W.W. Grainger Inc.

First Quarter Performance: Grainger reported Q1 2025 sales of $4.3 billion, a 1.7% increase (4.4% on a daily constant currency basis) compared to the previous year. Operating margins stood at 15.6%, with diluted EPS of $9.86, representing a 2.5% increase YoY. Despite muted demand, the company's results met initial expectations, and operating cash flow came in at $646 million, allowing for $380 million returned to shareholders through dividends and buybacks.

Dividend Commitment: Grainger announced a 10% increase in its quarterly dividend, marking the 54th consecutive year of dividend increases. This reflects the company’s commitment to returning capital to shareholders while maintaining a balanced approach to capital allocation.

Tariff Impact and Pricing Strategy: Tariff uncertainties continue to be a discussion point, but Grainger has strategically implemented price increases primarily on direct imports while monitoring supplier negotiations. The company aims for price-cost neutrality over time, positioning itself to navigate the tariff landscape while remaining competitive. Current estimates indicate price impact from tariffs being around 1% to 1.5%.