Company: GGG
Filing Date: 2025-04-23
Form Type: 10-Q
Source: 0000042888-25-000014
Chunk: 32

Company: GRACO INC
Filing Date: 2025-04-23
Form: 10-Q
Item: Item 8
Chunk 32
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, adjusted (1)120.5 112.6 7 %Diluted Net Earnings per Common Share$0.72 $0.71 1 %Diluted Net Earnings per Common Share, adjusted (1)$0.70 $0.65 8 %

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

Net sales for the first quarter increased 7 percent from the comparable period last year. The effect of changes in currency translation rates reduced sales growth for the quarter by 2 percentage points. Sales from acquired operations contributed 6 percentage points of growth.

Operating expense leverage offset a lower gross margin rate resulting in an 8 percent increase in operating earnings for the first quarter from the comparable period last year.

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Net earnings for the first quarter increased 2 percent compared to last year, as increased operating earnings and other income more than offset lower excess tax benefits from stock option exercises.

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 EndedMarch 28,2025March 29,2024Earnings before income taxes$151.5 $140.3 Income taxes, as reported$27.4 $18.1 Excess tax benefit from option exercises3.6 9.6 Income taxes, adjusted$31.0 $27.7 Effective income tax rate   As reported18.1 %12.9 %   Adjusted20.5 %19.8 %Net Earnings, as reported$124.1 $122.2 Excess tax benefit from option exercises(3.6)(9.6)Net Earnings, adjusted$120.5 $112.6 Weighted Average Diluted Shares171.6 172.4 Diluted Earnings per Share   As reported$0.72 $0.71    Adjusted$0.70 $0.65 

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The following table presents an overview of components of net earnings as a percentage of net sales:

Three Months Ended   March 28,2025March 29,2024Net Sales100.0 %100.0 %Cost of products sold47.4 45.