Company: GGG
Filing Date: 2025-07-23
Form Type: 10-Q
Source: 0000042888-25-000025
Chunk: 49

Company: GRACO INC
Filing Date: 2025-07-23
Form: 10-Q
Item: Item 2
Chunk 49
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.4 2 %Net Earnings127.6 133.0 (4)%251.7 255.2 (1)%Net Earnings, adjusted (1)126.9 132.2 (4)%247.3 244.8 1 %Diluted Net Earnings per Common Share$0.76 $0.77 (1)%$1.48 $1.48 — %Diluted Net Earnings per Common Share, adjusted (1)$0.75 $0.77 (3)%$1.45 $1.42 2 %

(1) See below for a reconciliation of adjusted non-GAAP financial measures to GAAP.

Net sales for the second quarter increased 3 percent from the comparable period last year. Incremental sales from acquired operations contributed 6 percentage points of sales growth. EMEA and Asia Pacific sales growth was partially offset by a decrease in the Americas.

The gross profit margin rate declined approximately 2 percentage points for the second quarter due to higher product costs, including $4 million of increased tariff costs, and the unfavorable effects of lower margin rates from acquired operations.

Total operating expenses for the second quarter increased 2 percentage points but were flat as a percentage of sales. 

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Table of Contents

Other non-operating income decreased $3 million for the second quarter, primarily due to $5 million of exchange losses on net liabilities of certain foreign operations and lower interest income.

Net earnings decreased 4 percent for the second quarter due to a lower gross margin rate and lower non-operating income.

Excluding the impacts of excess tax benefits from stock option exercises presents a more consistent basis for comparison of financial results. A calculation of the non-GAAP adjusted measurements of income taxes, effective income tax rate, net earnings and diluted earnings per share follows (in millions except per share amounts):

Three Months EndedSix Months EndedJune 27,2025June 28,2024June 27,2025June 28,2024Earnings before income taxes$158.2 $165.2 $309.7 $305.5 Income taxes, as reported$30.6 $32.2 $58.0 $50.3 Excess tax benefit from option exercises0.7 0.8 4.4 10.4 Income taxes, adjusted$31.3 $33.0 $62.4 $60.