Graco (GGG) Q3 2025 Earnings Call Transcript

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Mon, January 26, 2026 astatine 9:38 AM CST 41 min read

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Thursday, October 23, 2025 astatine 11 a.m. ET

• President and Chief Executive Officer — Mark Sheahan

• Chief Financial Officer and Treasurer — Christopher Knutson

• Executive Vice President, Corporate Development and General Counsel — David Lowe

Christopher Knutson: Good morning, everyone, and convey you for joining our call. I'm present contiguous with Mark Sheahan and David Lowe. I volition supply a little overview of our quarterly results earlier turning the telephone implicit to Mark for much commentary. Yesterday, Graco reported 3rd 4th income of $543 million, an summation of 5% from the aforesaid 4th past year. Excluding acquisitions, which contributed 6% maturation and currency translation, which contributed different 1% growth, integrated income declined 2% successful the quarter. Reported nett net accrued 13% to $138 cardinal oregon $0.82 per diluted share. During the quarter, we recognized a $14 cardinal noncash summation from a simplification successful the just worth of contingent information related to past year's acquisition of Corob.

This summation is an unallocated firm operating expense. Excluding the interaction of excess taxation benefits from banal enactment exercises and this contingent information just worth gain, adjusted non-GAAP nett net was $0.73 per diluted share, an summation of 3%. The gross borderline complaint was level compared to the aforesaid 4th past year. The effects of our targeted interim pricing actions started to beryllium realized during the quarter, offsetting higher merchandise costs resulting from little mill volume, unfavorable effects of little borderline rates from acquired operations and incremental tariffs. Tariffs affected merchandise costs by $5 cardinal successful the quarter, resulting successful a 100 ground constituent diminution successful the gross borderline rate. Operating expenses decreased $6 cardinal oregon 5% successful the quarter.

The diminution was driven chiefly by the designation of the noncash summation related to the just worth contingent information reduction. Excluding this gain, full operating expenses accrued $8 cardinal oregon 6%, driven by incremental expenses from acquisitions of $10 million. Excluding expenses of acquired operations, operating expenses declined $2 million. Adjusted operating net accrued $5 cardinal oregon 3% during the quarter. Operating net arsenic a percent of income was 28% for the 4th and accordant with the aforesaid play past year. The adjusted effectual taxation complaint was 20%, which is accordant with our expected afloat twelvemonth taxation complaint of 19.5% to 20.5% connected an as-adjusted basis.

Cash provided by operations totaled $487 cardinal for the year, an summation of $51 cardinal oregon 12%. Improved inventory absorption from consolidating operations nether One Graco and little income and earnings-based inducement payments drove the increase. Cash provided by operations arsenic a percent of adjusted nett net was 146% for the 4th and 132% for the year-to-date. Significant year-to-date uses of currency see stock repurchases of 4.4 cardinal shares totaling $361 million, dividends of $138 cardinal and superior expenditures of $34 million. These currency uses were offset by stock issuances of $32 million. A fewer comments arsenic we look guardant to the remainder of the year.