GRACO reports Q1 sales rise 2% on acquisition contributions

Graco Inc. (NYSE: GGG) reported first-quarter net sales increased 2% to $540.1 million from $528.3 million in the prior year period, according to a company statement. The Minneapolis-based fluid handling equipment manufacturer said acquisitions contributed 5 percentage points of growth while currency translation added 3 percentage points, offset by a 6 percentage point organic decline.

Operating earnings decreased 4% to $137.8 million from $144.0 million in the first quarter of 2025. Net earnings fell 5% to $118.5 million, or $0.70 per diluted share, compared to $124.1 million, or $0.72 per diluted share, in the year-ago quarter.

The company's gross margin rate declined due to unfavorable product and channel mix and lower margin rates from acquired operations. Price increases largely offset $7 million in incremental tariff costs during the quarter.

By segment, Contractor sales rose 2% to $260.0 million with operating earnings flat. Industrial segment sales increased 4% to $240.4 million, though operating earnings declined 5%. The Expansion Markets segment saw sales drop 4% to $39.7 million with operating earnings down 4%.

Chief Executive Officer Mark Sheahan said demand in infrastructure-related markets remained strong while residential construction activity stayed soft. Industrial segment results reflected timing of powder finishing systems and project activity completion.

The company maintained its 2026 revenue guidance of low single-digit organic growth on a constant-currency basis and mid-single-digit growth including expected acquisition contributions. Organic order backlog increased 13% from the end of 2025, driven by improved order rates as the quarter progressed.

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