Graco Inc. reported a net earnings increase of 2% for the first quarter of 2025, reaching $124.1 million compared to $122.2 million in the same period last year. The company's net sales rose by 7% to $528.3 million, up from $492.2 million in the prior year. This growth was attributed to a 6% contribution from acquired operations, while currency translation rates negatively impacted sales growth by 2%. Operating earnings also saw an 8% increase, totaling $144 million, driven by effective management of operating expenses despite a decline in gross margin rates.
In terms of operational changes, Graco completed the acquisition of Corob S.p.A. in November 2024 for €230 million, which is expected to enhance its market position. The company has restructured its business into three reportable segments: Contractor, Industrial, and Expansion Markets, with the Industrial segment now including a newly formed Industrial Division. This strategic reorganization aims to streamline operations and improve efficiency across its product lines.
Geographically, Graco's sales in the Americas increased to $121 million, while sales in the EMEA region rose to $121 million, reflecting a strong performance across these markets. The Asia Pacific region also contributed positively, with sales reaching $84.1 million. The company reported a total of 46% of its sales coming from international markets, highlighting its global reach. The contractor segment, which includes a significant portion of Graco's business, reported net sales of $255 million, up from $230 million, although operating margins in this segment decreased due to lower margin rates from acquired operations.
Graco's cash flow from operating activities increased to $125.4 million, up from $118.9 million in the previous year, primarily due to lower performance-based incentive payouts. However, the company experienced a net cash decrease of $139.2 million in cash and cash equivalents, ending the quarter with $536.1 million. The company has maintained its full-year revenue guidance, anticipating low-single-digit growth on an organic constant currency basis, while acknowledging potential impacts from evolving global trade policies and tariffs, particularly concerning its operations in China. Graco remains focused on executing its growth strategies and investing in its business to navigate these challenges effectively.
About GRACO INC
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