Company: GGG
Filing Date: 2025-10-22
Form Type: 10-Q
Source: 0000042888-25-000047
Chunk: 15

Company: GRACO INC
Filing Date: 2025-10-22
Form: 10-Q
Item: Item 1
Chunk 15
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 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 for the third quarter decreased 5 percent and included a non-cash gain of $14 million from the reduction in fair value of acquisition-related contingent consideration. 

16

Net earnings increased 13 percent for the third quarter. Adjusted net earnings were flat, as higher sales offset increased operating expenses and lower non-operating income.

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

Three Months EndedNine Months EndedSeptember 26,2025September