MRO supplies distributor Grainger reported its 2025 first quarter financial results on May 1, showing continued solid organic growth and reaffirmation of the company’s full-year outlook. 

1Q Highlights 

• Grainger posted 1Q sales of $4.31 billion, up 1.7% year-over-year, with daily, organic sales up 4.4% 
• Gross margin of 39.7% increased 30 basis points both year-over-year and from 4Q24 
• Operating margin of 15.6% fell 20 basis points year-over-year 
• Net profit of $479 million edged up 0.2% year-over-year 

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1Q Sales Breakdown 

High-Touch Solutions – N.A.:  

• Sales of $3.40 billion dipped 0.2% year-over-year, but increased 1.2% on a daily basis and 1.9% on an organic basis, with growth across all geographies 
• Gross margin of 42.4% increased 60 bps year-over-year, with a tailwind related to Grainger’s annual sales meeting in February 
• Operating margin of 17.7% fell 20 bps year-over-year, impacted by one fewer selling day 

Endless Assortment 

• Sales of $828 million jumped 10.3% year-over-year, with organic sales up 15.3% 
• Sales as Zoro grew 18.4% on a daily basis 
• Sales at MonotaRO grew 13.6% in local days and constant currency 
• Gross margin of 29.6% increased 30 bps, helped by strategic pricing at Zoro 
• Operating margin of 8.7% increased 80 bps year-over-year, including 240 bps at Zoro due to flow through and top-line leverage and 20 bps at MonotaRO 

2025 Full Year Outlook 

Grainger — an MDM 2025 Industry Titan in our Top Distributor Lists for Industrial Supplies and MRO — maintained the following guidance ranges for full-year results that it did in its 4Q24 full-year report, which the company notes incorporates certain known impacts of tariffs today and assumes that mitigating actions help offset future potential impacts: 

• Net Sales: $17.6 billion to $18.1 billion 
• Sales Growth: 2.7% to 5.2% 
• Organic Sales Growth: 4.0% to 6.5% 
• Gross Margin: 39.1% to 39.4% 
• Operating Margin: 15.1% to 15.5% 
• High-Touch Solutions – N.A.: 17.0% to 17.4% 
• Endless Assortment: 8.5% to 9.0% 

In an analyst note, Baird’s Equity Research Industrial Distribution unit provided the following analysis of Grainger’s 1Q results: “1Q25 results slightly beat on better-than-expected gross margin, with revenue largely in line with guidance/expectations. Full-year guidance was reiterated across all key metrics. From a tariff perspective, management anticipates incremental cost will be offset by pricing actions and assumes some level of offsetting demand destruction, leaving the guidance unchanged. Overall, it was a solid quarter/start to the year.”