Maintenance and repair supplier W.W. Grainger (NYSE: GWW) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 4.5% year on year to $4.43 billion. The company expects the full year’s revenue to be around $18.9 billion, close to analysts’ estimates. Its GAAP profit of $9.44 per share was 4.1% below analysts’ consensus estimates.

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"In 2025, we executed well, delivering exceptional service and a best-in-class experience for our customers across both our High-Touch Solutions and Endless Assortment segments," said D.G. Macpherson, Chairman and CEO.

Company Overview

Founded as a supplier of motors, W.W. Grainger (NYSE: GWW) provides maintenance, repair, and operating (MRO) supplies and services to businesses and institutions.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Thankfully, W.W. Grainger’s 8.7% annualized revenue growth over the last five years was decent. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. W.W. Grainger’s recent performance shows its demand has slowed as its annualized revenue growth of 4.3% over the last two years was below its five-year trend.

We can better understand the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, W.W. Grainger’s organic revenue averaged 4.8% year-on-year growth. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results.

This quarter, W.W. Grainger reported modest year-on-year revenue growth of 4.5% but beat Wall Street’s estimates by 0.7%.

Looking ahead, sell-side analysts expect revenue to grow 4.9% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and indicates its newer products and services will not accelerate its top-line performance yet.

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Operating Margin

W.W. Grainger has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 14.4%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Analyzing the trend in its profitability, W.W. Grainger’s operating margin rose by 2 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, W.W. Grainger generated an operating margin profit margin of 14.3%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

W.W. Grainger’s EPS grew at an astounding 22.5% compounded annual growth rate over the last five years, higher than its 8.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into W.W. Grainger’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, W.W. Grainger’s operating margin was flat this quarter but expanded by 2 percentage points over the last five years. On top of that, its share count shrank by 11.2%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For W.W. Grainger, its two-year annual EPS declines of 1.1% mark a reversal from its (seemingly) healthy five-year trend. We hope W.W. Grainger can return to earnings growth in the future.

In Q4, W.W. Grainger reported EPS of $9.44, down from $9.71 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects W.W. Grainger’s full-year EPS of $35.39 to grow 23.5%.

Key Takeaways from W.W. Grainger’s Q4 Results

It was good to see W.W. Grainger narrowly top analysts’ revenue expectations this quarter. We were also happy its EBITDA narrowly outperformed Wall Street’s estimates. On the other hand, its EPS missed and its full-year EPS guidance fell slightly short of Wall Street’s estimates. Overall, this was a softer quarter. The stock remained flat at $1,102 immediately following the results.

Is W.W. Grainger an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).