Solid Q2 Performance: Grainger reported nearly $4.6 billion in sales for Q2 2025, an increase of 5.6% YoY (or 5.1% on a daily constant currency basis). Operating margins stood at 14.9%, with diluted EPS rising 2.2% to $9.97. However, the headline figures were affected by LIFO inventory valuation headwinds related to tariffs.

Adjusted 2025 Earnings Outlook: The company updated its full-year gross margin projection to between 38.6% and 38.9%, decreasing by 50 to 80 basis points YoY due to tariff-related pricing and LIFO impacts. Consequently, diluted EPS guidance was revised to between $38.50 and $40.25, which reflects only a 1% increase YoY at the midpoint.

Increased Capital Expenditures: Grainger anticipates a $100 million rise in capital expenditures due to timing in distribution center investments. This is a strategic move to strengthen the supply chain but also shifted funds away from share repurchases.