W.W. Grainger Inc. reported higher revenue in 2025 but lower profits as the industrial distributor said it is relying more heavily on data, digital ordering tools and artificial intelligence (AI) to win market share in a slow-growth maintenance, repair and operations (MRO) market.
Grainger posted Q4 sales of $4.425 billion, up from $4.233 billion a year earlier. For its full fiscal 2025, sales reached $17.942 billion, up from $17.168 billion in 2024. Fourth-quarter net earnings fell to $451 million from $475 million, and full-year net earnings declined to $1.706 billion from $1.909 billion. Earnings per share declined in both periods.
On the earnings call, CEO D.G. Macpherson said the company’s competitive advantage increasingly comes from how it uses data and technology.
“Over the last several years, we have invested heavily to build market-leading data and technology capabilities,” Macpherson said. “These data assets underpin our five strategic growth engines and fuel our ability to gain share within our high-touch solutions segment.”
How Grainger grew sales in Q4 2025
Macpherson told analysts that customer ordering behavior has shifted materially toward connected procurement channels.
“Everything direct connection to customers has become more of our share,” he said. “Actually, ePro is the biggest share we have at this point. Closer to 40% at this point. … Most of our contract customers now have a combination of ePro and KeepStock on-site.”
These integrations, he said, create stickier customer relationships while producing cleaner demand signals Grainger can use to refine pricing, availability and service decisions.
Executives described how AI and machine learning are moving deeper into daily operations across sales, marketing and merchandising.
“We saw strong usage of our new SellerInsights platform in 2025,” Macpherson said. “In 2026, we will leverage AI in this platform to deliver actionable insights, identify new customer contacts, and strengthen leader coaching opportunities. We are just scratching the surface of our potential in this area.”
He also said machine learning is helping optimize marketing investment “at the SKU level based on our knowledge of relative pricing, product availability and customer lifetime value.”
Grainger expanded its high-touch assortment by a net 85,000 SKUs in 2025, the largest net increase in a decade. Executives said the initiative focused not only on adding products but improving how those products are organized, searched, and presented online.
“Our category reviews focus on improving product search, organization, and content,” Macpherson said, noting expansion into factory automation products such as sensors and controls and a broader offer aimed at data center customers.
Increasing fulfillment capacity
Grainger is expanding distribution capacity to support its next-day fulfillment model. It expects a new Northwest facility outside Portland to begin full outbound operations later in 2026. It also has slated a Houston facility to begin inbound operations in 2027. In Japan, subsidiary MonotaRO Co. Ltd. is building a highly automated distribution center scheduled to open in 2028 that will nearly double its shipping capacity in the country.
Senior vice president and chief financial officer Deidra Merriwether said Grainger has passed through most tariff-related cost increases to customers.
“We have essentially passed through all known tariffs,” Merriwether said, adding that future tariff actions or rollbacks are not reflected in current guidance.
Executives noted that while price helped revenue, underlying MRO market demand remained muted in 2025, weighing on profitability.
Grainger outlook for 2026
For 2026, Grainger forecast revenue between $18.7 billion and $19.1 billion and daily organic constant-currency sales growth of 6.5% to 9%.
Macpherson said the company’s strategy in a slow-growth market is to use its digital capabilities, data assets, and customer integrations to take share.
“The vast majority of our contract customers now have a combination of ePro and KeepStock on-site,” he said. “That’s a big part of what we do in terms of creating stickiness and creating value for our customers.”
As distributors face rising costs and uneven demand, Grainger is betting that deeper digital integration with customers — powered by better data and AI-assisted decision tools — will be as important as warehouses and trucks in determining who wins market share.
Check back for more earnings reports. Here’s last quarter’s update on Grainger sales.
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