GWW · 8-K · 20260804PR000076
Gross Margin Drivers
W.W. GRAINGER, INC. · 2026-08-04 · Importance 68 · Surprise 58 · No source text
Q2 2026 gross profit increased 13.0% year over year to $1.984 billion, while gross margin expanded 100 basis points to 39.5%. IEEPA tariff refunds reduced cost of goods sold by $43 million and, together with the U.K. market exit, contributed materially to the margin improvement. High-Touch Solutions - N.A. gross margin increased 80 basis points to 41.8%, with tariff refunds and favorable mix partly offset by unfavorable freight and private-label product headwinds. Endless Assortment gross margin increased 90 basis points year over year due to improvement across the segment.
Key facts
- Updated 2026 gross profit margin guidance: 39.3% - 39.6% (previously 39.2% - 39.5%) source
- Second quarter 2026 gross profit margin: 39.5%, up 100 basis points versus Q2 2025 source
- Second quarter 2026 gross profit: $1,984 million source
- IEEPA tariff refunds reduced cost of goods sold by $43 million in Q2 2026 source
- High-Touch Solutions - N.A. Q2 2026 gross profit margin: 41.8%, up 80 basis points versus prior year quarter source
- Endless Assortment Q2 2026 gross profit margin increased by 90 basis points versus Q2 2025 source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| margin | positive | realized | +1.0% | Second quarter 2026 gross profit margin: 39.5%, up 100 basis points versus Q2 2025 |
| margin | positive | realized | +0.9% | Endless Assortment Q2 2026 gross profit margin increased by 90 basis points versus Q2 2025 |
| operating_income | positive | realized | +0.9% | IEEPA tariff refunds reduced cost of goods sold by $43 million in Q2 2026 |
| margin | positive | realized | +0.8% | High-Touch Solutions - N.A. Q2 2026 gross profit margin: 41.8%, up 80 basis points versus prior year quarter |
| margin | positive | probable | +0.1% | Updated 2026 gross profit margin guidance: 39.3% - 39.6% (previously 39.2% - 39.5%) |