ggg-20260327

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 27, 2026

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 001-09249


GRACO INC.
(Exact name of registrant as specified in its charter)


Minnesota						41-0285640
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)


88 - 11th Avenue N.E.
Minneapolis,	Minnesota	55413
(Address of principal executive offices)		(Zip Code)


(612)			623-6000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1.00 per share	GGG	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

165,968,177 shares of the Registrant’s Common Stock, $1.00 par value, were outstanding as of April 8, 2026.

TABLE OF CONTENTS

Page

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements

Consolidated Statements of Earnings

Consolidated Statements of Comprehensive Income

Consolidated Balance Sheets

Consolidated Statements of Cash Flows

Consolidated Statements of Shareholders' Equity

Notes to Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

PART II - OTHER INFORMATION

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 5.

Other Information

Item 6.


	Three Months Ended
	March 27, 2026		March 28, 2025
Net Sales	$	540,144	$	528,284
Cost of products sold	259,503		250,551
Gross Profit	280,641		277,733
Product development	19,974		19,375
Selling, marketing and distribution	70,019		67,211
General and administrative	52,873		47,134


Operating Earnings	137,775		144,013

Interest expense	836		713
Other (income) expense, net	(3,149)		(8,174)
Earnings Before Income Taxes	140,088		151,474
Income taxes	21,582		27,373
Net Earnings	$	118,506	$	124,101
Net Earnings per Common Share
Basic	$	0.72	$	0.74
Diluted	$	0.70	$	0.72


	March 27, 2026		December 26, 2025
ASSETS
Current Assets
Cash and cash equivalents	$	712,171	$	624,083
Accounts receivable, less allowances of $6,500 and $6,000	390,367		393,753
Inventories	407,647		401,138
Other current assets	56,380		52,907
Total current assets	1,566,565		1,471,881
Property, Plant and Equipment, net	745,561		755,064
Goodwill	580,958		585,304
Other Intangible Assets, net	292,636		303,851
Operating Lease Assets	24,708		26,073
Deferred Income Taxes	29,001		35,975
Other Assets	95,339		96,122
Total Assets	$	3,334,768	$	3,274,270
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Notes payable to banks	$	26,189	$	23,072
Current portion of long-term debt	1,122		1,624
Trade accounts payable	84,807		78,573
Salaries and incentives	52,589		73,420
Dividends payable	48,882		48,705
Other current liabilities	226,994		241,867
Total current liabilities	440,583		467,261

Retirement Benefits and Deferred Compensation	86,046		87,179
Operating Lease Liabilities	17,505		18,131
Deferred Income Taxes	37,481		36,708
Other Non-current Liabilities	10,755		11,060

Shareholders’ Equity
Common stock	165,907		165,150
Additional paid-in-capital	1,039,336		994,566
Retained earnings	1,511,649		1,456,710
Accumulated other comprehensive income	25,506		37,505
Total shareholders’ equity	2,742,398		2,653,931
Total Liabilities and Shareholders’ Equity	$	3,334,768	$	3,274,270


	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Total
Three Months Ended March 27, 2026
Balance, December 26, 2025	$	165,150	$	994,566	$	1,456,710	$	37,505	$	2,653,931
Shares issued	946		39,454		—		—		40,400
Shares repurchased	(189)		(1,141)		(14,625)		—		(15,955)
Stock compensation cost	—		6,999		—		—		6,999
Restricted stock issued	—		(542)		—		—		(542)
Net earnings	—		—		118,506		—		118,506
Dividends declared ($0.295 per share)	—		—		(48,942)		—		(48,942)
Other comprehensive loss	—		—		—		(11,999)		(11,999)
Balance, March 27, 2026	$	165,907	$	1,039,336	$	1,511,649	$	25,506	$	2,742,398






















Three Months Ended March 28, 2025
Balance, December 27, 2024	$	169,394	$	955,051	$	1,509,264	$	(49,574)	$	2,584,135
Shares issued	622		27,045		—		—		27,667
Shares repurchased	(2,798)		(15,774)		(219,517)		—		(238,089)
Stock compensation cost	—		6,333		—		—		6,333
Net earnings	—		—		124,101		—		124,101
Dividends declared ($0.275 per share)	—		—		(46,393)		—		(46,393)
Other comprehensive income	—		—		—		19,966		19,966
Balance, March 28, 2025	$	167,218	$	972,655	$	1,367,455	$	(29,608)	$	2,477,720


Expansion Markets
Net Sales	$	39,751	$	41,599
Cost of products sold	19,172		20,163
Gross Profit	20,579		21,436
Operating expenses	10,935		11,371
Expansion Markets Operating Earnings	$	9,644	$	10,065

Reportable Segment Operating Earnings Total	$	147,686	$	151,590
Unallocated corporate expense	9,911		7,577


Operating Earnings	137,775		144,013
Interest expense	836		713
Other (income) expense, net	(3,149)		(8,174)
Earnings Before Income Taxes	$	140,088	$	151,474


	March 27, 2026		December 26, 2025
Long-lived Assets
United States	$	592,718	$	600,011
Other countries	152,843		155,053
Total	$	745,561	$	755,064


	March 27, 2026		December 26, 2025
Finished products and components	$	181,081	$	175,684
Products and components in various stages of completion	133,070		123,866
Raw materials and purchased components	211,302		216,559
Subtotal	525,453		516,109
Reduction to LIFO cost	(117,806)		(114,971)
Total	$	407,647	$	401,138


	Option Shares	Weighted Average Exercise Price		Options Exercisable	Weighted Average Exercise Price
Outstanding, December 26, 2025	9,786	$	61.38	7,017	$	52.94
Granted	921	93.43
Exercised	(804)	38.94
Canceled	(37)	82.49
Outstanding, March 27, 2026	9,866	$	66.07	7,054	$	57.48


	Finite Life						Indefinite Life
	Customer Relationships		Patents and Proprietary Technology		Trademarks, Trade Names and Other		Trade Names		Total
As of March 27, 2026
Cost	$	201,562	$	40,271	$	4,786	$	107,034	$	353,653
Accumulated amortization	(60,190)		(8,109)		(2,663)		—		(70,962)
Foreign currency translation	1,745		1,352		19		6,829		9,945
Book value	$	143,117	$	33,514	$	2,142	$	113,863	$	292,636
Weighted average life in years	14		10		3		N/A


As of December 26, 2025
Cost	$	316,962	$	44,304	$	4,786	$	107,034	$	473,086
Accumulated amortization	(165,150)		(10,649)		(2,027)		—		(177,826)
Foreign currency translation	(877)		1,464		54		7,950		8,591
Book value	$	150,935	$	35,119	$	2,813	$	114,984	$	303,851
Weighted average life in years	13		10		2		N/A


	2026 (Remainder)		2027		2028		2029		2030		Thereafter
Estimated Amortization Expense	$	17,068	$	19,671	$	17,551	$	16,954	$	16,176	$	91,353


	Three Months Ended
	March 27, 2026		March 28, 2025
Cash Flows From Operating Activities
Net Earnings	$	118,506	$	124,101
Adjustments to reconcile net earnings to net cash provided by operating activities
Depreciation and amortization	28,602		24,708
Deferred income taxes	8,324		3,200
Share-based compensation	7,549		7,353
Gain on sale of building	—		(4,737)


Change in
Accounts receivable	596		(6,258)
Inventories	(7,389)		(2,789)
Trade accounts payable	4,396		17,673
Salaries and incentives	(21,086)		(7,997)
Retirement benefits and deferred compensation	(612)		(648)
Other accrued liabilities	(9,692)		(23,243)
Other	(8,946)		(5,947)
Net cash provided by operating activities	120,248		125,416
Cash Flows From Investing Activities
Property, plant and equipment additions	(12,141)		(10,597)
Proceeds from sale of building	—		10,749
Acquisition of businesses, net of cash acquired	—		(10,454)
Other	81		(184)
Net cash used in investing activities	(12,060)		(10,486)
Cash Flows From Financing Activities
Borrowings (payments) on short-term lines of credit, net	2,792		(1,075)

Payments on long-term debt and lines of credit	(476)		—

Common stock issued	47,350		31,574
Common stock repurchased	(11,755)		(238,089)
Taxes paid related to net share settlement of equity awards	(7,492)		(3,907)
Cash dividends paid	(48,767)		(46,586)
Net cash used in financing activities	(18,348)		(258,083)
Effect of exchange rate changes on cash	(1,752)		3,955
Net increase (decrease) in cash and cash equivalents	88,088		(139,198)
Cash and Cash Equivalents


	Three Months Ended
	March 27, 2026		March 28, 2025
Pension Benefits
Service cost	$	1,166	$	1,253
Interest cost	2,648		2,143
Expected return on assets	(3,275)		(2,903)
Amortization and other	(78)		164
Net periodic benefit cost	$	461	$	657
Postretirement Medical
Service cost	$	75	$	75
Interest cost	225		200

Net periodic benefit cost	$	300	$	275


	Three Months Ended
	March 27, 2026		March 28, 2025
Balance, beginning	$	5,264	$	4,973
Additions charged to costs and expenses	644		231
Deductions from reserves (1)	(297)		(2)
Other (deductions) additions (2)	(6)		158
Balance, ending	$	5,605	$	5,360


	March 27, 2026		December 26, 2025
Accrued self-insurance retentions	$	8,044	$	8,013
Accrued warranty and service liabilities	20,954		21,103
Accrued trade promotions	6,522		7,511
Payable for employee stock purchases	4,471		15,546
Customer advances and deferred revenue	91,669		93,995
Income taxes payable	21,554		15,493
Tax payable, other	17,563		14,693
Right of return refund liability	14,440		15,055
Operating lease liabilities, current	8,074		8,769


Other	33,703		41,689
Total	$	226,994	$	241,867


	Contractor		Industrial		Expansion Markets		Total
Balance, December 26, 2025	$	238,575	$	275,263	$	71,466	$	585,304
Adjustments from business acquisitions	(170)		254		—		84

Foreign currency translation	(2,744)		(1,686)		—		(4,430)
Balance, March 27, 2026	$	235,661	$	273,831	$	71,466	$	580,958


Balance, December 26, 2025	$	21,103

Charged to expense	2,273
Margin on parts sales reversed	962
Reductions for claims settled	(3,384)
Balance, March 27, 2026	$	20,954


	Level	March 27, 2026		December 26, 2025
Assets
Cash surrender value of life insurance	2	$	27,682	$	28,893
Forward exchange contracts	2	118		—
Total assets at fair value		$	27,800	$	28,893
Liabilities
Contingent consideration	3	$	1,617	$	1,649
Deferred compensation	2	8,357		8,336
Forward exchange contracts	2	—		268
Total liabilities at fair value		$	9,974	$	10,253


	Three Months Ended
	Mar 27, 2026		Mar 28, 2025		% Change
Net Sales	$	540.1	$	528.3	2	%
Operating Earnings	137.8		144.0		(4)	%

Net Earnings	118.5		124.1		(5)	%
Net Earnings, adjusted (1)	111.8		120.5		(7)	%
Diluted Net Earnings per Common Share	$	0.70	$	0.72	(3)	%
Diluted Net Earnings per Common Share, adjusted (1)	$	0.66	$	0.70	(6)	%


	Three Months
	Volume and Price	Acquisitions	Currency	Total
Americas	(1)%	4%	0%	3%
EMEA	(14)%	9%	9%	4%
Asia Pacific	(8)%	0%	3%	(5)%
Consolidated	(6)%	5%	3%	2%

SEC Form 10-Q filed by Graco Inc.