Graco Inc.

What they do

Graco designs, manufactures and markets systems and equipment used to move, measure, mix, control, dispense and spray fluid and powder materials. It focuses on difficult-to-handle materials with high viscosities, abrasive or corrosive properties, and multi-component materials requiring precise ratio control. Equipment is sold into manufacturing, processing, construction and maintenance industries through third-party distribution and direct sales, with marketing and product design in the Americas, EMEA and Asia Pacific.

Revenue drivers

• Contractor segment — The Contractor Division, unchanged as a reportable segment, sells spray and dispensing equipment for construction and maintenance applications; in 2025 the segment absorbed an acquisition adding mixing, shaking and automated material handling equipment.
• Industrial segment — Formed effective January 1, 2025 by combining the former Industrial and Lubrication Equipment Divisions with the Process Transfer Equipment business into a new global Industrial Division, plus the unchanged Powder Division; a 2025 acquisition added automated dosing systems for powder and liquid applications.
• Expansion Markets segment — Consists of the Expansion Markets Division housing the environmental, semiconductor, high-pressure valves and electric motors businesses, together with select future ventures and acquisitions.
• Geographic mix — In 2025, the Americas represented approximately 60% of total sales, EMEA approximately 24% and Asia Pacific approximately 16%.

Recent performance

Second quarter 2026 net sales were $590.6 million, up from $571.8 million in the second quarter of 2025. First half 2026 net sales were $1,130.7 million versus $1,100.1 million a year earlier. Q2 2026 gross profit was $316.9 million and operating earnings were $175.1 million, compared with $299.5 million and $157.5 million respectively in the prior-year quarter. Q2 2026 net earnings were $144.9 million, or $0.87 diluted per share, versus $127.6 million, or $0.76 diluted, a year earlier. First half 2026 net earnings were $263.4 million, or $1.58 diluted per share.

Strategy

Graco states its long-term growth strategy rests on investment in new products, targeted acquisitions and strong manufacturing, engineering and customer service capabilities, coordinated across geographic regions. In 2025 it completed two acquisitions, one in the Contractor segment and one in the Industrial segment, adding mixing, shaking and automated material handling equipment and automated dosing systems for powder and liquid applications. The company also seeks to expand into new geographic markets by adding commercial and technical resources and third-party distribution in growing and emerging markets. Effective January 1, 2025 it reorganized into three reportable segments — Contractor, Industrial and Expansion Markets — with the Expansion Markets Division intended to house select future ventures and acquisitions.

Risks

• Economic and demand cyclicality — Demand depends on worldwide commercial and industrial activity, and an economic downturn, recession, sustained inflationary pressures or financial market turmoil may depress demand across major geographies and markets.
• Currency translation — A significant number of routine transactions are in foreign currencies, and exchange-rate volatility can affect sales, material costs, earnings and the valuation of foreign-currency assets; a majority of manufacturing and cost structure is based in the U.S.
• Channel credit and purchasing capacity — If participants in Graco's sales channel, including end users, face unavailable credit, unfavorable credit terms or depressed demand, their reduced ability or willingness to purchase would adversely affect net sales and earnings.
• Financing covenants — An economic downturn may affect Graco's ability to satisfy the financial covenants in the terms of its financing arrangements.

Outlook

The provided filing excerpts do not include management's forward-looking guidance or specific outlook commentary beyond the stated long-term growth strategies. Management's described priorities remain product innovation, targeted acquisitions, geographic expansion via commercial and technical resources and third-party distribution, and integration of acquired businesses. No forward revenue or earnings targets are given in the source material.