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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
 
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2026
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to _______
 Commission file number 1-5684

W.W. Grainger, Inc.
(Exact name of registrant as specified in its charter)
Illinois36-1150280
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
100 Grainger Parkway
Lake Forest,Illinois60045-5201
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (847) 535-1000             
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common StockGWWNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒  No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ☒  Accelerated Filer ☐   Non-accelerated Filer ☐   Smaller Reporting Company ☐ Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐  No ☒ 

There were 46,814,148 shares of the Company’s Common Stock outstanding as of October 28, 2026.
1

TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
Item 1:Financial Statements (Unaudited)
Condensed Consolidated Statements of Earnings 
    for the Three and Nine Months Ended September 30, 2026 and 2025
Condensed Consolidated Statements of Comprehensive Earnings 
    for the Three and Nine Months Ended September 30, 2026 and 2025
Condensed Consolidated Balance Sheets
    as of September 30, 2026 and December 31, 2025
Condensed Consolidated Statements of Cash Flows
    for the Nine Months Ended September 30, 2026 and 2025
Condensed Consolidated Statements of Shareholders' Equity
    for the Three and Nine Months Ended September 30, 2026 and 2025
Notes to Condensed Consolidated Financial Statements
Item 2:Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3:Quantitative and Qualitative Disclosures About Market Risk
Item 4:Controls and Procedures
PART II - OTHER INFORMATION

Item 1:Legal Proceedings
Item 1A:Risk Factors
Item 2:Unregistered Sales of Equity Securities and Use of Proceeds
Item 5:Other Information
Item 6:Exhibits
Signatures

2

PART I – FINANCIAL INFORMATION

Item 1: Financial Statements

W.W. Grainger, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In millions of dollars and shares, except for per share amounts)
(Unaudited)
Three Months EndedNine Months Ended
September 30,September 30,
2026202520262025
Net sales$5,181 $4,657 $14,944 $13,517 
Cost of goods sold3,170 2,859 9,053 8,254 
Gross profit2,011 1,798 5,891 5,263 
Selling, general and administrative expenses1,183 1,287 3,463 3,402 
Operating earnings828 511 2,428 1,861 
Other expense (income):
Interest expense – net21 20 62 61 
Other – net(7)(1)(21)(10)
Total other expense – net14 19 41 51 
Earnings before income taxes
814 492 2,387 1,810 
Income tax provision198 171 590 481 
Net earnings616 321 1,797 1,329 
Less net earnings attributable to noncontrolling interest29 27 85 74 
Net earnings attributable to W.W. Grainger, Inc.$587 $294 $1,712 $1,255 
Earnings per share:
Basic$12.43 $6.13 $36.12 $26.02 
Diluted$12.42 $6.12 $36.08 $25.97 
Weighted average number of shares outstanding:
Basic47.0 47.8 47.2 48.0 
Diluted47.1 47.9 47.2 48.1 
 
The accompanying notes are an integral part of these financial statements.
3

W.W. Grainger, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In millions of dollars)
(Unaudited)
Three Months EndedNine Months Ended
September 30,September 30,
2026202520262025
Net earnings$616 $321 $1,797 $1,329 
Other comprehensive earnings (losses):
Foreign currency translation adjustments 21 (28)(21)85 
Postretirement benefit plan losses – net of tax benefit of $1, $1, $3, and $3, respectively
(3)(3)(8)(9)
Total other comprehensive earnings (losses)18 (31)(29)76 
Comprehensive earnings – net of tax634 290 1,768 1,405 
Less comprehensive earnings (losses) attributable to noncontrolling interest
Net earnings29 27 85 74 
Foreign currency translation adjustments14 (11)— 21 
Total comprehensive earnings (losses) attributable to noncontrolling interest43 16 85 95 
Comprehensive earnings attributable to W.W. Grainger, Inc.
$591 $274 $1,683 $1,310 

The accompanying notes are an integral part of these financial statements.
4

W.W. Grainger, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions of dollars, except for share and per share amounts)
As of
Assets
(Unaudited) September 30, 2026
December 31, 2025
Current assets
Cash and cash equivalents$768 $585 
Accounts receivable (less allowance for credit losses of $31 and $32, respectively)
2,877 2,329 
Inventories – net2,303 2,394 
Prepaid expenses and other current assets255 176 
Total current assets6,203 5,484 
Property, buildings and equipment – net2,488 2,268 
Goodwill521 360 
Intangibles – net327 265 
Operating lease right-of-use354 345 
Other assets235 240 
Total assets$10,128 $8,962 
Liabilities and shareholders' equity
Current liabilities
Current maturities$227 $126 
Trade accounts payable1,184 963 
Accrued compensation and benefits412 343 
Operating lease liability73 73 
Accrued expenses447 386 
Income taxes payable33 49 
Total current liabilities2,376 1,940 
Long-term debt2,458 2,362 
Long-term operating lease liability310 301 
Deferred income taxes and tax uncertainties151 121 
Other non-current liabilities95 97 
Shareholders' equity
Cumulative preferred stock – $5 par value – 12,000,000 shares authorized; none issued or outstanding
— — 
Common Stock – $0.50 par value – 300,000,000 shares authorized; 109,659,219 shares issued
55 55 
Additional contributed capital1,466 1,446 
Retained earnings16,327 14,958 
Accumulated other comprehensive losses(194)(165)
Treasury stock, at cost – 62,772,354 and 62,240,438
shares, respectively
(13,313)(12,558)
Total W.W. Grainger, Inc. shareholders’ equity4,341 3,736 
Noncontrolling interest397 405 
Total shareholders' equity4,738 4,141 
Total liabilities and shareholders' equity$10,128 $8,962 
  
The accompanying notes are an integral part of these financial statements.
5

W.W. Grainger, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of dollars)
(Unaudited)
Nine Months Ended
September 30,
20262025
Cash flows from operating activities:
Net earnings$1,797 $1,329 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Provision for credit losses19 20 
Deferred income taxes and tax uncertainties 33 37 
Depreciation and amortization195 190 
Non-cash lease expense59 62 
Impairment loss and net losses from business divestitures— 196 
Stock-based compensation58 49 
Change in operating assets and liabilities:
Accounts receivable(557)(252)
Inventories86 (27)
Prepaid expenses and other assets(72)(32)
Trade accounts payable174 185 
Operating lease liabilities(72)(79)
Accrued liabilities148 4 
Income taxes – net(20)(42)
Other non-current liabilities(4)(20)
Net cash provided by operating activities1,844 1,620 
Cash flows from investing activities:
Capital expenditures(396)(558)
Proceeds from sale of assets— 4 
Cash paid for business acquisition(215)— 
Other – net(17)11 
Net cash used in investing activities(628)(543)
Cash flows from financing activities:
Short-term borrowings (repayments), original maturities of 90 days or less, net100 — 
Proceeds from debt102 90 
Payments of debt(7)(503)
Proceeds from stock options exercised9 2 
Payments for employee taxes withheld from stock awards(32)(31)
Purchases of treasury stock(739)(798)
Purchases of noncontrolling interests(71)— 
Cash dividends paid(398)(358)
Other – net9 (1)
Net cash used in financing activities(1,027)(1,599)
Exchange rate effect on cash and cash equivalents(6)21 
Net change in cash and cash equivalents183 (501)
Cash and cash equivalents at beginning of year585 1,036 
Cash and cash equivalents at end of period$768 $535 
The accompanying notes are an integral part of these financial statements.
6

W.W. Grainger, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In millions of dollars, except for per share amounts)
(Unaudited)

Common StockAdditional Contributed CapitalRetained EarningsAccumulated Other Comprehensive Earnings (Losses)Treasury StockNoncontrolling
Interest		Total
Balance at January 1, 2025
$55 $1,399 $13,677 $(274)$(11,499)$345 $3,703 
Stock-based compensation— 10 — — 1 — 11 
Purchases of treasury stock— — — — (288)— (288)
Net earnings— — 479 — — 21 500 
Other comprehensive earnings (losses)— — — 19 — 17 36 
Cash dividends paid ($2.05 per share)
— — (99)— — (16)(115)
Balance at March 31, 2025
$55 $1,409 $14,057 $(255)$(11,786)$367 $3,847 
Stock-based compensation— 6 — — (11)1 (4)
Purchases of treasury stock— — — — (228)— (228)
Net earnings— — 482 — — 26 508 
Other comprehensive earnings (losses)— — — 56 — 15 71 
Capital contribution— (1)— — — — (1)
Cash dividends paid ($2.26 per share)
— — (110)— — — (110)
Balance at June 30, 2025
$55 $1,414 $14,429 $(199)$(12,025)$409 $4,083 
Stock-based compensation— 14 — — — (1)13 
Purchases of treasury stock— — — — (293)— (293)
Net earnings— — 294 — — 27 321 
Other comprehensive earnings (losses)— — — (20)— (11)(31)
Capital contribution— — — — — 1 1 
Cash dividends paid ($2.26 per share)
— — (108)— — (25)(133)
Balance at September 30, 2025
$55 $1,428 $14,615 $(219)$(12,318)$400 $3,961 

The accompanying notes are an integral part of these financial statements.

7

W.W. Grainger, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In millions of dollars, except for per share amounts)
(Unaudited)


Common StockAdditional Contributed CapitalRetained EarningsAccumulated Other Comprehensive Earnings (Losses)Treasury StockNoncontrolling
Interest		Total
Balance at January 1, 2026
$55 $1,446 $14,958 $(165)$(12,558)$405 $4,141 
Stock-based compensation— 14 — — 1 — 15 
Purchases of treasury stock— — — — (240)— (240)
Transactions with noncontrolling interests, net— (12)— — — (13)(25)
Net earnings— — 555 — — 26 581 
Other comprehensive earnings (losses)— — — (16)— (5)(21)
Cash dividends paid ($2.26 per share)
— — (108)— — — (108)
Balance at March 31, 2026
$55 $1,448 $15,405 $(181)$(12,797)$413 $4,343 
Stock-based compensation— 11 — — (9)— 2 
Purchases of treasury stock— — — — (226)— (226)
Transactions with noncontrolling interests, net— (11)— — — (24)(35)
Net earnings— — 570 — — 30 600 
Other comprehensive earnings (losses)— — — (17)— (9)(26)
Cash dividends paid ($2.49 per share)
— — (117)— — (28)(145)
Balance at June 30, 2026
$55 $1,448 $15,858 $(198)$(13,032)$382 $4,513 
Stock-based compensation— 18 — — — — 18 
Purchases of treasury stock— — — — (281)— (281)
Transactions with noncontrolling interests, net— — — — — (1)(1)
Net earnings— — 587 — — 29 616 
Other comprehensive earnings (losses)— — — 4 — 14 18 
Cash dividends paid ($2.49 per share)
— — (118)— — (27)(145)
Balance at September 30, 2026
$55 $1,466 $16,327 $(194)$(13,313)$397 $4,738 

The accompanying notes are an integral part of these financial statements.
8
W.W. Grainger, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
W.W. Grainger, Inc. is a broad line distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America (N.A.) and Japan. In the fourth quarter of 2025, Grainger exited the United Kingdom (U.K.) market by completing the sale of the Cromwell business and closing the Zoro U.K. business. In this report, the words “Grainger” or “Company” mean W.W. Grainger, Inc. and its subsidiaries, except where the context makes it clear that the reference is only to W.W. Grainger, Inc. itself and not its subsidiaries.

Basis of Presentation
The Company's Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting and the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and therefore do not include all information and disclosures normally included in the annual Consolidated Financial Statements. The preparation of these Condensed Consolidated Financial Statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from these estimated amounts. In the opinion of the Company’s management, the Condensed Consolidated Financial Statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation.

The Condensed Consolidated Balance Sheet at December 31, 2025, has been derived from the audited Consolidated Financial Statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 19, 2026 (2025 Form 10-K).

There were no material changes to the Company’s significant accounting policies from those disclosed in Note 1 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data in the Company's 2025 Form 10-K.

NOTE 2 - ACQUISITIONS
On August 26, 2026, the Company acquired technology, intellectual property, and talent assets from Adroit Worldwide Media, Inc. for a purchase price of $215 million, which was comprised of $210 million of cash paid at closing and a $5 million payment made prior to the closing. The acquisition has been accounted for as a business combination under ASC 805 and is expected to enhance the Company's inventory management capabilities within its High-Touch Solutions N.A. segment by adding differentiated frictionless technology for industrial business-to-business distribution. Based on the preliminary purchase price allocation, intangible assets of $49 million and goodwill of $166 million, which is expected to be deducted for tax purposes, have been recorded; however, the purchase price allocation has not been finalized and is subject to change as the Company obtains additional information during the measurement period related to the valuation of the acquired assets. Due to the immaterial nature of the transaction, disclosure of pro forma results was not considered necessary.
9
W.W. Grainger, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
NOTE 3 - REVENUE
Grainger serves a large number of customers in diverse industries, which are subject to different economic and market-specific factors. The Company's revenue is primarily comprised of MRO product sales and related activities.

The Company's presentation of revenue by reportable segment and customer industry most reasonably depicts how the nature, amount, timing and uncertainty of the Company's revenue and cash flows are affected by economic and market-specific factors. The majority of Company revenue originates from contracts with a single performance obligation to deliver products, whereby performance obligations are satisfied when control of the product is transferred to the customer per the arranged shipping terms.

The following tables present the Company's percentage of revenue by reportable segment and customer industry:

Three Months Ended September 30,
2026
2025
Customer Industry(1)
High-Touch Solutions N.A.Endless AssortmentTotal CompanyHigh-Touch Solutions N.A.Endless Assortment
Total Company(2)
Manufacturing30 %30 %30 %30 %30 %30 %
Government19 %3 %16 %20 %3 %16 %
Wholesale7 %16 %9 %7 %18 %9 %
Commercial Services7 %14 %8 %7 %12 %8 %
Contractors6 %12 %7 %6 %12 %7 %
Healthcare7 %2 %6 %7 %1 %6 %
Retail4 %4 %4 %4 %4 %4 %
Transportation4 %2 %4 %4 %2 %4 %
Utilities3 %2 %3 %3 %2 %3 %
Warehousing2 %— %2 %2 %— %2 %
Other(3)
11 %15 %11 %10 %16 %11 %
Total net sales100 %100 %100 %100 %100 %100 %
Percent of total company revenue80 %20 %100 %78 %20 %100 %
(1)Customer industry results for the three months ended September 30, 2026 and 2025 primarily use the North American Industry Classification System (NAICS). As customers' businesses evolve, industry classifications may change. When these changes occur, Grainger does not recast the customer classification for prior periods as the industry used in the prior period was appropriate at the point-in-time. As a result, year-over-year changes may be impacted.
(2)Total Company includes other businesses, which included the Cromwell business through the date of divestiture in the fourth quarter of 2025. For further details on the sale, see Note 2 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data in the Company's 2025 Form 10-K. Other businesses accounted for approximately 2% of Total Company revenue for the three months ended September 30, 2025.
(3)Other primarily includes revenue from industries and customers that are not material individually, including hospitality, restaurants, property management and natural resources.

10
W.W. Grainger, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Nine Months Ended September 30,
2026
2025
Customer Industry(1)
High-Touch Solutions N.A.Endless AssortmentTotal CompanyHigh-Touch Solutions N.A.Endless Assortment
Total Company(2)
Manufacturing30 %30 %30 %30 %30 %30 %
Government19 %3 %15 %19 %3 %16 %
Wholesale7 %17 %9 %7 %18 %9 %
Commercial Services7 %12 %8 %7 %12 %8 %
Contractors6 %12 %7 %6 %12 %7 %
Healthcare8 %2 %7 %7 %1 %6 %
Retail4 %4 %4 %4 %4 %4 %
Transportation4 %2 %4 %4 %2 %4 %
Utilities3 %2 %3 %3 %2 %3 %
Warehousing2 %1 %2 %3 %— %2 %
Other(3)
10 %15 %11 %10 %16 %11 %
Total net sales100 %100 %100 %100 %100 %100 %
Percent of total company revenue79 %21 %100 %78 %20 %100 %
(1)Customer industry results for the nine months ended September 30, 2026 and 2025 primarily use the North American Industry Classification System (NAICS). As customers' businesses evolve, industry classifications may change. When these changes occur, Grainger does not recast the customer classification for prior periods as the industry used in the prior period was appropriate at the point-in-time. As a result, year-over-year changes may be impacted.
(2)Total Company includes other businesses, which included the Cromwell business through the date of divestiture in the fourth quarter of 2025. For further details on the sale, see Note 2 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data in the Company's 2025 Form 10-K. Other businesses accounted for approximately 2% of Total Company revenue for the nine months ended September 30, 2025.
(3)Other primarily includes revenue from industries and customers that are not material individually, including hospitality, restaurants, property management and natural resources.

Total accrued sales incentives are recorded in Accrued expenses and were approximately $130 million and $115 million as of September 30, 2026 and December 31, 2025, respectively.

The Company did not have any material unsatisfied performance obligations, contract assets or liabilities as of September 30, 2026 and December 31, 2025.

NOTE 4 - PROPERTY, BUILDINGS AND EQUIPMENT
Property, buildings and equipment consisted of the following (in millions of dollars):

As of
September 30, 2026December 31, 2025
Land and land improvements$552 $551 
Building, structures and improvements2,041 1,883 
Furniture, fixtures, machinery and equipment2,218 2,066 
Property, buildings and equipment4,811 4,500 
Less accumulated depreciation2,323 2,232 
Property, buildings and equipment – net$2,488 $2,268 

11
W.W. Grainger, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS
The Company did not identify any significant events or changes in circumstances that indicated the existence of impairment indicators during the three and nine months ended September 30, 2026. As such, quantitative assessments were not required.

The balances and changes in the carrying amount of goodwill by segment are as follows (in millions of dollars):

High-Touch Solutions N.A.Endless AssortmentTotal
Balance at January 1, 2025
$306 $49 $355 
Translation5 — 5 
Balance at December 31, 2025
311 49 360 
Acquisition(1)
166 — 166 
Translation(4)(1)(5)
Balance at September 30, 2026
$473 $48 $521 
(1)Represents goodwill related to the acquisition of assets from Adroit Worldwide Media, Inc. in the third quarter of 2026. See Note 2, "Acquisitions," to the Condensed Consolidated Financial Statements in Item 1 for more information on the acquisition of Adroit Worldwide Media, Inc. assets.

No goodwill impairment was recorded for the three and nine months ended September 30, 2026 and 2025.

The balances and changes in intangible assets – net are as follows (in millions of dollars):

As of
September 30, 2026December 31, 2025
Weighted average lifeGross carrying amountAccumulated amortizationNet carrying amountGross carrying amountAccumulated amortizationNet carrying amount
Customer lists and relationships10.4 years$169 $159 $10 $163 $157 $6 
Trademarks, trade names and other10.1 years62 18 44 20 17 3 
Non-amortized trade names and otherIndefinite18 — 18 19 — 19 
Capitalized software4.5 years898 643 255 821 584 237 
Total intangible assets5.7 years$1,147 $820 $327 $1,023 $758 $265 

12
W.W. Grainger, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
NOTE 6 - DEBT
Total debt, including long-term and current maturities, consisted of the following (in millions of dollars):    

As of
September 30, 2026
December 31, 2025
Carrying ValueFair Value Carrying ValueFair Value
4.60% senior notes due 2045
$1,000 $821 $1,000 $904 
4.45% senior notes due 2034
500 460 500 496 
3.75% senior notes due 2046
400 287 400 338 
4.20% senior notes due 2047
400 305 400 317 
Japanese Yen term loans178 178 83 83 
Debt issuance costs – net of amortization and other(20)(20)(21)(21)
Long-term debt2,458 2,031 2,362 2,117 
Commercial paper and other227 227 126 126 
Current maturities227 227 126 126 
Total debt$2,685 $2,258 $2,488 $2,243 

Commercial Paper
As of September 30, 2026 and December 31, 2025, the Company had $225 million and $125 million of commercial paper outstanding, respectively, which was recorded as short-term debt. The weighted average interest rates were 4.02% and 3.84%, respectively.

Senior Notes
Between 2015 and 2024, Grainger issued $2.3 billion in unsecured debt (Senior Notes), net of the $500 million principal repayment for the 1.85% Senior Notes that matured in February 2025, primarily to provide flexibility in funding general working capital needs, share repurchases and long-term cash requirements. The Senior Notes require no principal payments until maturity and interest is paid semi-annually.

The Company incurred debt issuance costs related to its Senior Notes, representing underwriting fees and other expenses. These costs were recorded as a contra-liability in Long-term debt and are being amortized over the term of the Senior Notes using the straight-line method to Interest expense – net. As of September 30, 2026 and December 31, 2025, the cumulative unamortized costs were $20 million and $21 million, respectively.

Japanese Yen Term Loans
In 2026 and 2025, MonotaRO entered into ¥15 billion and ¥13 billion, respectively, term loan agreements to fund the expansion of its distribution center (DC) network. The Japanese Yen term loans mature in 2035, payable in equal monthly principal installments from September 2028 through June 2035. The weighted average interest rates on the 2026 and 2025 term loans are 2.20% and 1.27%, respectively.

Fair Value
The estimated fair value of the Company’s Senior Notes was based on available external pricing data and current market rates for similar debt instruments, among other factors, which are classified as Level 2 inputs within the fair value hierarchy.

NOTE 7 - SEGMENT INFORMATION
Grainger's two reportable segments are High-Touch Solutions N.A. (HTSNA) and Endless Assortment (EA). These reportable segments align with Grainger's go-to-market strategies and bifurcated business models of high-touch solutions and endless assortment that generate sales primarily through the distribution of MRO products. The remaining businesses are classified as Other to reconcile to consolidated results. These businesses individually and in the aggregate do not meet the criteria of a reportable segment.
13
W.W. Grainger, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The operating and reportable segments reflect the way the chief operating decision maker (CODM) evaluates the business. All expenses directly attributable to each reportable segment are included in the operating results for each segment. The CODM is not regularly provided and does not evaluate the segments using total asset or capital expenditure information and it is therefore not disclosed. For further discussion on the CODM, see Note 13 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data in the Company’s 2025 Form 10-K.

The following is a summary of segment results (in millions of dollars):

Three Months Ended September 30,
20262025
High-Touch Solutions N.A.Endless AssortmentTotalHigh-Touch Solutions N.A.Endless AssortmentTotal
Net sales(1)
$4,135 $1,046 $5,181 $3,635 $935 $4,570 
Reconciliation of net sales
Other net sales— 87 
   Total company net sales $5,181 $4,657 
Less:
Cost of goods sold2,448 722 2,140 654 
Other segment items(2)
981 202 871 199 
   Segment operating earnings$706 $122 $828 $624 $82 $706 
Reconciliation of operating earnings
Other operating earnings (losses)— (195)
   Total company operating earnings$828 $511 
Nine Months Ended September 30,
20262025
High-Touch Solutions N.A.Endless AssortmentTotalHigh-Touch Solutions N.A.Endless AssortmentTotal
Net sales(1)
$11,854 $3,090 $14,944 $10,576 $2,692 $13,268 
Reconciliation of net sales
Other net sales— 249 
   Total company net sales $14,944 $13,517 
Less:
Cost of goods sold6,908 2,145 6,188 1,889 
Other segment items(2)
2,866 597 2,575 557 
   Segment operating earnings$2,080 $348 $2,428 $1,813 $246 $2,059 
Reconciliation of operating earnings
Other operating earnings (losses)— (198)
   Total company operating earnings$2,428 $1,861 
(1)Intersegment sales are recorded at values based on market prices, which creates intercompany profit sales that are eliminated within each segment to present only the impact of net sales to external customers.
(2)Other segment items for HTSNA and EA consist of selling, general and administrative expenses primarily comprised of payroll and benefits, marketing expense, depreciation, amortization and non-cash lease expense, corporate overhead expenses allocated to each segment based upon benefits received, occupancy and other miscellaneous expenses. Intersegment expenses including fees and certain incurred costs for shared services are also included within the amounts shown above.

14
W.W. Grainger, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The following is depreciation, amortization and non-cash lease expense (in millions of dollars):

Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Depreciation, amortization and non-cash lease expense(1):
High-Touch Solutions N.A.$67 $62 $199 $181 
Endless Assortment18 20 51 59 
Other— 2 — 7 
Total $85 $84 $250 $247 
(1)Depreciation, amortization and non-cash lease expense presented above is related to long-lived assets, capitalized software and right-of-use assets. Long-lived assets consist of property, buildings and equipment.

The following is revenue by geographic location (in millions of dollars):

Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Revenue by geographic location(1):
United States$4,320 $3,756 $12,312 $10,912 
Japan587 558 1,806 1,600 
Canada193 169 588 506 
Other foreign countries81 174 238 499 
$5,181 $4,657 $14,944 $13,517 
(1)Revenue presented above is attributed to the destination country where the customer is located.

The Company is a broad line distributor of MRO products. Products are regularly added and removed from the Company's inventory assortment. Accordingly, it would be impractical to provide sales information by product category due to the way the business is managed, and the dynamic nature of the inventory offered, including the evolving list of products stocked and additional products available online but not stocked. For further information regarding the Company's sales by segment and customer industry, see Note 3 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1: Financial Statements of this Form 10-Q.

NOTE 8 - CONTINGENCIES AND LEGAL MATTERS
From time to time, the Company is involved in various legal and administrative proceedings, including claims related to: product liability, safety or compliance; privacy and cybersecurity matters; negligence; contract disputes; environmental issues; unclaimed property; wage and hour laws; intellectual property; advertising and marketing; consumer protection; pricing (including disaster or emergency declaration pricing statutes); employment practices; regulatory compliance, including trade and export matters; anti-bribery and corruption; and other matters and actions brought by team members, consumers, competitors, suppliers, customers, governmental entities and other third parties. It is not expected that the ultimate resolution of any of these matters will have, either individually or in the aggregate, a material adverse effect on the Company's consolidated financial position or results of operations.

NOTE 9 - SUBSEQUENT EVENTS
On October 28, 2026, the Company’s Board of Directors declared a quarterly dividend of $2.49 per share, payable December 1, 2026, to shareholders of record on November 9, 2026.
15
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis (MD&A) of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and financial condition of W.W. Grainger, Inc. (Grainger or Company) as it is viewed by management of the Company. The following discussion should be read in conjunction with the Consolidated Financial Statements and accompanying notes for the year ended December 31, 2025 included in the Company's 2025 Form 10-K and the Condensed Consolidated Financial Statements and accompanying notes included in Part I, Item 1: Financial Statements of this Form 10-Q.

Percentage figures included in this section have not been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this section may vary slightly from those obtained by performing the same calculations using the figures in the Company's Condensed Consolidated Financial Statements or in the associated text.

Overview
Grainger is a broad line distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America and Japan. In the fourth quarter of 2025, Grainger exited the U.K. market by completing the sale of the Cromwell business and closing the Zoro U.K. business. Grainger uses a combination of its high-touch solutions and endless assortment businesses to serve its customers worldwide, which rely on Grainger for products and services that enable them to run safe, sustainable and productive operations.

Strategic Priorities
For a discussion of the Company’s strategic priorities for 2026, see Part I, Item 1: Business and Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s 2025 Form 10-K.

Recent Events
Macroeconomic Conditions
The global economy continues to experience elevated levels of volatility and uncertainty, including within the commodity, labor, and transportation markets, driven by a combination of geopolitical developments and macroeconomic factors that can influence demand, cost and execution risk. These dynamics, together with recent changes in U.S. and foreign tariff and trade policies, continue to drive intermittent disruptions in global capital markets and supply chains. These developments may impact the Company’s operations, business, financial condition, and results of operations.

The Company is actively monitoring economic conditions in the U.S. and key international markets, including the continued uncertainty regarding evolving tariff and trade policies, changes in interest rates, foreign currency exchange rate fluctuations, inflationary pressures, rising fuel and transportation costs, and the risk of a global or regional economic recession. Although the precise timing and magnitude of these factors remains uncertain, the Company believes its strategy is well positioned to navigate a range of outcomes. The Company continues to evaluate the impact of evolving tariff and trade policies, including potential changes in product sourcing strategies, cost management and customer pricing, and has implemented various strategies designed to mitigate certain adverse effects of changing inflationary conditions and challenges in our supply chain, while striving to maintain market competitiveness.

Historically, the Company's broad and diverse customer base and the generally nondiscretionary nature of its products have provided a degree of resilience during periods of economic contraction in the industrial MRO market. The full extent and impact of ongoing macroeconomic conditions, including recent, heightened regional military conflict, unprecedented tariff-related developments and shifting government budget policies and priorities at the municipal, state, and national levels, remain uncertain and cannot be predicted at this time, but may affect the Company’s operations, business, financial condition and results of operations.

For further discussion of the Company's risks and uncertainties, see Part I, Item 1A: Risk Factors in the Company’s 2025 Form 10-K.
16
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations – Three Months Ended September 30, 2026
In this section, Grainger utilizes non-GAAP measures where it believes it will assist users of its financial statements in understanding its business. As discussed in the "Non-GAAP Measures" section, the current year results have been adjusted to exclude one-time expenses recorded in SG&A expenses of $8 million within High-Touch Solutions N.A., related to the acquisition of assets discussed in Note 2, "Acquisitions," of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1: Financial Statements of this Form 10-Q. For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measures, see below "Non-GAAP Measures."

The following table is included as an aid to understanding the changes in Grainger’s Condensed Consolidated Statements of Earnings for the three months ended September 30, 2026 and 2025 (in millions of dollars except per share amounts):

Three Months Ended September 30,
% Change% of Net Sales
2026202520262025
Net sales(1)
$5,181 $4,657 11.3 %100.0 %100.0 %
Cost of goods sold3,170 2,859 10.9 61.2 61.4 
Gross profit2,011 1,798 11.8 38.8 38.6 
Selling, general and administrative expenses1,183 1,287 (8.1)22.8 27.6 
Operating earnings828 511 62.0 16.0 11.0 
Other expense – net14 19 (26.3)0.3 0.4 
Income tax provision198 171 15.8 3.8 3.7 
Net earnings616 321 91.9 11.9 6.9 
Noncontrolling interest29 27 7.4 0.6 0.6 
Net earnings attributable to W.W. Grainger, Inc.$587 $294 99.7 11.3 %6.3 %
Diluted earnings per share$12.42 $6.12 102.9 %
(1)For further information regarding the Company's disaggregated revenue, see Note 3 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1: Financial Statements of this Form 10-Q.

The following table is included as an aid to understanding the changes of Grainger's total net sales, daily net sales and daily, organic constant currency net sales compared to the prior year period for the three months ended September 30, 2026 and 2025 (in millions of dollars):

Three Months Ended September 30,
2026
% Change(1)
2025
% Change(1)
Net sales $5,181 11.3 %$4,657 6.1 %
Daily net sales(2)
$81.0 11.3 %$72.8 6.1 %
Daily, organic constant currency net sales(2)
$83.4 14.9 %$72.3 5.4 %
(1)Calculated on the basis of prior year net sales for the three months ended September 30, 2026 and 2025.
(2)Daily net sales are adjusted for the difference in U.S. selling days relative to the prior year period. There were 64 sales days in the three months ended September 30, 2026 and 2025. Daily, organic constant currency net sales are also adjusted to exclude the impact on net sales due to year-over-year changes in foreign currency exchange rates and the net sales results of the divested and closed businesses in the prior year period on a daily basis. For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measures, see below "Non-GAAP Measures."

17
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Net sales of $5,181 million for the three months ended September 30, 2026 increased $524 million, or 11%, and on a daily, organic constant currency basis, net sales increased 15% compared to the same period in 2025. Both High-Touch Solutions N.A. and the Endless Assortment segment contributed to sales growth in the third quarter of 2026. For further discussion on the Company's net sales, see the Segment Analysis section below.

Gross profit of $2,011 million for the three months ended September 30, 2026 increased $213 million, or 12%, and gross profit margin of 38.8% increased 20 basis points compared to the same period in 2025. For further discussion on the Company's gross profit, see the Segment Analysis section below.

Selling, general and administrative (SG&A) expenses of $1,183 million for the three months ended September 30, 2026 decreased $104 million, or 8%, compared to the same period in 2025. Adjusted SG&A expenses of $1,175 million increased $84 million, or 8%, compared to the same period in 2025. The increase was primarily due to higher payroll and benefit expenses in the third quarter of 2026 partially offset by a benefit related to the exit from the U.K. market in the fourth quarter of 2025.

Operating earnings of $828 million for the three months ended September 30, 2026 increased $317 million, or 62%, compared to the same period in 2025. Adjusted operating earnings of $836 million increased $129 million, or 18%, compared to the same period in 2025.

Income tax expense of $198 million for the three months ended September 30, 2026 increased $27 million on a reported basis compared to the same period in 2025. Grainger's effective tax rates were 24.3% and 34.7% for the three months ended September 30, 2026 and 2025, respectively. Adjusted income tax expense of $200 million increased $29 million compared to the same period in 2025. The adjusted effective tax rates were 24.3% and 24.8% for the three months ended September 30, 2026 and 2025, respectively. The Company's adjusted effective tax rate decrease was primarily due to increased tax credit benefits in 2026.

Diluted earnings per share was $12.42 for the three months ended September 30, 2026, an increase of 103% compared to $6.12 for the same period in 2025. Adjusted diluted earnings per share was $12.54, an increase of 23% compared to $10.21 for the same period in 2025.

Segment Analysis
In this section, Grainger utilizes non-GAAP measures where it believes it will assist users of its financial statements in understanding its business. For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measure, see below "Non-GAAP Measures." For further segment information, see Note 7 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1: Financial Statements of this Form 10-Q.

High-Touch Solutions N.A.
The following table shows reported segment results (in millions of dollars):

Three Months Ended September 30,
20262025% Change
Net sales$4,135 $3,635 13.8 %
Gross profit$1,687 $1,495 12.8 %
Selling, general and administrative expenses981 871 12.6 %
Operating earnings$706 $624 13.1 %

Net sales of $4,135 million for the three months ended September 30, 2026 increased $500 million, which represents a 14% increase on a reported and daily, constant currency basis compared to the same period in 2025. The increase was primarily due to volume.

Gross profit of $1,687 million for the three months ended September 30, 2026 increased $192 million, or 13%, and gross profit margin of 40.8% decreased 30 basis points compared to the same period in 2025.
18
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

SG&A expenses of $981 million for the three months ended September 30, 2026 increased $110 million, or 13%, compared to the same period in 2025. Adjusted SG&A of $973 million increased $102 million, or 12%, compared to the same period in 2025. The increase was primarily due to higher payroll and benefit expenses in 2026.

Operating earnings of $706 million for the three months ended September 30, 2026 increased $82 million, or 13%, compared to the same period in 2025. Adjusted operating earnings of $714 million increased $90 million, or 14%, compared to the same period in 2025.

Endless Assortment
The following table shows reported segment results (in millions of dollars):

Three Months Ended September 30,
20262025% Change
Net sales$1,046 $935 11.9 %
Gross profit$324 $281 15.3 %
Selling, general and administrative expenses202 199 1.5 %
Operating earnings$122 $82 48.8 %

Net sales of $1,046 million for the three months ended September 30, 2026 increased $111 million, or 12%, and on a daily, organic constant currency basis increased 19% compared to the same period in 2025. The increase was due to repeat business for the segment and enterprise customer growth at MonotaRO. Sales growth was partially offset by unfavorable currency exchange of 6% due to changes in the exchange rate between the U.S. dollar and the Japanese yen.

Gross profit of $324 million for the three months ended September 30, 2026 increased $43 million, or 15%, and gross profit margin of 31.0% increased 90 basis points compared to the same period in 2025. The increase was primarily due to favorable discount activity at Zoro and favorable product mix across the segment.

SG&A expenses of $202 million for the three months ended September 30, 2026 increased $3 million, or 2%, compared to the same period in 2025. Adjusted SG&A increased $13 million, or 7%, compared to the same period in 2025. The increase was primarily due to higher payroll and benefit and marketing expenses.

Operating earnings of $122 million for the three months ended September 30, 2026 increased $40 million, or 49%, compared to the same period in 2025. Adjusted operating earnings increased $30 million, or 33%, compared to the same period in 2025.

19
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations – Nine Months Ended September 30, 2026
In this section, Grainger utilizes non-GAAP measures where it believes it will assist users of its financial statements in understanding its business. As discussed in the "Non-GAAP Measures" section, the current year results have been adjusted to exclude one-time expenses recorded in SG&A expenses of $8 million within High-Touch Solutions N.A., related to the acquisition of assets discussed in Note 2, "Acquisitions," of the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1: Financial Statements of this Form 10-Q. For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measure, see below "Non-GAAP Measures."

The following table is included as an aid to understanding the changes in Grainger’s Condensed Consolidated Statements of Earnings for the nine months ended September 30, 2026 and 2025 (in millions of dollars except per share amounts):

Nine Months Ended September 30,
% Change% of Net Sales
2026202520262025
Net sales(1)
$14,944 $13,517 10.6 %100.0 %100.0 %
Cost of goods sold9,053 8,254 9.7 60.6 61.1 
Gross profit5,891 5,263 11.9 39.4 38.9 
Selling, general and administrative expenses3,463 3,402 1.8 23.2 25.1 
Operating earnings2,428 1,861 30.5 16.2 13.8 
Other expense – net41 51 (19.6)0.2 0.4 
Income tax provision590 481 22.7 3.9 3.6 
Net earnings1,797 1,329 35.2 12.1 9.8 
Noncontrolling interest85 74 14.9 0.6 0.5 
Net earnings attributable to W.W. Grainger, Inc.$1,712 $1,255 36.4 11.5 %9.3 %
Diluted earnings per share$36.08 $25.97 38.9 %
(1)For further information regarding the Company's disaggregated revenue, see Note 3 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1: Financial Statements of this Form 10-Q.

The following table is included as an aid to understanding the changes of Grainger's total net sales, daily net sales and daily, organic constant currency net sales compared to the prior year period for the nine months ended September 30, 2026 and 2025 (in millions of dollars):

Nine Months Ended September 30,
2026
% Change(1)
2025
% Change(1)
Net sales $14,944 10.6 %$13,517 4.5 %
Daily net sales(2)
$78.2 10.6 %$71.2 5.0 %
Daily, organic constant currency net sales(2)
$80.2 13.6 %$71.2 4.9 %
(1)Calculated on the basis of prior year net sales for the nine months ended September 30, 2026 and 2025.
(2)Daily net sales are adjusted for the difference in U.S. selling days relative to the prior year period. There were 191 sales days in the nine months ended September 30, 2026 and 2025. Daily, organic constant currency net sales are also adjusted to exclude the impact on net sales due to year-over-year changes in foreign currency exchange rates and the net sales results of the divested and closed businesses in the prior year period on a daily basis. For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measures, see below "Non-GAAP Measures."

20
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Net sales of $14,944 million for the nine months ended September 30, 2026 increased $1,427 million, or 11%, and on a daily, organic constant currency basis increased 14% compared to the same period in 2025. Both High-Touch Solutions N.A. and the Endless Assortment segments contributed to sales growth in the nine months ended September 30, 2026. For further discussion on the Company's net sales, see the Segment Analysis section below.

Gross profit of $5,891 million for the nine months ended September 30, 2026 increased $628 million, or 12%, and gross profit margin of 39.4% increased 50 basis points compared to the same period in 2025. For further discussion on the Company's gross profit, see the Segment Analysis section below.

SG&A expenses of $3,463 million for the nine months ended September 30, 2026 increased $61 million, or 2%, compared to the same period in 2025. Adjusted SG&A of $3,455 million increased $249 million, or 8%, compared to the same period in 2025. The increase was primarily due to higher payroll and benefit expenses in 2026 partially offset by a benefit related to the exit from the U.K. market in the fourth quarter of 2025.

Operating earnings of $2,428 million for the nine months ended September 30, 2026 increased $567 million, or 31%, compared to the same period in 2025. Adjusted operating earnings of $2,436 million increased $379 million, or 18%, compared to the same period in 2025.

Income taxes of $590 million for the nine months ended September 30, 2026 increased $109 million on a reported basis compared to the same period in 2025. Grainger's effective tax rates were 24.7% and 26.6% for the nine months ended September 30, 2026 and 2025, respectively. Adjusted income tax expense of $592 million increased $111 million compared to the same period in 2025. The adjusted effective tax rates were 24.7% and 24.0% for the nine months ended September 30, 2026 and 2025, respectively. The Company's adjusted effective tax rate increase was primarily due to the impact of tax legislation effective in 2026.

Diluted earnings per share was $36.08 for the nine months ended September 30, 2026, an increase of 39% compared to $25.97 for the same period in 2025. Adjusted diluted earnings per share was $36.20, an increase of 21% compared to $30.03 for the same period in 2025.

Segment Analysis
In this section, Grainger utilizes non-GAAP measures where it believes it will assist users of its financial statements in understanding its business. For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measure, see below "Non-GAAP Measures." For further segment information, see Note 7 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1: Financial Statements of this Form 10-Q.

High-Touch Solutions N.A.
The following table shows reported segment results (in millions of dollars):

Nine Months Ended September 30,
20262025% Change
Net sales$11,854 $10,576 12.1 %
Gross profit$4,946 $4,388 12.7 %
Selling, general and administrative expenses2,866 2,575 11.3 %
Operating earnings$2,080 $1,813 14.7 %

Net sales of $11,854 million for the nine months ended September 30, 2026 increased $1,278 million, which represents a 12% increase on a reported and daily, constant currency basis compared to the same period in 2025. The increase was primarily due to volume.

Gross profit of $4,946 million for the nine months ended September 30, 2026 increased $558 million, or 13%, and gross profit margin of 41.7% increased 20 basis points compared to the same period in 2025.

21
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
SG&A expenses of $2,866 million for the nine months ended September 30, 2026 increased $291 million, or 11%, compared to the same period in 2025. Adjusted SG&A of $2,858 million increased $283 million, or 11%, compared to the same period in 2025. The increase was primarily due to higher payroll and benefit expenses in 2026.

Operating earnings of $2,080 million for the nine months ended September 30, 2026 increased $267 million, or 15%, compared to the same period in 2025. Adjusted operating earnings of $2,088 million increased $275 million, or 15%, compared to the same period in 2025.

Endless Assortment
The following table shows reported segment results (in millions of dollars):

Nine Months Ended September 30,
20262025% Change
Net sales$3,090 $2,692 14.8 %
Gross profit$945 $803 17.7 %
Selling, general and administrative expenses597 557 7.2 %
Operating earnings$348 $246 41.5 %

Net sales of $3,090 million for the nine months ended September 30, 2026 increased $398 million, or 15%, and on a daily, organic constant currency basis increased 21% compared to the same period in 2025. The increase was due to repeat business for the segment and enterprise customer growth at MonotaRO. Sales growth was partially offset by unfavorable currency exchange of 5% due to changes in the exchange rate between the U.S. dollar and the Japanese yen.

Gross profit of $945 million for the nine months ended September 30, 2026 increased $142 million, or 18%, and gross profit margin of 30.6% increased 80 basis points compared to the same period in 2025. The increase was primarily due to favorable discount activity at Zoro and favorable product mix across the segment.

SG&A expenses of $597 million for the nine months ended September 30, 2026 increased $40 million, or 7%, compared to the same period in 2025. Adjusted SG&A increased $50 million, or 9%, compared to the same period in 2025. The increase was primarily due to higher marketing expenses in 2026.

Operating earnings of $348 million for the nine months ended September 30, 2026 increased $102 million, or 42%, compared to the same period in 2025. Adjusted operating earnings increased $92 million, or 36%, compared to the same period in 2025.
22
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Non-GAAP Measures
Grainger utilizes non-GAAP measures where it believes it will assist users of its financial statements in understanding its business. Non-GAAP measures exclude certain items affecting comparability that can affect the year-over-year assessment of operating results and other one-time items that do not directly reflect ongoing operating results. The Company adjusts its reported net sales when there are differences in the number of U.S. selling days relative to the prior year period and also excludes the impact on reported net sales due to changes in foreign currency exchange rates and results of certain divested or closed businesses. This includes the net sales results of the divested Cromwell business and closed Zoro U.K. business, within Other and Endless Assortment, respectively, announced in the third quarter of 2025 and completed in the fourth quarter of 2025. Adjusted results, including adjusted SG&A, adjusted operating earnings, adjusted net earnings and adjusted diluted EPS exclude certain non-recurring items, including restructuring charges, asset impairments, gains and losses associated with business divestitures or closures and other non-recurring, infrequent or unusual gains and losses from the Company’s most directly comparable reported U.S. generally accepted accounting principles (GAAP) results. The Company believes its non-GAAP measures provide meaningful information to assist investors in understanding financial results and assessing prospects for future performance as they provide a better baseline for analyzing the ongoing performance of its businesses by excluding items that may not be indicative of core operating results. Grainger’s non-GAAP financial measures should be considered in addition to, and not as a replacement for or as a superior measure to, its most directly comparable GAAP measures and may not be comparable to similarly titled measures reported by other companies.

Acquisition of Adroit Worldwide Media, Inc. Assets
On August 26, 2026, the Company acquired technology, intellectual property, and talent assets from Adroit Worldwide Media, Inc. for a purchase price of $215 million, which was comprised of $210 million of cash paid at closing and a $5 million payment made prior to the closing. The Company incurred $8 million of transaction costs and recognized a tax benefit of $2 million as a result of this acquisition. See Note 2, "Acquisitions," to the Condensed Consolidated Financial Statements in Item 1 for more information on the acquisition of Adroit Worldwide Media, Inc. assets.

Exiting Market in the United Kingdom
In the third quarter of 2025, the Company committed to a plan to sell its Cromwell business in the U.K. and concluded that the business met the criteria as held for sale. The Company recorded a pre-tax asset impairment loss of $186 million in SG&A expenses. Additionally, the Company announced the closure of Zoro U.K. in its Endless Assortment segment and recorded expenses related to the closure of $10 million in SG&A expenses. The Company completed the divestiture of Cromwell and closure of Zoro U.K. in the fourth quarter of 2025. For further details on the sale, see Note 2 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data in the Company’s 2025 Form 10-K.
23
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following tables provide reconciliations of reported net sales growth compared to the prior year period in accordance with GAAP to the Company's non-GAAP measures daily net sales and daily, organic constant currency net sales for the three months ended September 30, 2026 and 2025 (in millions of dollars):

Three Months Ended September 30,
High-Touch Solutions N.A.Endless Assortment
Total Company(1)
2026
% Change(2)
2026
% Change(2)
2026
% Change(2)
Reported net sales$4,135 13.8 %$1,046 11.9 %$5,181 11.3 %
   Daily impact(3)
— — — — — — 
Daily net sales64.6 13.8 16.3 11.9 81.0 11.3 
   Foreign currency exchange(4)
— — 0.9 6.2 0.9 1.2 
   Business divestiture(5)
— — 0.2 1.2 1.5 2.4 
Daily, organic constant currency net sales$64.6 13.8 %$17.4 19.3 %$83.4 14.9 %
2025
% Change(2)
2025
% Change(2)
2025
% Change(2)
Reported net sales$3,635 3.4 %$935 18.2 %$4,657 6.1 %
   Daily impact(3)
— — — — — — 
Daily net sales56.8 3.4 14.6 18.2 72.8 6.1 
   Foreign currency exchange(4)
— — (0.4)(3.6)(0.5)(0.7)
   Business divestiture(5)
— — — — — — 
Daily, organic constant currency net sales$56.8 3.4 %$14.2 14.6 %$72.3 5.4 %
(1)Total Company includes other businesses, which included the Cromwell business through the date of divestiture in the fourth quarter of 2025. Grainger's businesses reported in Other do not meet the criteria of a reportable segment.
(2)Compared to net sales in the prior year period.
(3)Excludes the impact on net sales due to the difference in U.S. selling days relative to the prior year period on a daily basis. There were 64 sales days in the three months ended September 30, 2026 and 2025.
(4)Excludes the impact on net sales due to year-over-year changes in foreign currency exchange rates on a daily basis.
(5)Excludes the net sales results of the divested Cromwell business and closed Zoro U.K. business, announced in the third quarter of 2025 and completed in the fourth quarter of 2025, in the prior year period on a daily basis. There was no business divestiture impact for the three months ended September 30, 2025 compared to the prior year period on a daily basis.

24
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following tables provide reconciliations of reported net sales growth compared to the prior year period in accordance with GAAP to the Company's non-GAAP measures daily net sales and daily, organic constant currency net sales for the nine months ended September 30, 2026 and 2025 (in millions of dollars):

Nine Months Ended September 30,
High-Touch Solutions N.A.Endless Assortment
Total Company(1)
2026
% Change(2)
2026
% Change(2)
2026
% Change(2)
Reported net sales$11,854 12.1 %$3,090 14.8 %$14,944 10.6 %
   Daily impact(3)
— — — — — — 
Daily net sales62.1 12.1 16.2 14.8 78.2 10.6 
   Foreign currency exchange(4)
(0.1)(0.2)0.6 4.5 0.5 0.7 
   Business divestiture(5)
— — 0.2 1.2 1.5 2.3 
Daily, organic constant currency net sales$62.0 11.9 %$17.0 20.5 %$80.2 13.6 %
2025
% Change(2)
2025
% Change(2)
2025
% Change(2)
Reported net sales$10,576 1.9 %$2,692 16.1 %$13,517 4.5 %
   Daily impact(3)
0.3 0.5 0.1 0.6 0.4 0.5 
Daily net sales55.7 2.4 14.2 16.7 71.2 5.0 
   Foreign currency exchange(4)
0.2 0.3 (0.2)(1.3)— (0.1)
   Business divestiture(5)
— — — — — — 
Daily, organic constant currency net sales$55.9 2.7 %$14.0 15.4 %$71.2 4.9 %
(1)Total Company includes other businesses, which included the Cromwell business through the date of divestiture in the fourth quarter of 2025. Grainger's businesses reported in Other do not meet the criteria of a reportable segment.
(2)Compared to net sales in the prior year period.
(3)Excludes the impact on net sales due to the difference in U.S. selling days relative to the prior year period on a daily basis. There were 191 sales days in the nine months ended September 30, 2026 and 2025.
(4)Excludes the impact on net sales due to year-over-year changes in foreign currency exchange rates on a daily basis.
(5)Excludes the net sales results of the divested Cromwell business and closed Zoro U.K. business, announced in the third quarter of 2025 and completed in the fourth quarter of 2025, in the prior year period on a daily basis. There was no business divestiture impact for the nine months ended September 30, 2025 compared to the prior year period on a daily basis.

The following tables provide reconciliations of reported SG&A expenses, operating earnings, net earnings attributable to W.W. Grainger, Inc. and diluted earnings per share determined in accordance with GAAP to the Company's non-GAAP measures adjusted SG&A expenses, adjusted operating earnings, adjusted net earnings attributable to W.W. Grainger, Inc. and adjusted diluted earnings per share for the three and nine months ended September 30, 2026 and 2025 (in millions of dollars):

25
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Three months ended September 30, 2026Reported
Adjustment(1)
Adjusted
% Change Reported(3)
% Change Adjusted(3)
Selling, general and administrative expenses
High-Touch Solutions N.A.$981 $(8)$973 
Endless Assortment202 — 202 
Other(4)
— — — 
Selling, general and administrative expenses$1,183 $(8)$1,175 (8.1)%7.7%
Earnings
High-Touch Solutions N.A.$706 $8 $714 
Endless Assortment122 — 122 
Other(4)
— — — 
Operating earnings$828 $8 $836 62.0%18.2%
Total other expense – net(14)— (14)
Income tax provision(5)
(198)(2)(200)
Net earnings$616 $6 $622 
Noncontrolling interest(29)— (29)
Net earnings attributable to W.W. Grainger, Inc.$587 $6 $593 99.7%21.0%
Diluted earnings per share$12.42 $0.12 $12.54 102.9%22.8%
Three months ended September 30, 2025Reported
Adjustment(2)
Adjusted
% Change Reported(3)
% Change Adjusted(3)
Selling, general and administrative expenses
High-Touch Solutions N.A.$871 $— $871 
Endless Assortment199 (10)189 
Other(4)
217 (186)31 
Selling, general and administrative expenses$1,287 $(196)$1,091 24.5%5.5%
Earnings
High-Touch Solutions N.A.$624 $— $624 
Endless Assortment82 10 92 
Other(4)
(195)186 (9)
Operating earnings$511 $196 $707 (25.5)%3.1%
Total other expense – net(19)— (19)
Income tax provision(171)— (171)
Net earnings$321 $196 $517 
Noncontrolling interest(27)— (27)
Net earnings attributable to W.W. Grainger, Inc.$294 $196 $490 (39.5)%0.8%
Diluted earnings per share$6.12 $4.09 $10.21 (38.0)%3.4%
(1)Reflects transaction costs associated with the acquisition of assets from Adroit Worldwide Media, Inc. in the third quarter of 2026.
(2)Reflects the loss on sale of the Cromwell business and closure of Zoro U.K. announced in the third quarter of 2025 and completed in the fourth quarter of 2025.
(3)Compared to the reported and adjusted results of the prior year period.
(4)Grainger's businesses reported in Other do not meet the criteria of a reportable segment.
(5)Reflects a tax benefit related to transaction costs associated with the acquisition of assets from Adroit Worldwide Media, Inc. in the third quarter of 2026. Grainger's reported and adjusted effective tax rate was 24.3% for the three months ended September 30, 2026.
26
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Nine Months Ended September 30, 2026Reported
Adjustment(1)
Adjusted
% Change Reported(3)
% Change Adjusted(3)
Selling, general and administrative expenses
High-Touch Solutions N.A.$2,866 $(8)$2,858 
Endless Assortment597 — 597 
Other(4)
— — — 
Selling, general and administrative expenses$3,463 $(8)$3,455 1.8%7.8%
Earnings
High-Touch Solutions N.A.$2,080 $8 $2,088 
Endless Assortment348 — 348 
Other(4)
— — — 
Operating earnings$2,428 $8 $2,436 30.5%18.4%
Total other expense – net(41)— (41)
Income tax provision(5)
(590)(2)(592)
Net earnings$1,797 $6 $1,803 
Noncontrolling interest(85)— (85)
Net earnings attributable to W.W. Grainger, Inc.$1,712 $6 $1,718 36.4%18.4%
Diluted earnings per share$36.08 $0.12 $36.20 38.9%20.6%
Nine Months Ended September 30, 2025Reported
Adjustment(2)
Adjusted
% Change Reported(3)
% Change Adjusted(3)
Selling, general and administrative expenses
High-Touch Solutions N.A.$2,575 $— $2,575 
Endless Assortment557 (10)547 
Other(4)
270 (186)84 
Selling, general and administrative expenses$3,402 $(196)$3,206 10.5%4.7%
Earnings
High-Touch Solutions N.A.$1,813 $— $1,813 
Endless Assortment246 10 256 
Other(4)
(198)186 (12)
Operating earnings$1,861 $196 $2,057 (7.1)%1.8%
Total other expense – net(51)— (51)
Income tax provision(481)— (481)
Net earnings$1,329 $196 $1,525 
Noncontrolling interest(74)— (74)
Net earnings attributable to W.W. Grainger, Inc.$1,255 $196 $1,451 (12.5)%0.3%
Diluted earnings per share$25.97 $4.06 $30.03 (10.4)%2.7%
(1)Reflects transaction costs associated with the acquisition of assets from Adroit Worldwide Media, Inc. in the third quarter of 2026.
(2)Reflects the loss on sale of the Cromwell business and closure of Zoro U.K. announced in the third quarter of 2025 and completed in the fourth quarter of 2025
(3)Compared to the reported and adjusted results of the prior year period.
(4)Grainger's businesses reported in Other do not meet the criteria of a reportable segment.
(5)Reflects a tax benefit related to transaction costs associated with the acquisition of assets from Adroit Worldwide Media, Inc. in the third quarter of 2026. Grainger's reported and adjusted effective tax rate was 24.7% for the nine months ended September 30, 2026, respectively.
27
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Grainger believes its current balances of cash and cash equivalents, marketable securities, and availability under its revolving credit facility, which supports the Company's commercial paper program, will be sufficient to meet its liquidity needs for the next twelve months. The Company expects to continue to invest in its business and return excess cash to shareholders through cash dividends and share repurchases, which it plans to fund through cash flows generated from operations. Grainger also maintains access to capital markets and may issue debt or equity securities from time to time, which may provide an additional source of liquidity.

Cash and Cash Equivalents
As of September 30, 2026 and December 31, 2025, Grainger had cash and cash equivalents of $768 million and $585 million, respectively. The Company had approximately $2.0 billion in available liquidity as of September 30, 2026.

Cash Flows
The following table shows the Company's cash flow activity for the periods presented (in millions of dollars):

Nine Months Ended September 30,
20262025
Total cash provided by (used in):
Operating activities$1,844 $1,620 
Investing activities(628)(543)
Financing activities(1,027)(1,599)
Effect of exchange rate changes on cash and cash equivalents(6)21
Increase (decrease) in cash and cash equivalents$183 $(501)


Net cash provided by operating activities was $1,844 million and $1,620 million for the nine months ended September 30, 2026 and 2025, respectively. The increase was primarily due to higher net earnings.

Net cash used in investing activities was $628 million and $543 million for the nine months ended September 30, 2026 and 2025, respectively. The 2026 investing activities were higher primarily due to the acquisition of assets from Adroit Worldwide Media, Inc. See Note 2, "Acquisitions," to the Condensed Consolidated Financial Statements in Item 1 for more information on the acquisition of Adroit Worldwide Media, Inc. assets.

Net cash used in financing activities was $1,027 million and $1,599 million for the nine months ended September 30, 2026 and 2025, respectively. The decrease in cash used in financing activities was primarily due to the repayment of the 1.85% Senior Notes in the amount of $500 million in 2025.

Working Capital
Working capital as of September 30, 2026 was $3,651 million, an increase of $136 million compared to $3,515 million as of December 31, 2025. As of September 30, 2026 and December 31, 2025, the ratio of current assets to current liabilities was 2.8 and 3.0, respectively.

Debt
Grainger maintains a debt ratio and liquidity position that provides flexibility in funding working capital needs and long-term cash requirements. Grainger has various sources of financing available.

Total debt as a percent of total capitalization was 36.2% and 37.5% as of September 30, 2026 and December 31, 2025, respectively.

Grainger receives ratings from two independent credit rating agencies: Moody's Investor Service (Moody's) and Standard & Poor's (S&P). Both credit rating agencies currently rate the Company's corporate credit at investment grade.
28
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following table summarizes the Company's credit ratings as of September 30, 2026:

CorporateSenior UnsecuredShort-term
Moody'sA1A1P1
S&PA+A+A1

Commitments and Other Contractual Obligations
There were no material changes to the Company’s commitments and other contractual obligations from those disclosed in Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s 2025 Form 10-K.

Critical Accounting Estimates
The preparation of Grainger’s Condensed Consolidated Financial Statements and accompanying notes are in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make assumptions and estimates that affect the reported amounts. The Company considers an accounting policy to be a critical estimate if: (1) it involves assumptions that are uncertain when judgment was applied, and (2) changes in the estimate assumptions, or selection of a different estimate methodology, could have a significant impact on Grainger’s consolidated financial position and results. While the Company believes the assumptions and estimates used are reasonable, the Company’s management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances.

Note 1 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements of the Company's 2025 Form 10-K describe the significant accounting policies and methods used in the preparation of the Company’s Condensed Consolidated Financial Statements.

There were no material changes to the Company's critical accounting estimates from those disclosed in Part II, Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's 2025 Form 10-K.
29
W.W. Grainger, Inc. and Subsidiaries
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
From time to time in this Quarterly Report on Form 10-Q as well as in other written reports, communications and verbal statements, Grainger makes forward-looking statements that are not historical in nature but concern forecasts of future results, business plans, analyses, prospects, strategies, objectives and other matters that may be deemed to be “forward-looking statements” under the federal securities laws. 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.

Grainger cannot guarantee that any forward-looking statement will be realized and achievement of future results is subject to risks and uncertainties, many of which are beyond Grainger's control, which could cause Grainger's results to differ materially from those that are presented.

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, acquisitions or business strategies, including with respect to Grainger's eCommerce platforms and artificial intelligence; failure to adequately protect our 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, including new or revised provisions relating to contract compliance or performance; 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; an incident that adversely impacts Grainger’s reputation or brand; 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 corporate responsibility efforts; 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 identified under Part I, Item 1A: Risk Factors and elsewhere in Grainger's 2025 Form 10-K, as updated from time to time in Grainger's Quarterly Form 10-Q.

The preceding list is not intended to be an exhaustive list of all of the factors that could impact Grainger's forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on Grainger's forward-looking statements and Grainger undertakes no obligation to update or revise any of its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
30

W.W. Grainger, Inc. and Subsidiaries

Item 3: Quantitative and Qualitative Disclosures About Market Risk
Grainger’s primary market risk exposures include changes in foreign currency exchange rates and commodity price risks.

There were no material changes to the Company’s market risk from those described in Part II, Item 7A: Quantitative and Qualitative Disclosures About Market Risk in the Company's 2025 Form 10-K.

Item 4: Controls and Procedures
Disclosure Controls and Procedures
The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and the Interim Chief Financial Officer, evaluated the effectiveness of Grainger's disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Securities Exchange Act of 1934, as amended (the Exchange Act) as of the end of the period covered by this quarterly report. Based upon that evaluation, the Chief Executive Officer and the Interim Chief Financial Officer concluded that Grainger’s disclosure controls and procedures were effective as of the end of the period covered by this report in (i) ensuring that information required to be disclosed by Grainger in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Interim Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting
There were no changes in Grainger's internal control over financial reporting for the quarter ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, Grainger’s internal control over financial reporting.
31

PART II – OTHER INFORMATION
 
Item 1: Legal Proceedings
For a description of the Company’s legal proceedings, see Note 8 of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1: Financial Information of this Form 10-Q.

Item 1A: Risk Factors
There have been no material changes from the risk factors previously disclosed in Part I, Item 1A: Risk Factors in the Company's 2025 Form 10-K.

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities – Third Quarter 2026
Period
Total Number of Shares Purchased(1)(2)
Average Price Paid per Share(3)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(4)(2)
Maximum Number of
Shares That May Yet be Purchased Under the
Plans or Programs
Jul. 1 – Jul. 31———2,742,741
Aug. 1 – Aug. 31118,400$1,302.30118,3992,624,342
Sep. 1 – Sep. 3097,366$1,275.2997,2522,527,090
  Total215,766215,651
(1)There were no shares withheld to satisfy tax withholding obligations.
(2)The difference of 115 shares between the Total Number of Shares Purchased and the Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs represents shares purchased by the administrator and record keeper of the W.W. Grainger, Inc. Retirement Savings Plan for the benefit of the employees who participate in the plan.
(3)Average price paid per share excludes excise tax and commissions of $0.02 per share paid.
(4)Purchases were made pursuant to a share repurchase program approved by Grainger's Board of Directors and announced April 24, 2024 (2024 Program). The 2024 Program authorized the Company to repurchase an aggregate amount of up to five million shares in the open market, through privately negotiated transactions and block transactions, pursuant to a trading plan or otherwise with no expiration date.
Item 5: Other Information
None of the Company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company's quarter ended September 30, 2026.

32




W.W. Grainger, Inc. and Subsidiaries
Item 6: Exhibits
EXHIBIT NO.DESCRIPTION
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.***
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.**
101.SCHXBRL Taxonomy Extension Schema Document.**
101.CALXBRL Taxonomy Extension Calculation Linkbase Document.**
101.DEFXBRL Taxonomy Extension Definition Linkbase Document.**
101.LABXBRL Taxonomy Extension Label Linkbase Document.**
101.PREXBRL Taxonomy Extension Presentation Linkbase Document.**
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).**
(*) Management contract or compensatory plan or arrangement.
(**) Filed herewith.
(***) Furnished herewith.
33

SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
W.W. GRAINGER, INC.
Date:November 4, 2026
 
 
 
By:
 
 
 
/s/ Laurie R. Thomson
Laurie R. Thomson
Interim Chief Financial Officer,
Vice President, and Controller
(Principal Financial Officer and Principal Accounting Officer)

34

CERTIFICATION
Exhibit 31.1
I, D.G. Macpherson, certify that:
 
1.I have reviewed this Quarterly Report on Form 10-Q of W.W. Grainger, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 4, 2026
 
By: /s/ D.G. Macpherson                          
Name:D.G. Macpherson
Title:Chairman and Chief Executive Officer

CERTIFICATION
Exhibit 31.2
I, Laurie R. Thomson, certify that:
 
1.I have reviewed this Quarterly Report on Form 10-Q of W.W. Grainger, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 4, 2026
 
By: /s/ Laurie R. Thomson                                      
Name:Laurie R. Thomson
Title:Interim Chief Financial Officer, Vice President, and Controller

Exhibit 32
 
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
 
In connection with the Quarterly Report on Form 10-Q of W.W. Grainger, Inc. (“Grainger”) for the quarterly period ended September 30, 2026, (the “Report”), D.G. Macpherson, as Chairman and Chief Executive Officer of Grainger, and Laurie R. Thomson, as Interim Chief Financial Officer, Vice President, and Controller of Grainger, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Grainger.

 /s/ D.G. Macpherson
D.G. Macpherson
Chairman and Chief Executive Officer
November 4, 2026
 /s/ Laurie R. Thomson
Laurie R. Thomson
Interim Chief Financial Officer, Vice President, and Controller
November 4, 2026