenditures and Investments - Capital expenditures for the nine months ended September 30, 2025, were $558 million, significantly higher than $283 million in 2024[18] - The company issued $2.8 billion in unsecured debt (Senior Notes) between 2015 and 2024 to support working capital needs and long-term cash requirements[41] - MonotaRO entered into ¥9 billion term loan agreements in June 2025 and an additional ¥4 billion term loan in September 2025 to fund the expansion of its distribution center network[43][44] Revenue Breakdown - For the three months ended September 30, 2025, total net sales were distributed as follows: Manufacturing 30%, Government 20%, Wholesale 7%, and Other industries contributing to 10%[33] - The total company revenue for the three months ended September 30, 2025, was composed of 78% from High-Touch Solutions N.A. and 20% from Endless Assortment[33] - High-Touch Solutions N.A. segment net sales were $3,635 million, an increase of $120 million or 3.4% compared to 2024, driven primarily by volume[76] - Endless Assortment segment net sales reached $935 million, an increase of $144 million or 18.2%, attributed to repeat business and enterprise customer growth[80] Operating Expenses - Selling, general and administrative (SG&A) expenses increased to $1,287 million, a rise of $253 million or 24.5% compared to the prior year, primarily due to higher marketing expenses[71] - SG&A expenses increased to $3,402 million, up $324 million, or 11%, with adjusted SG&A expenses of $3,206 million, an increase of $144 million, or 5%[90] Asset Management - Total assets increased slightly to $8,848 million as of September 30, 2025, compared to $8,829 million at the end of 2024[15] - Total assets held for sale as of September 30, 2025, amounted to $50 million, while total liabilities held for sale were $82 million[30] - As of September 30, 2025, total property, buildings, and equipment amounted to $4,447 million, with a net value of $2,237 million after accumulated depreciation[36] Impairments and Market Conditions - The company recorded an asset impairment loss of $186 million related to the planned sale of its Cromwell business in the U.K.[29] - The company did not identify any significant events indicating impairment indicators for goodwill during the reporting periods[37] - Grainger's forward-looking statements are subject to various risks and uncertainties, including inflation and competitive pricing pressures[132] Corporate Governance - Grainger's disclosure controls and procedures were evaluated as effective by the Chief Executive Officer and Chief Financial Officer[136] - There were no changes in Grainger's internal control over financial reporting that materially affected its effectiveness for the quarter ended September 30, 2025[137] - The Executive Severance Plan and Executive Change in Control Severance Plan will become effective as of December 31, 2025[145]