Graco Inc. reported a solid financial performance for the second quarter of 2026, with net sales reaching $590.6 million, a 3% increase from $571.8 million in the same period last year. For the first half of the fiscal year, the company generated $1.13 billion in sales, up from $1.10 billion in the prior year. The increase in revenue was attributed to a combination of acquired operations contributing 3 percentage points to sales growth and favorable currency translation effects adding another percentage point. However, organic sales experienced a slight decline of 1 percentage point, primarily due to timing issues related to finishing system sales in the Industrial segment.
Operating earnings for the second quarter rose by 11% to $175.1 million, compared to $157.5 million in the previous year. Adjusted operating earnings also increased by 11%, driven by a higher gross margin rate, which benefited from lower operating expenses and $9 million in tariff refunds. Net earnings for the quarter were reported at $144.9 million, a 14% increase from $127.6 million in the prior year, while diluted earnings per share rose to $0.87 from $0.76, reflecting a 14% increase.
In terms of strategic developments, Graco announced its intention to acquire Valco Melton, a global provider of adhesive application and quality assurance systems, for $447 million. This acquisition is expected to close in the third quarter of 2026 and will be funded with cash on hand. The company continues to focus on expanding its product offerings and market reach, particularly in the Contractor, Industrial, and Expansion Markets segments, which collectively reported increased sales.
Operationally, Graco's customer base and geographic reach remained strong, with significant sales contributions from the Americas, which accounted for $323.2 million in the second quarter. The company also reported a decrease in cash and cash equivalents to $507.6 million as of June 26, 2026, down from $624.1 million at the end of the previous fiscal year. The total assets of the company decreased to $3.13 billion from $3.27 billion, while total liabilities also saw a slight reduction.
Looking ahead, Graco's management anticipates low single-digit organic sales growth for the remainder of 2026, with mid-single-digit growth expected when including contributions from acquisitions. The company projects third-quarter sales to be between $580 million and $600 million, excluding the impact of the Valco Melton acquisition. Graco's outlook reflects confidence in ongoing demand trends and order activity across its markets, despite potential challenges from market conditions and operational adjustments.
About GRACO INC
Graco Inc. is a global manufacturer specializing in fluid and coating systems for industrial and commercial applications. Its core segments—Contractor, Industrial, and Process—offer equipment for moving, measuring, mixing, and spraying fluids and powders across diverse markets such as construction, automotive, aerospace, and energy. The company emphasizes innovation, quality, and customer service, leveraging manufacturing, engineering, and strategic acquisitions to drive growth worldwide.
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