W.W. Grainger Inc.

Strong Q2 performance; raising full-year outlook - Total reported sales +10.3% YoY (or +13.7% on a daily organic constant-currency basis). - Operating margin: 16.1% (+120 bps YoY). Diluted EPS: $12.01 (up >20% YoY). - Operating cash flow: $444M; returned $341M to shareholders via dividends + share repurchases. - Positive momentum continues into the third quarter: preliminary July sales >13% (daily organic constant currency).

Tariff refund benefit helped margins; guidance raised but with “puts and takes” - Q2 gross margin 39.5% (+100 bps YoY) and operating margin benefited from ~90 bps of IEEPA tariff refund tailwind; management said results were in line with verbal guide once normalized. - Raised outlook: - FY daily organic constant-currency sales growth: 11.5% to 13% (reflects Q2 performance + ongoing demand). - FY operating margin range: 15.8% to 16.2% (includes tariff refund benefit, partially offset by mix/cost timing ahead of September pricing). - FY EPS: $45.50 to $47.25 (up >17% YoY at the midpoint), +$1+ improvement at midpoint vs prior guidance. - Refund expectations: management said the vast majority already accrued/received; back-half refund impact expected to be “fairly immaterial”.

Segment strength: High-Touch accelerating; Endless Assortment delivering leverage - High-Touch Solutions: sales +11.9% reported / +11.7% daily constant currency. Operating margin 17.3% (+70 bps YoY). - End-market demand improving; notable strength in manufacturing + government and strong contractor/retail activity tied to data center buildout. - Endless Assortment: sales +13.5% reported / +20.6% daily organic constant currency (normalizes UK exit + FX). - MonotaRO: +24% local days in local constant currency. - Zoro U.S.: +18.4% on a daily basis. - Endless operating margin 11.5% (+160 bps YoY) with margin improvements across the segment.