GWW · 10-Q · 2026Q2 · Full report
Gross Margin Drivers
W.W. GRAINGER, INC. · 2026-08-04 · Importance 54 · Surprise 40 · No source text
Six-month gross profit increased 12.0% to $3,880 million, and consolidated gross margin expanded 60 basis points to 39.7%. High-Touch Solutions N.A. gross profit rose 12.7% to $3,259 million, with margin increasing 50 basis points to 42.2% due primarily to tariff refund benefits, partly offset by higher freight costs. Endless Assortment gross profit increased 19.0% to $621 million, and margin expanded 70 basis points to 30.4% because of favorable discount activity at Zoro and product mix. Second-quarter consolidated gross margin increased 100 basis points to 39.5%, while High-Touch Solutions N.A. and Endless Assortment margins increased 80 and 90 basis points, respectively.
Key facts
- High-Touch Solutions N.A. six months gross profit: $3,259 million, increased $366 million or 12.7% and gross profit margin of 42.2% increased 50 basis points; increase primarily due to tariff refund benefits recognized in 2026 partially offset by increased freight costs. source
- Endless Assortment six months gross profit: $621 million, increased $99 million or 19%, and gross profit margin of 30.4% increased 70 basis points compared to the same period in 2025; increase primarily due to favorable discount activity at Zoro and favorable product mix. source
- Gross profit for the three months ended June 30, 2026: $1,984 million, increased $229 million or 13%, and gross profit margin of 39.5% increased 100 basis points versus prior year. source
- High-Touch Solutions N.A. gross profit for the three months ended June 30, 2026: $1,660 million, increased $206 million or 14%, and gross profit margin of 41.8% increased 80 basis points versus prior year. source
- Endless Assortment gross profit for the three months ended June 30, 2026: $324 million, increased $47 million or 17%, and gross profit margin of 30.7% increased 90 basis points compared to the same period in 2025. source
- Gross profit for the six months ended June 30, 2026: $3,880 million, increased $415 million or 12%, and gross profit margin of 39.7% increased 60 basis points versus prior year. source
- Endless Assortment gross profit increase was primarily due to favorable discount activity at Zoro and favorable product mix across the segment. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| margin | positive | realized | +1.0% | Gross profit for the three months ended June 30, 2026: $1,984 million, increased $229 million or 13%, and gross profit margin of 39.5%… |
| margin | positive | realized | +0.9% | Endless Assortment gross profit for the three months ended June 30, 2026: $324 million, increased $47 million or 17%, and gross profit… |
| margin | positive | realized | +0.8% | High-Touch Solutions N.A. gross profit for the three months ended June 30, 2026: $1,660 million, increased $206 million or 14%, and gross… |
| margin | positive | realized | +0.7% | Endless Assortment six months gross profit: $621 million, increased $99 million or 19%, and gross profit margin of 30.4% increased 70… |
| margin | positive | realized | +0.6% | Gross profit for the six months ended June 30, 2026: $3,880 million, increased $415 million or 12%, and gross profit margin of 39.7%… |
| margin | positive | realized | +0.5% | High-Touch Solutions N.A. six months gross profit: $3,259 million, increased $366 million or 12.7% and gross profit margin of 42.2%… |