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© 2025 W.W. Grainger, Inc. Q3 2025 Earnings Call October 31, 2025 NYSE: GWW
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Safe Harbor Statement and Non-GAAP Financial Measures All statements in this communication, other than those relating to historical facts, are “forward-looking statements.” Forward-looking statements can generally be identified by their use of terms such as “anticipate,” “estimate,” “believe,” “expect,” “could,” “forecast,” “may,” “intend,” “plan,” “predict,” “project,” “will,” or “would,” and similar terms and phrases, including references to assumptions. Forward-looking statements are not guarantees of future performance and are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such statements. Forward-looking statements include, but are not limited to, statements about future strategic plans and future financial and operating results. Important factors that could cause actual results to differ materially from those presented or implied in the forward-looking statements include, without limitation: inflation, higher product costs or other expenses, including operational and administrative expenses; a major loss of customers; loss or disruption of sources of supply; changes in customer or product mix; increased competitive pricing pressures; changes in third party practices regarding digital advertising; failure to enter into or sustain contractual arrangements on a satisfactory basis with group purchasing organizations; failure to develop, manage or implement new technology initiatives or business strategies, including with respect to Grainger’s eCommerce platforms and artificial intelligence; failure to adequately protect intellectual property or successfully defend against infringement claims; fluctuations or declines in Grainger’s gross profit margin; Grainger’s responses to market pressures; the outcome of pending and future litigation or governmental or regulatory proceedings, including with respect to wage and hour, anti-bribery and corruption, environmental, regulations related to advertising, marketing and the Internet, consumer protection, pricing (including disaster or emergency declaration pricing statutes), product liability, compliance or safety, trade and export compliance, general commercial disputes, or privacy and cybersecurity matters; investigations, inquiries, audits and changes in laws and regulations; failure to comply with laws, regulations and standards, including new or stricter environmental laws or regulations; government contract matters; the impact of any government shutdown; disruption or breaches of information technology or data security systems involving Grainger or third parties on which Grainger depends; general industry, economic, market or political conditions; general global economic conditions including existing, new, or increased tariffs, trade issues and changes in trade policies, inflation, and interest rates; currency exchange rate fluctuations; market volatility, including price and trading volume volatility or price declines of Grainger’s common stock; commodity price volatility; facilities disruptions or shutdowns; higher fuel costs or disruptions in transportation services; effects of outbreaks of pandemic disease or viral contagions, global conflicts, natural or human induced disasters, extreme weather, and other catastrophes or conditions; effects of climate change; failure to execute on our efforts and programs related to environmental, social and governance matters; competition for, or failure to attract, retain, train, motivate and develop executives and key team members; loss of key members of management or key team members; loss of operational flexibility and potential for work stoppages or slowdowns if team members unionize or join a collective bargaining arrangement; changes in effective tax rates; changes in credit ratings or outlook; Grainger's incurrence of indebtedness or failure to comply with restrictions and obligations under its debt agreements and instruments; and other factors that can be found in our filings with the Securities and Exchange Commission, including our most recent periodic reports filed on Form 10-K and Form 10-Q, which are available on our Investor Relations website. Forward-looking statements are given only as of the date of this communication and we disclaim any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Additional information relating to certain non-GAAP financial measures referred to in this presentation is available in the appendix to this presentation, including: adjusted return on invested capital; adjusted gross profit, adjusted operating earnings, adjusted EBITDA; adjusted SG&A; daily sales; daily, organic daily sales; constant currency sales; daily, organic constant currency sales; constant currency sales in local days; daily, organic constant currency sales in local days; net leverage ratio; and free cash flow. This communication also includes certain non-GAAP forward-looking information (including, but not limited to, slides 11-14 & 23). The Company believes that a quantitative reconciliation of such forward-looking information to the most comparable financial measure calculated and presented in accordance with GAAP cannot be made available without unreasonable efforts. A reconciliation of these non-GAAP financial measures would require the Company to predict the timing and likelihood of future restructurings, asset impairments, and other charges. Neither these forward-looking measures, nor their probable significance, can be quantified with a reasonable degree of accuracy. Accordingly, the most directly comparable forward-looking GAAP measures are not provided. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures. © 2025 W.W. Grainger, Inc. 2
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Opening Remarks © 2025 W.W. Grainger, Inc. Chairman & CEO D.G. Macpherson
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The Grainger Edge® embedded in everything we do We relentlessly expand our leadership position by being the go-to partner for people who build and run safe, sustainable, and productive operations. Our Aspiration Our Purpose Our Principles © 2025 W.W. Grainger, Inc. 4
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Q3 2025 Highlights © 2025 W.W. Grainger, Inc. 5 Note: Results are shown on an adjusted basis. See appendix for a reconciliation of any non-GAAP financial measures. Numbers may not sum due to rounding. (1) Includes only share repurchases and dividends related to Grainger common stock. Continued solid performance amidst muted market demand • Delivered another quarter of steady growth and profitability ─ Generated reported sales growth of 6.1% (5.4% in daily, constant currency) ─ Delivered diluted EPS of $10.21, up 34 cents versus prior year ─ Produced operating cash flow of $597 million • Returned $399 million to shareholders through dividends and share repurchases (1) • Announced plans to divest our U.K.-based Cromwell business • Narrowing FY 2025 earnings outlook Sales $4.1B Operating Margin $4.1B $4.1B (260) bps$4.1B EPS (diluted) ROIC +3.4% +5.4% (daily, constant currency) (40) bps $4.7B 15.2% $10.21 40.3%
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SVP & CFO Dee Merriwether © 2025 W.W. Grainger, Inc. Q3 2025 Results
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Q3 2025 Results: Total Company © 2025 W.W. Grainger, Inc. 7Note: Results are shown on an adjusted basis. See appendix for a reconciliation of any non-GAAP financial measures. Numbers may not sum due to rounding. Sales increased 6.1% (reported and daily) • 5.4% sales growth on a daily, constant currency basis • Generated growth in both segments Gross profit margin decreased 60 bps • Continued pressure in High-Touch from tariff-related impacts, including LIFO inventory valuation headwind • Segment mix drag from Endless Assortment growth • Note: Excluding LIFO headwind, implied FIFO GP% increased year-over-year Operating margin decreased 40 bps • Gross margin unfavorability, partly offset by expense leverage in Endless Assortment Diluted EPS of $10.21, up 3.4% versus prior year ($ in millions) Q3 2025 Q3 2024 % vs. PY Fav/(Unfav) Sales $ 4,657 $ 4,388 6.1% Daily Sales 72.8 68.6 6.1% GP 1,798 1,720 4.5% SG&A 1,091 1,034 (5.5)% Op Earnings $ 707 $ 686 3.1% EPS (diluted) $ 10.21 $ 9.87 3.4% (% of sales) Q3 2025 Q3 2024 bps vs. PY Fav/(Unfav) GP Margin 38.6 % 39.2 % (60) SG&A 23.4 % 23.6 % 20 Op Margin 15.2 % 15.6 % (40) Summary Results Commentary vs. Prior Year
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Q3 2025 Results: High-Touch Solutions - N.A. © 2025 W.W. Grainger, Inc. 8 Sales increased 3.4% (reported and daily) • 3.4% sales growth on a daily, constant currency basis • Price contribution improving as tariff costs are passed Gross profit margin decreased 50 bps • Continued tariff-related inflation causing unfavorable price / cost timing and LIFO inventory valuation headwind • Partially offset by positive mix and freight • Note: Excluding LIFO headwind, implied FIFO GP% increased year-over-year Operating margin decreased 40 bps • Slight SG&A leverage vs prior year ($ in millions) Q3 2025 Q3 2024 % vs. PY Fav/(Unfav) Sales $ 3,635 $ 3,515 3.4% Daily Sales 56.8 54.9 3.4% GP 1,495 1,462 2.3% SG&A 871 845 (3.1)% Op Earnings $ 624 $ 617 1.1% (% of sales) Q3 2025 Q3 2024 bps vs. PY Fav/(Unfav) GP Margin 41.1 % 41.6 % (50) SG&A 23.9 % 24.0 % 10 Op Margin 17.2 % 17.6 % (40) Summary Results Commentary vs. Prior Year Note: Results are consistent on a reported and adjusted basis. See appendix for a reconciliation of any non-GAAP financial measures. Numbers may not sum due to rounding.
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Q3 2025 Results: Endless Assortment Sales increased 18.2%; up 14.6% on a daily, constant currency basis • Zoro growth of 17.8% on a daily basis • MonotaRO growth of 12.6% in local days, local constant currency Gross profit margin increased 60 bps • Continued benefit from strategic pricing actions at Zoro • Favorable mix at MonotaRO Operating margin increased 100 bps • Gross margin flow through and top-line leverage across the segment ($ in millions) Q3 2025 Q3 2024 % vs. PY Fav/(Unfav) Sales $ 935 $ 791 18.2% Daily Sales 14.6 12.4 18.2% GP 281 233 20.6% SG&A 189 163 (16.0)% Op Earnings $ 92 $ 70 31.4% (% of sales) Q3 2025 Q3 2024 bps vs. PY Fav/(Unfav) GP Margin 30.1 % 29.5 % 60 SG&A 20.3 % 20.7 % 40 Op Margin 9.8 % 8.8 % 100 © 2025 W.W. Grainger, Inc. 9 Summary Results Commentary vs. Prior Year Note: Results are shown on an adjusted basis. See appendix for a reconciliation of any non-GAAP financial measures. Numbers may not sum due to rounding.
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Looking Ahead © 2025 W.W. Grainger, Inc. SVP & CFO Dee Merriwether
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Update on tariff actions and path forward © 2025 W.W. Grainger, Inc. 11 7 Took pricing actions over the last two quarters as tariffs went into effect • May actions predominately focused on products directly imported by Grainger • September updates included initial increases on supplier-imported products where cost negotiations were final Continued to engage with suppliers; expecting dialogue to remain ongoing Anticipate annual Total Company GP% run-rate will stabilize at ~39% as tariff landscape normalizes, consistent with our long-term earnings framework • Private label headwind on portion of products where tariffs change competitiveness; continued segment mix headwind • LIFO impact expected to subside by mid-2026(1); price / cost trends back toward neutrality Continuing to navigate tariff landscape Q4’25 YTD c Looking Ahead Completed actions Expected actions Taking additional pricing actions this quarter to offset incremental cost pressure • Actions include refinements to reflect additional tariffs not contemplated in prior guidance (e.g., updates to Section 232) Expect sequential GP% step up on improving price / cost and normal seasonal favorability (anticipating similar LIFO impact as Q3’25) (1) Assumes no material change to current effective tariff rates as of October 30, 2025.
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LIFO Impact: Inventory accounting dynamics having outsized impact on GP%; will normalize as inflationary cycle subsides Inflationary Period © 2025 W.W. Grainger, Inc. 12 … however, as inflation cools ✓ LIFO expense $ decline ✓ LIFO and FIFO GP% converge LIFO impact more pronounced during periods of heightened cost inflation … Note: The Company uses the last-in, first-out (LIFO) method, valued at the lower of cost or market, to account for approximately 79% of total inventory (as of December 31, 2024) and the first-in, first-out (FIFO) method, valued at the lower of cost or net realizable value, for the remaining inventory (1) Year-over-year change in LIFO reserve as a percent of sales. Inflationary Period (-0.3%) 38.3% 2019 (-0.2%) 35.9% 2020 (-0.5%) 36.2% (-1.2%) 38.4% 2022 (-0.5%) 39.4% 2023 (-0.2%) 39.4% 2024 (-0.8%-0.9%) 38.9% - 39.1% 20252021 Total Company reported GP% (LIFO) Implied FIFO GP% $32M $20M $64M $183M $77M $34M ~$140M - $160M Pre-tax LIFO expense $ (GP% impact(1)) (-) Pandemic mix (-) Pandemic product E&O (+) Pandemic mix (-) Pandemic product E&O (+) Pandemic mix (+) Lap of pandemic product E&O (+) Price / Cost positive (-) LIFO headwind (+) Freight and supply chain recovery (+) LIFO recovery (-) Price / Cost negative (-) LIFO headwind (+/-) Minimal change Material YoY GP% Impacts … and as we pass further price ✓ Expect annual Total Company GP% run-rate will stabilize at ~39%
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Note: Guidance provided on an adjusted basis. The Company does not reconcile forward-looking non-GAAP financial measures. Assumes corporate effective tax rate of ~23.8% and JPY / USD FX rate of 149. Expect 2025 net interest/other net expense headwind of ~$20 million driving ~$0.30 Y/Y EPS impa ct. Normalization of effective tax rate to ~23.8% driving ~110bps Y/Y headwind to 2025 EPS growth rate. Prior FY ’25 guidance as provided on August 1, 2025. (1) Based on U.S. selling days. There are 255 and 256 selling days in 2025 and 2024, respectively. See appendix for a reconciliat ion of any non-GAAP financial measures. Sales ($ billions) $17.2 $17.8 – $18.0 Prior FY’25 Guidance $17.9 – $18.2 Gross Profit Margin 39.4% 38.9% – 39.1% Prior FY’25 Guidance 38.6% – 38.9% Adj. Operating Margin 15.5% 15.0% – 15.2% Prior FY’25 Guidance 14.7% – 15.1% Adj. EPS (diluted) $38.96 $39.00 – $39.75 Prior FY’25 Guidance $38.50 – $40.25 2024A 2025 Guidance (as of Oct 31, 2025) (40) bps to (25) bps (45) bps to (30) bps 0.1% to 2.0% Y/Y change 3.9% to 4.7% (4.4% to 5.1% daily, organic constant currency sales(1)) Narrowing 2025 Earnings Outlook 2025 Full Year Guidance: Total Company © 2025 W.W. Grainger, Inc. 13 Tariff Considerations: • Includes continued LIFO headwind but improving price / cost in Q4’25 • Reflects anticipated Q4’25 pricing actions • Assumes no change to current effective tariff rates as of 10/30 Note: • Assumes Cromwell divestiture completed by mid-Q4’25
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Long-term earnings framework remains intact Strong top-line growth Generally stable gross profit margins Grow SG&A slower than sales Double-digit Adj. EPS CAGR Strong dividend track record + Attractive total return potential © 2025 W.W. Grainger, Inc. 14 (1) Volume outgrowth is measured as High-Touch Solutions - U.S. daily, organic sales growth excluding price/customer mix contribution, less estimated U.S. MRO market volume. (2) At Total Company level. (3) Assumes normal market conditions including U.S. MRO market volume CAGR of +1.0 - 2.0% and approximately +1.0% of annual price inflation. Corporate tax rate assumed at ~24%. (4) Normalizing to ~1.5 - 2.0% of sales thereafter. (2)(3) • Targeting 400 - 500bps of annual volume outgrowth(1) in HTS-U.S. • EA revenue CAGR to grow in the teens • Anticipate productivity initiatives will offset continued demand generation investmentExpect segment mix headwinds as EA grows faster than HTS-N.A. Focused execution (2) Significant shareholder value creation Robust cash flow generation supporting capital priorities • Expect operating cash conversation around ~100% of net earnings • Anticipate CapEx to remain elevated at ~$600 million average per year through 2028 (4) • Executing consistent approach to capital allocation, including HSD-LDD% annual dividend growth target BEYOND 2025 Stability around ~39% for Total Company
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Closing Remarks © 2025 W.W. Grainger, Inc. Chairman & CEO D.G. Macpherson
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Q&A © 2025 W.W. Grainger, Inc.
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Appendix © 2025 W.W. Grainger, Inc.
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Q3 2025 Segment Highlights: High-Touch Solutions - N.A. © 2025 W.W. Grainger, Inc. 18 HTS - U.S. ($ millions) Appendix $152 $159 Q3’24 Q3’25 +4.8% Daily 35.5% 34.6% Q3’24 Q3’25 -90 bps Daily, constant currency sales in local days: +5.9% $3,290 $3,404 Q3’24 Q3’25 +3.5% Daily 41.9% 41.4% Q3’24 Q3’25 -50 bps ($ millions) HTS - Canada Sales SalesGross Profit Gross Profit Note: Results are consistent on a reported and adjusted basis. See appendix for a reconciliation of any non-GAAP financial measures. Numbers may not sum due to rounding.
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© 2025 W.W. Grainger, Inc. 19 ($ millions) $311 $367 Q3’24 Q3’25 +17.8% Daily Sales $471 $558 Q3’24 Q3’25 +18.4% Daily Sales Daily, constant currency sales in local days: +12.6% ($ millions) Note: Results are consistent on a reported and adjusted basis. See appendix for a reconciliation of any non-GAAP financial measures. Numbers may not sum due to rounding. (1) The Company has a controlling ownership interest in MonotaRO, which is part of our Endless Assortment segment. MonotaRO’s results are fully consolidated, reflected in U.S. GAAP, and reported one-month in arrears. Results will differ from MonotaRO’s externally reported financials, which follow Japanese GAAP. 37.7% 41.4% Q1’21 Q1’22 +380 bps Gross ProfitGross Profit Gross Profit 12.4% 13.2% Q3’24 Q3’25 +80 bps Op. Margin 32.6% 33.3% Q3’24 Q3’25 +70 bps Op. Margin MonotaRO(1) Zoro - U.S. 27.6% 28.1% Q3’24 Q3’25 +50 bps 4.3% 5.8% Q3’24 Q3’25 +150 bps Q3 2025 Segment Highlights: Endless Assortment
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Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 2% 1% 4% 4% 7% Note: See appendix for a reconciliation of any non-GAAP financial measures. (1) Large Customer revenue of $10.8 billion and Mid-sized Customer revenue of $1.8 billion for the last twelve-month (LTM) period ending September 30, 2025. These numbers exclude specialty brands and certain revenue recognition adjustments which are included in the HTS - U.S. business. Growth rates are presented on a daily basis and rounded to the nearest whole percentage. Q3 2025 Sales Performance: High-Touch Solutions - U.S. © 2025 W.W. Grainger, Inc. 20 Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 2% 3% 2% 2% 3% Large Customers (1) Mid-sized Customers (1) Note: FY’24 Large Customer daily sales growth was +2.8% Note: FY’24 Mid-size Customer daily sales growth was +3.2%
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Q3’25(1) Commercial Services UP Mid-Single Digits Contractors UP Low-Double Digits Government UP Low-Single Digits Healthcare UP Mid-Single Digits Manufacturing UP Low-Single Digits Retail UP Low-Single Digits Transportation UP Mid-Single Digits Utilities UP Mid-Single Digits Warehousing DOWN Mid-Teens Wholesale UP Low-Single Digits Other(2) UP Low-Double Digits 5 Quarter Trend Sales Growth By Customer End Market: HTS - U.S. 21 Note: See appendix for a reconciliation of any non-GAAP financial measures. Customer end market definitions primarily follow the North American Industry Classification System (NAICS). Numbers exclude specialty brands and certain revenue recognition adjustments which are included in the HTS - U.S. business. (1) Growth rates are presented on a daily basis in current customer end market alignment. (2) Includes industries that are not material individually, including hospitality, restaurants, property management and natural resources. © 2025 W.W. Grainger, Inc.
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Operating Metrics: Endless Assortment © 2025 W.W. Grainger, Inc. 22 (user count in thousands) 14.3 14.6 14.9 13.8 12.8 Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 -10% Note: Numbers may not tie due to rounding. Registered user count excludes non-strategic accounts and channels. (1) MonotaRO’s results are reported one-month in arrears. (SKU count in millions) Total Registered Users Total Active SKUs (Zoro U.S.) 9,797 5,617 Q3’24 10,093 5,736 Q4’24 10,351 5,868 Q1’25 10,627 6,000 Q2’25 10,893 6,139 Q3’25 15,415 15,829 16,219 16,628 17,032 +10% MonotaRO (1) Zoro - U.S. Near-term SKU reduction reflects optimization efforts to further improve the customer experience at Zoro
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Appendix © 2025 W.W. Grainger, Inc. 23 2025 Full Year Supplemental Guidance Note: Guidance provided on an adjusted basis. Assumes corporate effective tax rate of ~23.8% and JPY / USD FX rate of 149. See appendix for a reconciliation of any non-GAAP financial measures. Numbers may not sum due to rounding. Prior FY ’25 guidance as provided on August 1, 2025. (1) Capital expenditures as reflected in the Statement of Cash Flows. (2) Includes only share repurchases related to Grainger common stock. (3) Based on U.S. selling days: 255 and 256 selling days in 2025 and 2024, respectively. (4) Excludes the impact of year-over-year foreign currency exchange rate fluctuations. (5) Excludes the net sales of Cromwell and Zoro U.K. in the comparable prior year period post the estimated date of divestiture or closure. Sales Growth Guidance Total Company 2025 Guidance (as of October 31, 2025) Low High Daily, Organic Constant Currency Sales 4.4% 5.1% Daily Impact(3) -0.4% -0.4% Foreign Currency Exchange(4) 0.1% 0.1% Business Divestiture/Closure(5) -0.2% -0.1% Reported Sales 3.9% 4.7% Cash Flow Guidance ($ millions) 2024A 2025 Guidance (as of October 31, 2025) Operating Cash Flow $2,111 $2,100 – $2,200 Prior FY’25 Guidance $2,050 - $2,250 Capital Expenditures(1) $541 $625 – $675 Prior FY’25 Guidance $550 - $650 Share Repurchases(2) $1,201 $1,050 – $1,150 Prior FY’25 Guidance Unchanged Operating Margin (Adjusted) ($ millions) 2024A 2025 Guidance (as of October 31, 2025) HTS – N.A 17.5% 16.9% – 17.0% Prior FY’25 Guidance 16.5% – 16.9% Endless Assortment 8.3% 9.2% – 9.5% Prior FY’25 Guidance 9.2% – 9.6% Total Company 15.5% 15.0% – 15.2% Prior FY’25 Guidance 14.7% - 15.1%
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Definitions & Calculations © 2025 W.W. Grainger, Inc. 24 Basis of presentation: The Company has a controlling ownership interest in MonotaRO, which is part of our Endless Assortment segment. MonotaRO’s results are fully consolidated, reflected in U.S. GAAP, and reported one-month in arrears. Results will differ from MonotaRO’s externally reported financials which follow Japanese GAAP. Non-GAAP financial measures: The Company believes these non-GAAP financial measures provide meaningful information to assist investors in understanding financial results and assessing future performance as they provide a better baseline for analyzing the ongoing performance of its business by excluding items that may not be indicative of core operating results. “Adjusted gross profit", "adjusted SG&A", "adjusted operating earnings", “adjusted EBITDA”, "adjusted net earnings", "adjuste d EPS (diluted)”— exclude certain non-recurring items, like restructuring charges, asset impairments, gains and losses associated with business divestitures and other non-recurring, infrequent or unusual gains and losses (together referred to as “non-GAAP adjustments”), from the Company’s most directly comparable reported U.S. GAAP figures (reported gross profit, SG&A, operating earnings, net earnings and EPS). The Company believes these non-GAAP adjustments provide meaningful information to assist investors in understanding financial results and assessing future performance as they provide a better baseline for analyzing the ongoing performance of its business by excluding items that may not be indicative of core operating results. "Adjusted return on invested capital" (ROIC) — is calculated using the Company's annualized adjusted operating earnings (defined above) divided by average net working assets for the period. Average net working assets is calculated using a two-point average for Q1, a three-point average for Q2, a four-point average for Q3 and a five-point average for Q4. Net working assets are working assets minus working liabilities and defined as follows: working assets equal total assets less cash and cash equivalents, deferred and prepaid income taxes and operating & finance lease right-of-use assets plus any LIFO reserves. Working liabilities are the sum of trade payables, accrued compensation and benefits, accrued contributions to employees’ retirement savings plans and accrued expenses less current operating & finance lease liabilities. The Company believes the presentation of adjusted ROIC provides useful information regarding how effectively the Company is using capital to generate financial returns. "Free cash flow" (FCF) — is calculated using total cash provided by operating activities less capital expenditures. The Company believes the presentation of FCF allows investors to evaluate the capacity of the Company's operations to generate free cash flow. "Net leverage ratio" — is calculated by dividing the Company’s net debt (total debt outstanding less debt issuance costs less cash and cash equivalents) by adjusted EBITDA. Adjusted EBITDA is defined as EBITDA less the Company's non-GAAP adjustments for the last twelve months. The Company believes the presentation of its net debt to adjusted EBITDA ratio provides useful information regarding the Company's liquidity and leverage. “Daily sales” — refers to net sales for the period divided by the number of U.S. selling days for the period. “Daily, constant currency sales” — refers to the daily sales adjusted for changes in foreign currency exchange rates. “Daily, constant currency sales in local days” — refers to daily sales adjusted for changes in foreign currency exchange rates and local selling days for the business unit. “Daily, organic sales” — refers to daily sales excluding the net sales of certain divested or closed businesses in the comparable prior year period post date of divestiture or closure. “Daily, organic constant currency sales” — refers to daily sales excluding the sales of certain divested or closed businesses in the comparable prior year period post date of divestiture or closure and changes in foreign currency exchange rates. “Daily, organic constant currency sales in local days” — refers to daily sales excluding the net sales of certain divested or closed businesses in the comparable prior year period post date of divestiture or closure, changes in foreign currency exchange rates and local selling days for the business unit. “Foreign currency exchange” — impact is calculated by dividing current period local currency daily sales by current period average exchange rate and subtracting the current period local currency daily sales divided by the prior period average exchange rate. “Volume outgrowth” — measured as High-Touch Solutions - U.S. daily, organic sales growth excluding price/customer mix contribution, less the estimated U.S. MRO market volume which uses IP - NAICS Manufacturing sub-index as its primary input. U.S. selling days: 2024: Q1-64, Q2-64, Q3-64, Q4-64, FY-256 2025: Q1-63, Q2-64, Q3-64, Q4-64, FY-255 2026: Q1-63, Q2-64, Q3-64, Q4-64, FY-255
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Endless Assortment (EA) - Daily Sales EA Zoro - U.S. MonotaRO Q3'25 Q3'25 Q3'25 Reported sales 18.2% 17.8% 18.4% Daily impact —% —% —% Daily sales(1) 18.2% 17.8% 18.4% Foreign currency exchange(2) (3.6)% —% (5.9)% Daily, constant currency sales 14.6% 17.8% 12.5% Impact of local days 0.1% Daily, constant currency in local days 12.6% Total Company - Monthly Detail July August September Q3'25 Reported sales 7.6% 1.7% 9.4% 6.1% Daily impact —% 4.9% (5.2)% —% Daily sales(1) 7.6% 6.6% 4.2% 6.1% Foreign currency exchange(2) (1.1)% (1.0)% 0.1% (0.7)% Daily, constant currency sales 6.5% 5.6% 4.3% 5.4% GAAP to Non-GAAP Reconciliations Sales growth for the three months ended September 30, 2025 (percent change compared to the prior year period) (unaudited) Note: For more information on the Company's use of non-GAAP measures in this presentation, please see the appendix Definitions and Calculations. (1) Based on U.S. selling days, there were 64 selling days in Q3 2025 and Q3 2024. (2) Excludes the impact on total sales due to year-over-year foreign currency exchange rate fluctuations. © 2025 W.W. Grainger, Inc. 25 High-Touch Solutions - N.A. - Daily Sales HTS - N.A. HTS - U.S. HTS - Canada Q3'25 Q3'25 Q3'25 Reported sales 3.4% 3.5% 4.8% Daily impact —% —% —% Daily sales(1) 3.4% 3.5% 4.8% Foreign currency exchange(2) —% —% 1.0% Daily, constant currency sales 3.4% 3.5% 5.8% Impact of local days 0.1% Daily, constant currency in local days 5.9% High-Touch Solutions - N.A. - Daily Sales Drivers HTS - N.A. HTS - U.S. HTS - Canada Q3'25 Q3'25 Q3'25 Volume/product mix 2.3% 2.3% 5.0% Price/customer mix 1.1% 1.2% 0.8% Foreign currency exchange(2) —% —% (1.0)% Daily sales(1) 3.4% 3.5% 4.8%
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GAAP to Non-GAAP Reconciliations Income statement adjustments for the three months ended September30, 2025 and September 30, 2024 (in millions, except for percentage data) (unaudited) Note: For more information on the Company's use of non-GAAP measures in this presentation, please see the appendix Definitions and Calculations. (1) Reflects the asset impairment loss and other expenses recorded in the third quarter of 2025 related to the Company’s intention to exit the U.K. market, including the planned divestiture of the Cromwell business, which was held for sale as of September 30, 2025. There were no non-GAAP adjustments for the three months ended September 30, 2024. (2) Calculated on the basis of reported net sales for the third quarter of 2025 and 2024. (3) Grainger's businesses reported in Other do not meet the criteria of a reportable segment. (4) The reported effective tax rates for Q3 2025 and Q3 2024 were 34.7% and 24.8%, respectively. The adjusted tax rate was 24 .8% for the three months ended September 30, 2025 and 2024. (5) The Company has a controlling ownership interest in MonotaRO, with the residual representing noncontrolling interest. © 2025 W.W. Grainger, Inc. 26 Total Company results included adjusting items which impacted U.S. GAAP as follows: Q3 2025 Reported Adjusted(2) Q3 2024 Reported Adjusted(2) Reported Adjustment(1) Adjusted % of Net Sales Reported Adjustment(1) Adjusted % of Net Sales Selling, general and administrative expenses High-Touch Solutions N.A. $ 871 $ — $ 871 23.9 % 23.9 % $ 845 $ — $ 845 24.0 % 24.0 % Endless Assortment 199 (10) 189 21.3 % 20.3 % 163 — 163 20.7 % 20.7 % Other(3) 217 (186) 31 249.4 % 35.6 % 26 — 26 31.7 % 31.7 % Selling, general and administrative expenses $ 1,287 $ (196) $ 1,091 27.6 % 23.4 % $ 1,034 $ — $ 1,034 23.6 % 23.6 % Earnings High-Touch Solutions N.A. $ 624 $ — $ 624 17.2 % 17.2 % $ 617 $ — $ 617 17.6 % 17.6 % Endless Assortment 82 10 92 8.8 % 9.8 % 70 — 70 8.8 % 8.8 % Other(3) (195) 186 (9) (224.1)% (10.3)% (1) — (1) (1.2)% (1.2)% Operating earnings 511 196 707 11.0 % 15.2 % 686 — 686 15.6 % 15.6 % Total other expense - net (19) — (19) 0.4 % 0.4 % (15) — (15) 0.3 % 0.3 % Earnings before income taxes 492 196 688 10.6 % 14.8 % 671 — 671 15.3 % 15.3 % Income tax provision(4) (171) — (171) 3.7 % 3.7 % (166) — (166) 3.8 % 3.8 % Net earnings 321 196 517 6.9 % 11.1 % 505 — 505 11.5 % 11.5 % Noncontrolling interest(5) (27) — (27) 0.6 % 0.6 % (19) — (19) 0.4 % 0.4 % Net earnings attributable to W.W. Grainger, Inc. $ 294 $ 196 $ 490 6.3 % 10.5 % $ 486 $ — $ 486 11.1 % 11.1 % Diluted earnings per share $ 6.12 $ 4.09 $ 10.21 $ 9.87 $ — $ 9.87
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Note: For more information on the Company's use of non-GAAP measures in this presentation, please see the appendix Definitions and Calculations. (1) Last twelve months. (2) Reflects the asset impairment loss and other expenses recorded in the third quarter of 2025 related to the Company's intention to exit the U.K. market, including the planned divestiture of the Cromwell business, which was held for sale as of September 30, 2025. (3) Adjusted ROIC is calculated using the Company's annualized adjusted operating earnings. Annualized adjusted operating earnings are calculated by multiplying the YTD average daily operating earnings based off U.S. selling days by the total U.S. selling days in the full year period. In Q4 2024, working assets excluded cash equivalents as part of the net working assets calculation. As of Q1 2025, working assets excludes cash and cash equivalents. (4) Includes deferred and prepaid income taxes and operating & finance lease right-of-use assets. (5) Reflects restructuring costs incurred in the second quarter of 2024 of $15M and $1M in Grainger's HTS-N.A. segment and Other businesses, respectively. Net Leverage Ratio As of September 30, 2025 Total debt $ 2,369 Debt issuance costs — net of amortization 21 Cash and cash equivalents (535) Net debt $ 1,855 LTM(1) ended September 30, 2025 Net earnings $ 1,826 Other expense — net 62 Income tax provision 606 Depreciation and amortization 252 EBITDA $ 2,746 Net leverage ratio 0.7x Free Cash Flow (FCF) Three months ended September 30, 2025 Net cash flows provided by operating activities $ 597 Capital expenditures (258) Free cash flow $ 339 GAAP to Non-GAAP Reconciliations Key metrics for the period ended September 30, 2025 and Operating margin for the twelve months ended December 31, 2024 (in millions, except for percentage data) (unaudited) Operating Margin FY 2024 HTS-N.A. EA Total Company Reported % 17.4 % 8.3 % 15.4 % Restructuring(5) 0.1 % — 0.1 % Adjusted % 17.5 % 8.3 % 15.5 % © 2025 W.W. Grainger, Inc. 27 Adjusted Return on Invested Capital (ROIC) Nine months ended September 30, 2025 Reported operating earnings $ 1,861 Adjustment(2) 196 Adjusted operating earnings $ 2,057 Annualized adjusted operating earnings(3) $ 2,747 Q3'25 Q2'25 Q1'25 Q4'24 Total assets 9,033 8,937 8,658 8,829 Cash and cash equivalents(3) (535) (597) (666) (731) LIFO reserve 901 849 814 804 Other asset adjustments(4) (447) (475) (441) (400) Working liabilities (1,881) (1,873) (1,793) (1,738) Net working assets $ 7,071 $ 6,841 $ 6,572 $ 6,764 Average net working assets $ 6,812 Adjusted ROIC(3) 40.3 %
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Kyle Bland Vice President, Investor Relations Kevin Byrne Director, Investor Relations Emily Boelter Manager, Investor Relations InvestorRelations@grainger.com IR Contacts © 2025 W.W. Grainger, Inc.