Graco Q2 Earnings Miss Estimates Despite 3.4% Revenue Growth

Graco Inc reported Q2 earnings of $127.6 million, or $0.76 per share, down from $133.0 million, or $0.77 per share last year. The company's revenue rose 3.4% to $571.8 million. The earnings missed the Street estimates of $0.79 per share. Excluding items, Graco reported adjusted earnings of $126.9 million or $0.75 per share.

Graco Inc. (NYSE: GGG), a leading manufacturer of fluid and coating equipment, reported its Q2 2025 earnings on July 2, 2025. The company announced a net income of $127.6 million, or $0.76 per share, down from $133.0 million, or $0.77 per share in the same quarter last year [2]. The company's revenue rose by 3.4% to $571.8 million, slightly missing analyst estimates of $590.2 million [1].

Graco's adjusted earnings per share (EPS) were $0.75, down 4.9% from analysts' consensus estimates of $0.79 [2]. The company's operating margin declined to 27.5% from 29.2% in the same quarter last year, indicating increased operational pressures. Graco's President and Chief Executive Officer, Mark Sheahan, attributed the decline to higher component costs due to tariffs, which the company plans to offset with a targeted price increase beginning in September [2].

Graco's revenue growth was driven by a 3.4% increase in sales, despite a 3% organic revenue decline in the Contractor segment. The Process segment, which includes pumps and valves, showed a 6.7% increase in sales [2]. The company maintained its full-year revenue outlook of low single-digit sales growth on an organic constant-currency basis [2].

Over the past two years, Graco has missed Wall Street's revenue estimates six times, which has kept analysts cautious yet hopeful for the upcoming results. The company's stock has remained relatively unchanged, currently trading at $86.19, with an average analyst price target of $91.15 [1].

In the broader industrial machinery sector, peer companies like GE Aerospace and Worthington have reported mixed results. GE Aerospace recorded a significant 21.2% year-on-year revenue growth, while Worthington's revenue remained flat but exceeded estimates by 5.6% [1]. This mixed performance among peers could provide insights into Graco's potential outcomes.

Graco's earnings report provides investors with a snapshot of the company's performance and the challenges it faces. The company's ability to navigate higher costs and maintain its revenue growth will be crucial for its future success. As Graco continues to implement its pricing strategy and navigate the market, investors will closely monitor its progress.

References:
[1] https://www.indexbox.io/blog/graco-inc-set-to-release-q2-earnings-report/
[2] https://finance.yahoo.com/news/graco-nyse-ggg-misses-q2-211646118.html