What were the key takeaways from W.W. Grainger’s earnings call?

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What is the market's earnings forecast for W.W. Grainger next quarter?

What does W.W. Grainger do and what are its main business segments?

What factors drove the changes in W.W. Grainger's revenue and profit?

What is W.W. Grainger's gross profit margin?

- **Revenue Beat Expectations**: $4.7B Q3 sales (+6.1% YoY) despite U.S. government shutdown headwinds.
- **U.K. Exit Benefits**: $40M annual sales reduction but +20bp margin improvement.
- **LIFO Impact Management**: 70bp LIFO drag in Q3, with normalization expected as inflation eases.
- **EA Momentum**: Endless Assortment segment up 18.2%, driven by Zoro's 17.8% growth and MonotaRO's 12.6% expansion.
- **2026 Outlook**: Gross margins to stabilize at 39%, with LIFO impacts fading by mid-2026.

**【CEO Summary Section】**
- **Revenue Growth**: Q3 2025 revenue of $4.7 billion, up 6.1% year-over-year, driven by strong execution in North America and Japan. 
- **U.K. Exit Strategy**: Announced sale of Cromwell and closure of Zoro U.K., reducing annual sales by $40 million but improving operating margins by 20 basis points.
- **Government Shutdown Impact**: Q4 sales expected to be 1-2% lower due to federal shutdown, with potential recovery post-resolution.

**【CFO Financial Commentary】**
- **Gross Margins**: 38.6% for Q3, down 60 basis points YoY due to LIFO headwinds and tariff-related costs. Excluding LIFO, margins would have improved YoY.
- **Operating Expenses**: $597 million in operating cash flow, with $399 million returned to shareholders via dividends and buybacks.
- **2026 Outlook**: Gross margins expected to stabilize around 39%, with LIFO impacts persisting through mid-2026.

**【Q&A Highlights】**
- **LIFO Accounting**: CFO clarified LIFO drag of ~70 basis points in Q3, with normalization expected as inflation cools.
- **Endless Assortment (EA) Growth**: Zoro U.S. up 17.8%, MonotaRO up 12.6%, driven by improved customer retention and digital capabilities.
- **Tariff Strategy**: Incremental pricing actions in Q4 to offset Section 232 tariffs, with 2026 price roll-over expected to mitigate LIFO impacts.

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