Company: GGG
Filing Date: 2025-10-22
Form Type: 10-Q
Source: 0000042888-25-000047
Chunk: 39

Company: GRACO INC
Filing Date: 2025-10-22
Form: 10-Q
Item: Item 8
Chunk 39
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 risks associated with trade conflicts between the U.S. and its trading partners. Escalating global trade conflicts have resulted in, and their further escalation could result in additional inflationary costs to manufacture, assemble and export our products. We may be required to further increase prices to our customers, which may reduce demand, or if we do not or are unable to increase prices without reducing demand, we will experience reduced profitability. Continued geopolitical issues may cause customers outside of the U.S. seeking to source products from local suppliers. We continue to analyze the impact of these global tariffs on our business and we are working to mitigate the impact of tariffs through pricing and sourcing strategies. We cannot be sure these strategies will effectively mitigate the impact of these costs and if we are unable to do so or if demand for our products otherwise decreases, we expect these new tariffs will have a material impact on our results of operations in fiscal year 2025. 

Consolidated Results

A summary of financial results follows (in millions except per share amounts):

 Three Months Ended    Nine Months Ended Sep 26,2025Sep 27,2024% ChangeSep 26,2025Sep 27,2024% ChangeNet Sales$543.4 $519.2 5 %$1,643.4 $1,564.6 5 %Operating Earnings164.7 145.7 13 %466.2 440.1 6 %Net Earnings137.6 122.2 13 %389.4 377.4 3 %Net Earnings, adjusted (1)122.8 122.2 — %370.2 367.1 1 %Diluted Net Earnings per Common Share$0.82 $0.71 15 %$2.30 $2.19 5 %Diluted Net Earnings per Common Share, adjusted (1)$0.73 $0.71 3 %$2.18 $2.13 2 %

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

Net sales for the third quarter increased 5 percent. Incremental sales from acquired operations contributed 6 percentage points of sales growth.

The gross profit margin rate was flat for the third quarter as price realization and favorable product and channel mix offset higher product costs and the unfavorable effects of lower margin rates from acquired operations.

Operating expenses