Company: GGG
Filing Date: 2025-04-23
Form Type: 10-Q
Source: 0000042888-25-000014
Chunk: 14

Company: GRACO INC
Filing Date: 2025-04-23
Form: 10-Q
Item: Item 1
Chunk 14
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 acquired operations and higher product costs.    

17

Operating Expenses

Total operating expenses for the quarter were flat compared to last year, including approximately $10 million (7 percentage points) of incremental expenses from acquired operations, which were offset by lower product development spending and unallocated corporate expense (primarily driven by lower share-based compensation).  

Other (Income) Expense

Other income for the first quarter included a $5 million gain from the sale of a former manufacturing and distribution facility in Switzerland. Excluding the facility sale, other income decreased  $5 million for the quarter from the comparable period last year mostly due to $3 million of incremental exchange losses on net assets of foreign operations and lower interest income of $1 million.

Income Taxes

The effective income tax rate was 18 percent for the first quarter, up approximately 5 percentage points from the comparable period last year. The increase was due primarily to a decrease in excess tax benefits related to stock option exercises.   

Segment Results

Certain measurements of segment operations compared to last year are summarized below:

Contractor Segment

The following table presents net sales and operating earnings as a percentage of sales for the Contractor segment 

(dollars in millions):

 Three Months Ended    March 28,2025March 29,2024Net SalesAmericas$175.9 $165.5 EMEA54.5 46.4 Asia Pacific24.6 18.1 Total$255.0 $230.0 Operating earnings as a percentage of net sales24 %29 %

The following table presents the components of net sales change by geographic region for the Contractor segment:

Three MonthsVolume and PriceAcquisitionsCurrencyTotalAmericas1%6%(1)%6%EMEA(9)%30%(4)%17%Asia Pacific1%40%(6)%35%Segment Total(1)%13%(1)%11%

Contractor segment sales growth for the first quarter included $30 million from acquired operations. The operating margin rate for this segment decreased 5 percentage points compared to the same period last year, including 3 percentage points from the unfavorable effects of lower margin rates of acquired operations, 1 percentage point from adverse impacts of currency translation and 1 percentage point related to price-cost dynamics.  

18

Industrial Segment

The following table presents net sales and operating earnings as a percentage of sales for the Industrial segment 

(dollars in millions):

 Three Months Ended   March 28,2025March 29,2024Net SalesAmeric