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- **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.

W.W. Grainger, Inc. (GWW) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

GWW

GWW fundamentals

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