Graco Inc. Adjusts Pricing Strategy Amid Increased Component Costs

Graco Inc (GGG) is responding to increased component costs with a September price hike, citing tariff implementations. The company will introduce a selective price increase to counterbalance additional costs, deviating from previous pricing methods. Despite this, GGG maintains its annual forecast, projecting low single-digit sales growth by 2025 on an organic constant-currency basis. Wall Street analysts forecast an average target price of $91.72, implying an upside of 5.20% from the current price. The estimated GF Value for GGG in one year is $85.86, suggesting a downside of 1.51% from the current price.

Graco Inc. (GGG), a leading provider of fluid handling and spraying solutions, has announced a strategic response to the recent surge in component costs. The company will implement a selective price increase in September, deviating from its usual pricing methods to offset the additional costs, primarily driven by recent tariff implementations [1]. This move comes amidst a challenging trade environment for industrial manufacturers.

In the second quarter ended June 27, 2025, Graco reported a 3% increase in net sales, reaching $571.8 million. The company attributed this growth to incremental sales from acquired operations, which contributed 6 percentage points to the overall sales growth. However, the gross profit margin rate declined by approximately 2 percentage points, primarily due to higher product costs, including $4 million in increased tariff costs, and the unfavorable effects of lower margin rates from acquired operations [1].

Despite the price hike, Graco maintains its annual forecast, projecting low single-digit sales growth by 2025 on an organic constant-currency basis. The company's President and Chief Executive Officer, Mark Sheahan, expressed confidence in the company's ability to mitigate the effects of the tariffs with the upcoming price increase and new product launches. Wall Street analysts forecast an average target price of $91.72 for GGG, implying an upside of 5.20% from the current price. The estimated GF Value for GGG in one year is $85.86, suggesting a downside of 1.51% from the current price [2].

Graco's strategy to counteract the increased costs is a prudent response to the current economic climate. By selectively raising prices, the company aims to stabilize its margins and maintain its growth trajectory. The company's ability to navigate these challenges and stick to its growth projections will be closely watched by investors and financial professionals alike.

References:
[1] https://investors.graco.com/news-releases/news-release-details/graco-reports-second-quarter-results-4
[2] Financial News Article on Graco Inc. (GGG)