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Its chief financial officer said Grainger continues to face inflationary pressures tied to the U.S. and Israel's war with Iran. Specifically, she noted rising freight and product costs.

Grainger sales grew double digits amid headwinds in its fiscal Q2 2026, which ended June 30.

CEO D.G. Macpherson told analysts on Grainger’s Q2 earnings call that despite ongoing uncertainty, sales remain strong in its High-Touch and Endless Assortment segments.

“While the external landscape remains fluid, we’re confident in our ability to manage the impact or remain committed to our pricing tenets,” Macpherson said. “We also saw continued strength in the demand environment during the period with most end markets showing acceleration.”

He credited growth in part to accounts in the U.S. and Canada. In Canada, specifically, Grainger has improved service, reset its sales force and revamped its website, Macpherson said. And in the U.S., Grainger opened a distribution center in Oregon that began operating in July.

Grainger sales in Q2 2026

In its fiscal Q2 2026, Grainger sales reached $5.02 billion. That marked 10.3% growth over its fiscal Q2 2025, when sales reached $4.55 billion.

Sales from Grainger’s High-Touch Solutions segment in North America increased 11.9% year over year in Q2. The company attributed that growth to an increase in volume growth and price inflation. It also said it passed on tariff costs.

Meanwhile, sales from Grainger’s Endless Assortment segment increased 13.5% in Q2. Within that segment, Zoro U.S. sales increased 18.4% on a daily basis. In Japan, MonotaRo grew 24% in local constant currency.

Chief financial officer Deidra Merriwether described Grainger’s gross margin as a “healthy” 39.5%. She noted that Grainger “recognized a 90-basis-point tailwind from IEEPA [International Emergency Economic Powers Act] tariff refunds” on products it directly imported.

Grainger’s operating margin in Q2 was 16.1%, a 1.2% increase from the prior-year period.

“From an end market perspective, MRO market demand continued to improve in the period,” Merriwether said. “For Grainger specifically, we saw a broad-based acceleration across nearly all customer groups with strong contributions from manufacturing and government sectors. This was alongside outsized growth in our contractor and retail end markets, which are both benefiting from data center activities as new facilities are stood up.”

She noted that Zoro “saw strong growth” from its core B2B customers. It also saw higher customer retention rates in its marketing program, she said.

Geopolitical impacts and Grainger’s 2026 outlook

Merriwether said Grainger realized the majority of its benefit from IEEPA tariff refunds in Q2. It recognized them as a reduction to the cost of goods that it sold. It expects a “small remainder” to continue benefiting the company in the next couple of quarters, she said.

“When considering these refunds, it’s important to remember that they relate only to tariffs paid directly by Grainger and represent only a small portion of the mini tariff costs that we faced over the last 1.5 years,” Merriwether said. “Importantly, these refund proceeds and the price pass on these SKUs only partially offset the costs we absorbed in 2025 related to IEEPA.”

Separately, she said, Grainger continues to face “inflationary pressures from rising freight and product costs due to the conflict in the Middle East.” Specifically, Merriwether noted rising freight and product costs.

When Grainger’s Q2 ended, the price of a barrel of crude oil was around $70. By the time it reported earnings, that price was about $75. In April, though, the price reached about $113. For comparison, it was about $66 when the U.S. and Israel’s war with Iran began, according to historical data from Trading Economics.

“As these pressures persist, we expect to take additional pricing actions in September to help mitigate this impact,” she said. “Our September pricing actions will also reflect adjustments related to the recent Section 232 tariff modifications in addition to new Section 301 tariffs, though we anticipate that these tariff-related changes will be minimal.”

Merriwether said Grainger is raising its guidance to reflect strong sales momentum and the impact of tariff refunds. It expects sales growth between 11.5% and 13%, she said.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s update on Grainger sales.

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