A broad-line distributor of maintenance, repair, and operating (MRO) supplies—the motors, fasteners, tools, and parts that keep factories and facilities running. Grainger serves over four million customers across North America and Japan, selling roughly two million products through its High-Touch Solutions arm and online platforms like Zoro and MonotaRO. Founded in Chicago in 1927 by electrical engineer William Wallace Grainger, the company grew out of a reliable supply of electric motors, and its very first catalog was a pocket-sized pamphlet called the MotorBook.
Grainger's Q2 operating margin hits 16.1% as tariff refunds and volume growth lift earnings 19%.
Grainger's reached its highest Q2 level in at least five years. rose 10.3% to $5.0 billion and climbed 20.5% to $12.01, driven by volume growth across both segments and a tariff refund benefit that expanded . The business is accelerating, but the tariff benefit is a one-time lift that will not repeat.
Key takeaways
Consolidated expanded 1.2 percentage points to 16.1%, as a 10.3% increase to $5.0 billion outpaced a 9.3% rise in SG&A expenses.
rose 1.0 percentage point to 39.5%, helped by tariff refund benefits in the High-Touch Solutions N.A. and favorable discount activity and product mix in the Endless Assortment segment.
High-Touch Solutions N.A. daily grew 11.7%, while Endless Assortment grew 20.6%, with management attributing the broad-based volume growth to both segments.
Section summaries
Management's Discussion and Analysis
Q2 2026 net sales rose 10% to $5.0B, with operating earnings up 19% driven by volume growth and tariff refund benefits.
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Total company daily, increased 13.7% in Q2 2026, led by 11.7% growth in High-Touch Solutions N.A. and 20.6% in Endless Assortment.
Consolidated margin expanded 100 to 39.5%, helped by tariff refund benefits in High-Touch Solutions N.A. and favorable discount activity and product mix in Endless Assortment.
of $12.01 included a benefit from a lower in the prior-year period that did not repeat, meaning the 20.5% increase was driven entirely by the 19.0% rise in .
for the first half reached $1,183 million, up from $1,023 million a year ago, as higher more than offset needs.
What changed
The negative price-cost spread and impacts that compressed High-Touch Solutions N.A. through 2025 did not repeat in Q2 2026; instead, the benefited from tariff refunds, lifting consolidated gross margin to 39.5% from 38.5% a year ago.
High-Touch Solutions N.A. sales growth accelerated to 10.5% in Q1 and remained strong in Q2, confirming that the 's return to growth after a flat 2025 is not a one-quarter event, though the Q2 result was aided by the non-recurring tariff refund.
Endless Assortment's operating earnings growth, which reached 45.8% in Q1 2026, continued to be driven by MonotaRO's enterprise customer growth, with daily sales up 20.6% in Q2, sustaining the trajectory flagged in earlier filings.
SG&A growth of 9.3% in Q2 2026 accelerated from the 6.3% pace in Q1 2026, driven by higher payroll and benefits, partially offset by savings from the U.K. market exit completed in late 2025.
What to watch
Whether High-Touch Solutions N.A. can hold near 39.5% once the Q2 2026 tariff refund benefit annualizes, and whether the 's underlying price-cost spread remains favorable.
Whether Endless Assortment's 20.6% daily sales growth rate is sustainable as the laps the 15% growth reported in Q2 2025, and whether segment operating earnings growth continues to be disclosed.
The pace of share repurchases for the remainder of 2026 against the $950 million–$1.05 billion target, and whether the company resumes buybacks at a level that supports growth after a quarter of prioritizing liquidity.
Whether the 9.3% SG&A growth rate, driven by payroll and benefits, can be brought back below growth, or whether it continues to accelerate and pressures the 16.1% .
expenses grew 9.3% to $1,177 million, primarily from higher payroll and benefits, partially offset by savings from the U.K. market exit completed in late 2025.
rose 20.5% to $12.01, supported by a 19% increase in operating earnings and a lower benefit in the prior-year period that did not repeat.
reached $1,183 million for the first half of 2026, up from $1,023 million, driven by higher , while available liquidity stood at $1.8 billion at quarter-end.
Quantitative and Qualitative Disclosures About Market Risk
Grainger’s primary market risk exposures include changes in foreign currency exchange rates and commodity price risks. There were no material changes to the Company’s market risk from those described in Part II, Item 7A: Quantitative and Qualitative Disclosures About Market Risk…
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Grainger’s primary market risk exposures include changes in foreign currency exchange rates and commodity price risks.
There were no material changes to the Company’s market risk from those described in Part II, Item 7A: Quantitative and Qualitative Disclosures About Market Risk in the Company's 2025 Form 10-K.
For a description of the Company’s legal proceedings, see Note 7 of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1: Financial Information of this Form 10-Q.
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For a description of the Company’s legal proceedings, see Note 7 of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1: Financial Information of this Form 10-Q.