Grainger — No. 1 on MDM’s Top Distributor Lists for Industrial, MRO and Safety supplies — reported its 2025 third quarter financial results on Oct. 31, which showed a further acceleration in top-line and organic sales while gross margin slipped against last-in, first-out (LIFO) inventory costs.

In the Store: MDM’s U.S. MRO Market Trends Report 

Grainger 3Q Highlights

• 3Q sales of $4.66 billion were up 6.1% year-over-year, with organic sales up 5.4%. Sequentially, that topped 2Q’s 5.6%/5.1%.
• Gross margin of 38.6% fell 60 basis points year-over-year (+10 bps from 2Q), attributed to tariff impacts that include an ongoing LIFO headwind. Excluding that headwind, Grainger’s implied first-in, first-out gross margin increased year-over-year. 
• Adjusted operating profit — which excludes an impairment loss and other expenses tied to Grainger’s planned divestment of its U.K. operations that include Cromwell (announced Oct. 17) — increased 3.1% year-over-year (-25.5% reported), with operating margin down 40 bps (-460 reported. Likewise, adjusted 3Q net profit of $490 million increased 0.8% (-39.5% reported).
• On the tariffs front, Grainger’s 3Q presentation noted the company took additional pricing actions in September that included initial increases on supplier-imported products where cost negotiations were final. That followed initial pricing actions implemented in May, predominantly on products directly imported by Grainger.

MDM’s 3Q25 MarketPulse Report (Premium access here) 

Grainger 3Q Sales Breakdown

High-touch Solutions – N.A.:

• Sales of $3.64 billion were up 3.4% year-over-year, both reported and organic. Sequentially, that topped 2Q’s 2.5%/2.8%.
• Gross margin of 41.1% fell 50 bps year-over-year, but improved when excluding LIFO headwind. Sequentially, margin ticked up 10 bps.
• Operating margin of 17.2% fell 50 bps but was up 60 bps from 2Q
• Sales at large customers grew 3% year-over-year (2% in 2Q), and sales at mid-sized customers grew 7% (4% in 2Q)
• Sales growth by customer end market:
  • Commercial Services — Up mid-single digits
  • Contractors — Up low-double digits
  • Government — Up low-single digits
  • Healthcare — Up mid-single digits
  • Manufacturing — Up low-single digits
  • Retail — Up low-single digits
  • Transportation — Up mid-single digits
  • Utilities — Up mid-single digits
  • Warehousing — Down mid-teens
  • Wholesale — Up low-single digits
  • Other — Up low-double digits

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Endless Assortment:

• Sales of $935 million jumped 18.2%, with organic up 14.6%. Daily sales at Zoro increased 17.8%, while MonotaRO sales grew 12.6% on a local days, constant currency basis.
• Gross margin of 30.1% improved 60 bps year-over-year and 30 bps from 2Q, with Grainger noting a continued benefit from pricing actions at Zoro and favorable mix at MonotaRO
• Operating margin of 9.8% improved 100 bps year-over-year (-10 bps from 2Q), attributed to gross margin flow through and top-line leverage across the segment

Updated 2025 Guidance

In updating and narrowing its 2025 full-year outlook, Grainger softened its sales projection but raised its margin expectations. The company expects LIFO headwinds to subside by mid-2026, with gross margin stabilizing at approximately 39%.

	May 1 Guidance	Aug. 1 Guidance	Oct. 31 Guidance
Net Sales	$17.6B-$18.1B	$17.9B-$18.2B	$17.8-18.0B
Sales growth	2.7-5.2%	4.4-5.9%	3.9%-4.7%
Organic sales growth	4.0-6.5%	4.5-6.0%	4.4%-5.1%
Gross margin	39.1-39.4%	38.6-38.9%	38.9%-39.1%
Adj. Operating margin	15.1-15.5%	14.7-15.1%	15.0%-15.2%