W.W. Grainger Inc.: 10-K Risk Factor Changes

The following stock price performance graph compares the cumulative total return on an investment in Grainger common stock with the cumulative total return of an investment in each of the Dow Jones US Industrial Suppliers Total Stock Market Index, which includes Grainger, and the S&P 500 Stock Index. It covers the period commencing December 31, 2020 and ending December 31, 2025. The graph assumes that the value for the investment in Grainger common stock and in each index was $100 on December 31, 2020, and that all dividends were reinvested. December 31,202020212022202320242025W.W. Grainger, Inc.$100 $129 $140 $211 $270 $261 Dow Jones US Industrial Suppliers Total Stock Market Index100 137 121 179 208 231 S&P 500 Stock Index100 129 105 133 166 196 Item 6: [Reserved] 26 26 26 26 26 26 Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations Objective The following Management’s Discussion and Analysis (MD&A) of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and financial condition of W.W. Grainger, Inc. (Grainger or Company) as it is viewed by the Company. The following discussion should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included in this Form 10-K, and can be found in MD&A of Financial Condition and Results of Operations in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Percentage figures included in this section have not been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this section may vary slightly from those obtained by performing the same calculations using the figures in the Company's Consolidated Financial Statements or in the associated text. Overview W.W. Grainger, Inc. is a broad line distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America, Japan and the U.K. Grainger uses its high-touch solutions and endless assortment businesses to serve customers worldwide, who rely on Grainger for products and services that enable them to run safe, sustainable and productive operations.

The following stock price performance graph compares the cumulative total return on an investment in Grainger common stock with the cumulative total return of an investment in each of the Dow Jones US Industrial Suppliers Total Stock Market Index, which includes Grainger, and the S&P 500 Stock Index. It covers the period commencing December 31, 2019 and ending December 31, 2024. The graph assumes that the value for the investment in Grainger common stock and in each index was $100 on December 31, 2019, and that all dividends were reinvested. December 31,201920202021202220232024W.W. Grainger, Inc.$100 $123 $158 $172 $259 $332 Dow Jones US Industrial Suppliers Total Stock Market Index100 125 170 151 223 260 S&P 500 Stock Index100 118 152 125 158 197 Item 6: [Reserved] 26 26 26 26 26 26 Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations Objective The following Management’s Discussion and Analysis (MD&A) of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and financial condition of W.W. Grainger, Inc. (Grainger or Company) as it is viewed by the Company. The following discussion should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023. Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 are not included in this Form 10-K, and can be found in MD&A of Financial Condition and Results of Operations in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Percentage figures included in this section have not been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this section may vary slightly from those obtained by performing the same calculations using the figures in the Company's Consolidated Financial Statements or in the associated text. Overview W.W. Grainger, Inc. is a broad line distributor of maintenance, repair and operating (MRO) products and services with operations primarily in North America, Japan and the United Kingdom (U.K.). Grainger uses its high-touch solutions and endless assortment businesses to serve customers worldwide, who rely on Grainger for products and services that enable them to run safe, sustainable and productive operations.

The following table provides information relating to Grainger's repurchase of common stock during the three months ended December 31, 2025: PeriodTotal Number of Shares Purchased (1) (4)Average Price Paid Per Share (2)Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3)Maximum Number ofShares That May Yet be Purchased Under thePlans or ProgramsOct. 1 – Oct. 31100,717$961.43100,7173,293,362 sharesNov. 1 – Nov. 3072,129$943.5672,1103,221,252 sharesDec. 1 – Dec. 3178,943$1,004.2178,6603,142,592 sharesTotal251,789251,487 (1)There were no shares withheld to satisfy tax withholding obligations.(2)Average price paid per share excludes commissions of $0.02 per share paid.(3)Purchases were made pursuant to a share repurchase program approved by Grainger's Board of Directors and announced on April 24, 2024 (2024 Program). The 2024 Program authorized the Company to repurchase an aggregate amount of up to five million shares in the open market, through privately negotiated transactions and block transactions, pursuant to a trading plan or otherwise with no expiration date.(4)The difference of 302 shares between the Total Number of Shares Purchased and the Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs represents shares purchased by the administrator and record keeper of the W.W. Grainger, Inc. Retirement Savings Plan for the benefit of the team members who participate in the plan. Total Number of Shares Purchased (1) (4) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) (1)There were no shares withheld to satisfy tax withholding obligations. (2)Average price paid per share excludes commissions of $0.02 per share paid. (3)Purchases were made pursuant to a share repurchase program approved by Grainger's Board of Directors and announced on April 24, 2024 (2024 Program). The 2024 Program authorized the Company to repurchase an aggregate amount of up to five million shares in the open market, through privately negotiated transactions and block transactions, pursuant to a trading plan or otherwise with no expiration date. (4)The difference of 302 shares between the Total Number of Shares Purchased and the Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs represents shares purchased by the administrator and record keeper of the W.W. Grainger, Inc. Retirement Savings Plan for the benefit of the team members who participate in the plan. Total Number of Shares Purchased (1) (4) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) (1)There were no shares withheld to satisfy tax withholding obligations. (2)Average price paid per share excludes commissions of $0.02 per share paid. (3)Purchases were made pursuant to a share repurchase program approved by Grainger's Board of Directors and announced on April 24, 2024 (2024 Program). The 2024 Program authorized the Company to repurchase an aggregate amount of up to five million shares in the open market, through privately negotiated transactions and block transactions, pursuant to a trading plan or otherwise with no expiration date. (4)The difference of 302 shares between the Total Number of Shares Purchased and the Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs represents shares purchased by the administrator and record keeper of the W.W. Grainger, Inc. Retirement Savings Plan for the benefit of the team members who participate in the plan. 25 25 25 25 25 25

The following table provides information relating to Grainger's repurchase of common stock during the three months ended December 31, 2024: PeriodTotal Number of Shares Purchased (A) (D)Average Price Paid Per Share (B)Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (C)Maximum Number ofShares That May Yet be Purchased Under thePlans or ProgramsOct. 1 – Oct. 3111,339$1,023.9711,3324,570,888 sharesNov. 1 – Nov. 30148,340$1,190.32148,3404,422,548 sharesDec. 1 – Dec. 31241,646$1,132.63241,4474,181,101 sharesTotal401,325401,119 Total Number of Shares Purchased (A) (D) Average Price Paid Per Share (B) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (C) Total Number of Shares Purchased (A) (D) Average Price Paid Per Share (B) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (C) (A)There were no shares withheld to satisfy tax withholding obligations. (B)Average price paid per share excludes commissions of $0.02 per share paid. (C)Prior to April 28, 2024, purchases were made pursuant to a share repurchase program approved by Grainger's Board of Directors and announced on April 28, 2021 (2021 Program). On April 24, 2024, Grainger's Board of Directors authorized a program for the Company to repurchase an aggregate amount of up to five million shares in the open market, through privately negotiated transactions and block transactions, pursuant to a trading plan or otherwise (2024 Program) with no expiration date. In authorizing the 2024 Program, the Board of Directors terminated the 2021 Program. (D)The difference of 206 shares between the Total Number of Shares Purchased and the Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs represents shares purchased by the administrator and record keeper of the W.W. Grainger, Inc. Retirement Savings Plan for the benefit of the team members who participate in the plan. 25 25 25 25 25 25

Grainger utilizes non-GAAP measures where it believes it will assist users of its financial statements in understanding its business. Non-GAAP measures exclude certain items affecting comparability that can affect the year-over-year assessment of operating results and other one-time items that do not directly reflect ongoing operating results. The Company adjusts its reported net sales when there are differences in the number of U.S. selling days relative to the prior year period and also excludes the impact on reported net sales due to changes in foreign currency exchange rate fluctuations and results of certain divested or closed businesses. Adjusted results including adjusted SG&A, adjusted operating earnings, adjusted net earnings and adjusted diluted EPS exclude certain non-recurring items, including restructuring charges, asset impairments, gains and losses associated with business divestitures and other non-recurring, infrequent or unusual gains and losses from the Company’s most directly comparable reported U.S. generally accepted accounting principles (GAAP) results. The Company believes its non-GAAP measures provide meaningful information to assist investors in understanding financial results and assessing prospects for future performance as they provide a better baseline for analyzing the ongoing performance of its businesses by excluding items that may not be indicative of core operating results. Grainger’s non-GAAP financial measures should be considered in addition to, and not as a replacement for or as a superior measure to its most directly comparable GAAP measures and may not be comparable to similarly titled measures reported by other companies. Exiting Market in the United Kingdom In 2025, Grainger performed an assessment of its businesses in the United Kingdom (U.K.) and made the decision to exit the U.K. market in order to concentrate efforts where it can deliver the greatest long-term impact. On December 17, 2025, Grainger completed the divestiture of the Cromwell business. The Company recorded a loss of $186 million in SG&A expenses related to the sale. There was no tax benefit as a result of this loss. Additionally, the Company completed the closure of Zoro U.K. in its Endless Assortment segment during the fourth quarter of 2025. Expenses related to the closure of $10 million were also recorded in SG&A expenses. There was no tax benefit as a result of the recognition of these expenses. The Company does not expect the exit from the U.K. market to have a 31 31 31 31 31 31 material effect on its future results of operations. See Note 2 of the Notes to the Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K for more information on the sale of the Cromwell business. Restructuring Actions In the second quarter of 2024, the Company recorded restructuring charges in SG&A expenses of $15 million in the High-Touch Solutions N.A. segment and $1 million in Grainger's Other businesses. The charges consisted primarily of team member severance and benefit costs. The Company does not expect these actions to have a material effect on its future results of operations. The following table provides a reconciliation of reported net sales growth from the prior year period in accordance with GAAP to the Company's non-GAAP measures daily net sales and daily, organic constant currency net sales for the twelve months ended December 31, 2025 (in millions of dollars): For the Years Ended December 31, High-Touch Solutions N.A.Endless AssortmentTotal Company(1)2025% Change(2)2025% Change(2)2025% Change(2)Reported net sales$13,993 2.0 %$3,625 15.7 %$17,942 4.5 % Daily impact(3) 0.2 0.4 0.1 0.5 0.3 0.4 Daily net sales54.9 2.4 14.2 16.2 70.4 4.9 Foreign currency exchange(4)0.1 0.2 (0.1)(0.7)— — Business divestiture(5) — — — 0.1 — — Daily, organic constant currency net sales$55.0 2.6 %$14.1 15.6 %$70.4 4.9 %2024% Change(2)2024% Change(2)2024% Change(2)Reported net sales$13,720 3.4 %$3,134 7.5 %$17,168 4.2 % Daily impact(3) (0.4)(0.8)(0.1)(0.9)(0.5)(0.8)Daily net sales53.2 2.6 12.1 6.6 66.5 3.4 Foreign currency exchange(4)0.1 0.1 0.6 5.0 0.6 0.9 Business divestiture(6) 0.3 0.5 — — 0.3 0.4 Daily, organic constant currency net sales$53.6 3.2 %$12.7 11.6 %67.4 4.7 %(1)Total Company includes Other. Grainger's businesses reported in Other do not meet the criteria of a reportable segment.(2)Compared to net sales in the prior year period.(3)Excludes the impact on net sales due to the difference in U.S. selling days relative to the prior year period on a daily basis. There were 255 and 256 sales days in the full year 2025 and 2024, respectively. (4)Excludes the impact on net sales due to year-over-year foreign currency exchange rate fluctuations on a daily basis.(5)Excludes the net sales results of the divested Cromwell business and closed Zoro U.K. business in the prior year period on a daily basis.(6)Excludes the net sales results of the divested E&R business in 2023 on a daily basis. Total Company(1) % Change(2) % Change(2) % Change(2) Daily impact(3) Foreign currency exchange(4) Business divestiture(5) % Change(2) % Change(2) % Change(2) Daily impact(3) Foreign currency exchange(4) Business divestiture(6) (1)Total Company includes Other. Grainger's businesses reported in Other do not meet the criteria of a reportable segment. (2)Compared to net sales in the prior year period. (3)Excludes the impact on net sales due to the difference in U.S. selling days relative to the prior year period on a daily basis. There were 255 and 256 sales days in the full year 2025 and 2024, respectively. (4)Excludes the impact on net sales due to year-over-year foreign currency exchange rate fluctuations on a daily basis. (5)Excludes the net sales results of the divested Cromwell business and closed Zoro U.K. business in the prior year period on a daily basis. (6)Excludes the net sales results of the divested E&R business in 2023 on a daily basis. Total Company(1) % Change(2) % Change(2) % Change(2) Daily impact(3) Foreign currency exchange(4) Business divestiture(5) % Change(2) % Change(2) % Change(2) Daily impact(3) Foreign currency exchange(4) Business divestiture(6) (1)Total Company includes Other. Grainger's businesses reported in Other do not meet the criteria of a reportable segment. (2)Compared to net sales in the prior year period. (3)Excludes the impact on net sales due to the difference in U.S. selling days relative to the prior year period on a daily basis. There were 255 and 256 sales days in the full year 2025 and 2024, respectively. (4)Excludes the impact on net sales due to year-over-year foreign currency exchange rate fluctuations on a daily basis. (5)Excludes the net sales results of the divested Cromwell business and closed Zoro U.K. business in the prior year period on a daily basis. (6)Excludes the net sales results of the divested E&R business in 2023 on a daily basis. The following tables provide a reconciliation of reported SG&A expenses, operating earnings, net earnings attributable to W.W. Grainger, Inc. and diluted earnings per share determined in accordance with GAAP to the Company's non-GAAP measures adjusted SG&A, adjusted operating earnings, adjusted net earnings attributable to W.W. Grainger, Inc. and adjusted diluted earnings per share for the twelve months ended December 31, 2025 and 2024 (in millions of dollars): 32 32 32 32 32 32 Twelve Months Ended December 31, 2025ReportedAdjustment(1)Adjusted% Change Reported(3)% Change Adjusted(3)Selling, general and administrative expensesHigh-Touch Solutions N.A.$3,478 $— $3,478 Endless Assortment740 (10)730 Other(4) 296 (186)110 Selling, general and administrative expenses$4,514 $(196)$4,318 9.5%5.2%EarningsHigh-Touch Solutions N.A.$2,354 $— $2,354 Endless Assortment345 10 355 Other(4) (204)186 (18)Operating earnings$2,495 $196 $2,691 (5.4)%1.4%Total other expense – net(65)— (65)Income tax provision(5)(622)— (622)Net earnings$1,808 $196 $2,004 Noncontrolling interest(102)— (102)Net earnings attributable to W.W. Grainger, Inc. $1,706 $196 $1,902 (10.6)%(1.0)%Diluted earnings per share$35.40 $4.08 $39.48 (8.6)%1.3%Twelve Months Ended December 31, 2024ReportedAdjustment(2)Adjusted% Change Reported(3) % Change Adjusted(3)Selling, general and administrative expensesHigh-Touch Solutions N.A.$3,356 $(15)$3,341 Endless Assortment663 — 663 Other(4)102 (1)101 Selling, general and administrative expenses$4,121 $(16)$4,105 4.8%5.1%EarningsHigh-Touch Solutions N.A.$2,385 $15 $2,400 Endless Assortment260 — 260 Other(4)(8)1 (7)Operating earnings$2,637 $16 $2,653 2.8%2.4%Total other expense – net(53)— (53)Income tax provision(5)(595)(4)(599)Net earnings$1,989 $12 $2,001 Noncontrolling interest(80)— (80)Net earnings attributable to W.W. Grainger, Inc.$1,909 $12 $1,921 4.4%3.8%Diluted earnings per share$38.71 $0.25 $38.96 6.8%6.2%(1)Reflects the loss on sale of the Cromwell business and closure of Zoro U.K. announced in the third quarter of 2025 and completed in the fourth quarter of 2025.(2)Reflects restructuring costs incurred in the second quarter of 2024.(3)Compared to the reported and adjusted results of the prior year period.(4)Grainger's businesses reported in Other do not meet the criteria of a reportable segment.(5)Grainger's reported and adjusted effective tax rates were 25.6% and 23.7% for the twelve months ended December 31, 2025, respectively. The twelve months ended December 31, 2024 reflect a tax benefit related to the restructuring costs incurred in the second quarter of 2024. Adjustment(1) % Change Reported(3) % Change Adjusted(3) Other(4) Other(4) Income tax provision(5) Adjustment(2) % Change Reported(3) % Change Adjusted(3) Other(4) Other(4) Income tax provision(5) (1)Reflects the loss on sale of the Cromwell business and closure of Zoro U.K. announced in the third quarter of 2025 and completed in the fourth quarter of 2025. (2)Reflects restructuring costs incurred in the second quarter of 2024. (3)Compared to the reported and adjusted results of the prior year period. (4)Grainger's businesses reported in Other do not meet the criteria of a reportable segment. (5)Grainger's reported and adjusted effective tax rates were 25.6% and 23.7% for the twelve months ended December 31, 2025, respectively. The twelve months ended December 31, 2024 reflect a tax benefit related to the restructuring costs incurred in the second quarter of 2024. Adjustment(1) % Change Reported(3) % Change Adjusted(3) Other(4) Other(4) Income tax provision(5) Adjustment(2) % Change Reported(3) % Change Adjusted(3) Other(4) Other(4) Income tax provision(5) (1)Reflects the loss on sale of the Cromwell business and closure of Zoro U.K. announced in the third quarter of 2025 and completed in the fourth quarter of 2025. (2)Reflects restructuring costs incurred in the second quarter of 2024. (3)Compared to the reported and adjusted results of the prior year period. (4)Grainger's businesses reported in Other do not meet the criteria of a reportable segment. (5)Grainger's reported and adjusted effective tax rates were 25.6% and 23.7% for the twelve months ended December 31, 2025, respectively. The twelve months ended December 31, 2024 reflect a tax benefit related to the restructuring costs incurred in the second quarter of 2024. 33 33 33 33 33 33

Grainger utilizes non-GAAP measures where it believes it will assist users of its financial statements in understanding its business. Non-GAAP measures exclude certain items affecting comparability that can affect the year-over-year assessment of operating results and other one-time items that do not directly reflect ongoing operating results. The Company adjusts its reported net sales when there are differences in the number of U.S. selling days relative to the prior year period and also excludes the impact on reported net sales due to changes in foreign currency exchange rate fluctuations and results of certain divested businesses. Adjusted results including adjusted SG&A, adjusted operating earnings, adjusted net earnings and adjusted diluted EPS exclude certain non-recurring items, including restructuring charges, asset impairments, gains and losses associated with business divestitures and other non-recurring, infrequent or unusual gains and losses from the Company’s most directly comparable reported U.S. generally accepted accounting principles (GAAP) results. The Company believes its non-GAAP measures provide meaningful information to assist investors in understanding financial results and assessing prospects for future performance as they provide a better baseline for analyzing the ongoing performance of its businesses by excluding items that may not be indicative of core operating results. Grainger’s non-GAAP financial measures should be considered in addition to, and not as a replacement for or as a superior measure to its most directly comparable GAAP measures and may not be comparable to similarly titled measures reported by other companies. Restructuring Actions In the second quarter of 2024, the Company recorded restructuring charges in SG&A of $15 million in the High-Touch Solutions N.A. segment and $1 million in Grainger's Other businesses. The charges consisted primarily of team member severance and benefit costs. The Company does not expect these actions to have a material effect on its future results of operations. 30 30 30 30 30 30 Business Divestitures In the fourth quarter of 2023, Grainger divested E & R Industrial Sales, Inc. (E&R) and recorded a one-time pre-tax loss on the divestiture of $26 million in SG&A. The Company does not expect this business exit to have a material effect on its future results of operations. The following table provides a reconciliation of reported net sales growth from the prior year period in accordance with GAAP to the Company's non-GAAP measures daily net sales and daily, organic constant currency net sales for the twelve months ended December 31, 2024 (in millions of dollars): For the Years Ended December 31, High-Touch Solutions N.A.Endless AssortmentTotal Company(1)2024% Change(2)2024% Change(2)2024% Change(2)Reported net sales$13,720 3.4 %$3,134 7.5 %$17,168 4.2 % Daily impact(3) (0.4)(0.8)(0.1)(0.9)(0.5)(0.8)Daily net sales53.2 2.6 12.1 6.6 66.5 3.4 Foreign currency exchange(4)0.1 0.1 0.6 5.0 0.6 0.9 Business divestiture(5) 0.3 0.5 — — 0.3 0.4 Daily, organic constant currency net sales$53.6 3.2 %$12.7 11.6 %$67.4 4.7 %2023% Change(2)2023% Change(2)2023% Change(2)Reported net sales$13,267 8.9 %$2,916 4.7 %$16,478 8.2 % Daily impact(3) 0.2 0.4 — 0.4 0.3 0.4 Daily net sales52.4 9.3 11.5 5.1 65.2 8.6 Foreign currency exchange(4)— — 0.6 5.3 0.6 0.9 Business divestiture(5) — 0.1 — — — — Daily, organic constant currency net sales$52.4 9.4 %$12.1 10.4 %65.8 9.5 %(1) Total Company includes Other. Grainger's businesses reported in Other do not meet the criteria of a reportable segment.(2) Compared to net sales in the prior year period.(3) Excludes the impact on net sales due to the difference in U.S. selling days relative to the prior year period on a daily basis. There were 256 and 254 sales days in the full year 2024 and 2023, respectively. (4) Excludes the impact on net sales due to year-over-year foreign currency exchange rate fluctuations on a daily basis.(5) Excludes the net sales results of the divested E&R business in the prior year period on a daily basis. Total Company(1) % Change(2) % Change(2) % Change(2) Daily impact(3) Foreign currency exchange(4) Business divestiture(5) % Change(2) % Change(2) % Change(2) Daily impact(3) Foreign currency exchange(4) Business divestiture(5) (1) Total Company includes Other. Grainger's businesses reported in Other do not meet the criteria of a reportable segment. (2) Compared to net sales in the prior year period. (3) Excludes the impact on net sales due to the difference in U.S. selling days relative to the prior year period on a daily basis. There were 256 and 254 sales days in the full year 2024 and 2023, respectively. (4) Excludes the impact on net sales due to year-over-year foreign currency exchange rate fluctuations on a daily basis. (5) Excludes the net sales results of the divested E&R business in the prior year period on a daily basis. Total Company(1) % Change(2) % Change(2) % Change(2) Daily impact(3) Foreign currency exchange(4) Business divestiture(5) % Change(2) % Change(2) % Change(2) Daily impact(3) Foreign currency exchange(4) Business divestiture(5) (1) Total Company includes Other. Grainger's businesses reported in Other do not meet the criteria of a reportable segment. (2) Compared to net sales in the prior year period. (3) Excludes the impact on net sales due to the difference in U.S. selling days relative to the prior year period on a daily basis. There were 256 and 254 sales days in the full year 2024 and 2023, respectively. (4) Excludes the impact on net sales due to year-over-year foreign currency exchange rate fluctuations on a daily basis. (5) Excludes the net sales results of the divested E&R business in the prior year period on a daily basis. The following tables provide a reconciliation of reported SG&A expenses, operating earnings, net earnings attributable to W.W. Grainger, Inc. and diluted earnings per share determined in accordance with GAAP to the Company's non-GAAP measures adjusted SG&A, adjusted operating earnings, adjusted net earnings attributable to W.W. Grainger, Inc. and adjusted diluted earnings per share for the twelve months ended December 31, 2024 and 2023 (in millions of dollars): 31 31 31 31 31 31 Twelve Months Ended December 31, 2024ReportedAdjustment(1)Adjusted% Change Reported(2)% Change Adjusted(2)Selling, general and administrative expensesHigh-Touch Solutions N.A.$3,356 $(15)$3,341 Endless Assortment663 — 663 Other(3) 102 (1)101 Selling, general and administrative expenses$4,121 $(16)$4,105 4.8%5.1%EarningsHigh-Touch Solutions N.A.$2,385 $15 $2,400 Endless Assortment260 — 260 Other(3) (8)1 (7)Operating earnings$2,637 $16 $2,653 2.8%2.4%Total other expense – net(53)— (53)Income tax provision(4)(595)(4)(599)Net earnings$1,989 $12 $2,001 Noncontrolling interest(80)— (80)Net earnings attributable to W.W. Grainger, Inc. $1,909 $12 $1,921 4.4%3.8%Diluted earnings per share$38.71 $0.25 $38.96 6.8%6.2%Twelve Months Ended December 31, 2023ReportedAdjustment(1)Adjusted% Change Reported(2) % Change Adjusted(2)Selling, general and administrative expensesHigh-Touch Solutions N.A.$3,212 $(26)$3,186 Endless Assortment631 — 631 Other(3)88 — 88 Selling, general and administrative expenses$3,931 $(26)$3,905 8.2%6.8%EarningsHigh-Touch Solutions N.A.$2,334 $26 $2,360 Endless Assortment233 — 233 Other(3)(2)— (2)Operating earnings$2,565 $26 $2,591 15.8%18.1%Total other expense – net(65)— (65)Income tax provision(5)(597)(4)(601)Net earnings$1,903 $22 $1,925 Noncontrolling interest(74)— (74)Net earnings attributable to W.W. Grainger, Inc.$1,829 $22 $1,851 18.2%21.2%Diluted earnings per share$36.23 $0.44 $36.67 20.5%23.6%(1) Reflects restructuring costs incurred in the second quarter of 2024 and the loss on divestiture of E&R in the fourth quarter of 2023.(2) Compared to the reported and adjusted results of the prior year period.(3) Grainger's businesses reported in Other do not meet the criteria of a reportable segment.(4) Reflects a tax benefit related to the restructuring costs incurred in the second quarter of 2024. Grainger's reported and adjusted effective tax rates were 23.0% for the year ended December 31, 2024.(5) Reflects a one-time tax benefit recognized upon the divestiture of E&R in the fourth quarter of 2023. Grainger's reported and adjusted effective tax rates were 23.9% and 23.8%, respectively, for the year ended December 31, 2023. Adjustment(1) % Change Reported(2) % Change Adjusted(2) Other(3) Other(3) Income tax provision(4) Adjustment(1) % Change Reported(2) % Change Adjusted(2) Other(3) Other(3) Income tax provision(5) (1) Reflects restructuring costs incurred in the second quarter of 2024 and the loss on divestiture of E&R in the fourth quarter of 2023. (2) Compared to the reported and adjusted results of the prior year period. (3) Grainger's businesses reported in Other do not meet the criteria of a reportable segment. (4) Reflects a tax benefit related to the restructuring costs incurred in the second quarter of 2024. Grainger's reported and adjusted effective tax rates were 23.0% for the year ended December 31, 2024. (5) Reflects a one-time tax benefit recognized upon the divestiture of E&R in the fourth quarter of 2023. Grainger's reported and adjusted effective tax rates were 23.9% and 23.8%, respectively, for the year ended December 31, 2023. Adjustment(1) % Change Reported(2) % Change Adjusted(2) Other(3) Other(3) Income tax provision(4) Adjustment(1) % Change Reported(2) % Change Adjusted(2) Other(3) Other(3) Income tax provision(5) (1) Reflects restructuring costs incurred in the second quarter of 2024 and the loss on divestiture of E&R in the fourth quarter of 2023. (2) Compared to the reported and adjusted results of the prior year period. (3) Grainger's businesses reported in Other do not meet the criteria of a reportable segment. (4) Reflects a tax benefit related to the restructuring costs incurred in the second quarter of 2024. Grainger's reported and adjusted effective tax rates were 23.0% for the year ended December 31, 2024. (5) Reflects a one-time tax benefit recognized upon the divestiture of E&R in the fourth quarter of 2023. Grainger's reported and adjusted effective tax rates were 23.9% and 23.8%, respectively, for the year ended December 31, 2023. 32 32 32 32 32 32

In this section, Grainger utilizes non-GAAP measures where it believes it will assist users of its financial statements in understanding its business. Non-GAAP measures exclude certain items affecting comparability that can affect the year-over-year assessment of operating results and other one-time items that do not directly reflect ongoing operating results. As discussed in the "Non-GAAP Measures" section, we have adjusted the current year results to exclude one-time losses recorded in SG&A expenses of $186 million within Other and $10 million within Endless Assortment related to the Cromwell divestiture and closure of Zoro U.K., respectively. For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable U.S. generally accepted accounting principles (GAAP) measures, see "Non-GAAP Measures." The following table is included as an aid to understanding the changes in Grainger's Consolidated Statements of Earnings for the twelve months ended December 31, 2025 and 2024 (in millions of dollars except per share amounts): For the Years Ended December 31,% of Net Sales20252024% Change20252024Net sales(1)$17,942 $17,168 4.5 %100.0 %100.0 %Cost of goods sold10,933 10,410 5.0 60.9 60.6 Gross profit7,009 6,758 3.7 39.1 39.4 Selling, general and administrative expenses4,514 4,121 9.5 25.2 24.0 Operating earnings2,495 2,637 (5.4)13.9 15.4 Other expense – net65 53 22.6 0.3 0.3 Income tax provision622 595 4.5 3.5 3.5 Net earnings1,808 1,989 (9.1)10.1 11.6 Less noncontrolling interest102 80 27.5 0.6 0.5 Net earnings attributable to W.W. Grainger, Inc.$1,706 $1,909 (10.6)9.5 %11.1 %Diluted earnings per share:$35.40 $38.71 (8.6)%(1)For further information regarding the Company's disaggregated revenue, see Note 3 of the Notes to the Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. Net sales(1) (1)For further information regarding the Company's disaggregated revenue, see Note 3 of the Notes to the Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. Net sales(1) (1)For further information regarding the Company's disaggregated revenue, see Note 3 of the Notes to the Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. The following table is included as an aid to understanding the changes of Grainger's total net sales, daily net sales and daily, organic constant currency net sales from the prior period for the twelve months ended December 31, 2025 (in millions of dollars): For the Years Ended December 31,2025% Change(1)2024% Change(1)Net sales $17,942 4.5 %$17,168 4.2 %Daily net sales(2)$70.4 4.9 %$66.5 3.4 %Daily, organic constant currency net sales(2)$70.4 4.9 %$67.4 4.7 %(1)Calculated on the basis of prior year reported net sales for the years ended December 31, 2025 and 2024.(2)Daily net sales are adjusted for the difference in U.S. selling days relative to the prior year period. Daily, organic constant currency net sales are also adjusted to exclude the impact on net sales due to year-over-year foreign currency exchange rate fluctuations and excludes the results of Cromwell and Zoro U.K. in the comparable prior year period post date of divestiture and closure, respectively, for the year ended December 31, 2025. There were 255 and 256 sales days in the full year 2025 and 2024, respectively. For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measure, see below "Non-GAAP Measures." % Change(1) % Change(1) Daily net sales(2) Daily, organic constant currency net sales(2) (1)Calculated on the basis of prior year reported net sales for the years ended December 31, 2025 and 2024. (2)Daily net sales are adjusted for the difference in U.S. selling days relative to the prior year period. Daily, organic constant currency net sales are also adjusted to exclude the impact on net sales due to year-over-year foreign currency exchange rate fluctuations and excludes the results of Cromwell and Zoro U.K. in the comparable prior year period post date of divestiture and closure, respectively, for the year ended December 31, 2025. There were 255 and 256 sales days in the full year 2025 and 2024, respectively. For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measure, see below "Non-GAAP Measures." % Change(1) % Change(1) Daily net sales(2) Daily, organic constant currency net sales(2) (1)Calculated on the basis of prior year reported net sales for the years ended December 31, 2025 and 2024. (2)Daily net sales are adjusted for the difference in U.S. selling days relative to the prior year period. Daily, organic constant currency net sales are also adjusted to exclude the impact on net sales due to year-over-year foreign currency exchange rate fluctuations and excludes the results of Cromwell and Zoro U.K. in the comparable prior year period post date of divestiture and closure, respectively, for the year ended December 31, 2025. There were 255 and 256 sales days in the full year 2025 and 2024, respectively. For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measure, see below "Non-GAAP Measures." 29 29 29 29 29 29 Net sales of $17,942 million for the year ended December 31, 2025 increased $774 million, which represents a 5% increase on a reported and daily, organic constant currency basis compared to the same period in 2024. Both High-Touch Solutions N.A. and the Endless Assortment segments contributed to sales growth in 2025. For further discussion on the Company's net sales, see the Segment Analysis section below. Gross profit of $7,009 million for the year ended December 31, 2025 increased $251 million, or 4%, and gross profit margin of 39.1% decreased 30 basis points compared to the same period in 2024. For further discussion on the Company's gross profit, see the Segment Analysis section below. Selling, general, and administrative (SG&A) expenses of $4,514 million for the year ended December 31, 2025 increased $393 million, or 10%. Adjusted SG&A of $4,318 million increased $213 million, or 5%, due to higher payroll and benefits and marketing expenses in 2025. Operating earnings of $2,495 million for the year ended December 31, 2025 decreased $142 million, or 5%, compared to the same period in 2024. Adjusted operating earnings of $2,691 million increased $38 million, or 1%, compared to the same period in 2024. Income taxes of $622 million for the year ended December 31, 2025 increased $27 million, compared to the same period in 2024. Grainger's effective tax rates were 25.6% and 23.0% for the years ended December 31, 2025 and 2024, respectively. The adjusted effective tax rates were 23.7% and 23.0% for the twelve months ended December 31, 2025 and 2024, respectively. The Company's adjusted effective tax rate increase was primarily due to the prior year benefit from the expiration of a statue of limitation period in 2024. Diluted earnings per share was $35.40 for the year ended December 31, 2025, a decrease of 9% compared to $38.71 for the same period in 2024. Adjusted diluted earnings per share was $39.48 for the year ended December 31, 2025, an increase of 1% compared to $38.96 for the same period in 2024.

In this section, Grainger utilizes non-GAAP (as defined below) measures where it believes it will assist users of its financial statements in understanding its business. Non-GAAP measures exclude certain items affecting comparability that can affect the year-over-year assessment of operating results and other one-time items that do not directly reflect ongoing operating results. For further information regarding the Company's non-GAAP measures including reconciliations to the most directly comparable U.S. generally accepted accounting principles (GAAP) measures, see "Non-GAAP Measures." The following table is included as an aid to understanding the changes in Grainger's Consolidated Statements of Earnings for the twelve months ended December 31, 2024 and 2023 (in millions of dollars). For the Years Ended December 31,% of Net Sales20242023% Change20242023Net sales(1)$17,168 $16,478 4.2 %100.0 %100.0 %Cost of goods sold10,410 9,982 4.3 60.6 60.6 Gross profit6,758 6,496 4.0 39.4 39.4 Selling, general and administrative expenses4,121 3,931 4.8 24.0 23.8 Operating earnings2,637 2,565 2.8 15.4 15.6 Other expense – net53 65 (18.5)0.3 0.4 Income tax provision595 597 (0.3)3.5 3.6 Net earnings1,989 1,903 4.5 11.6 11.6 Less noncontrolling interest80 74 (8.1)0.5 0.5 Net earnings attributable to W.W. Grainger, Inc.$1,909 $1,829 4.4 11.1 %11.1 %Diluted earnings per share:$38.71 $36.23 6.8 %(1) For further information regarding the Company's disaggregated revenue, see Note 2 of the Notes to the Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. Net sales(1) (1) For further information regarding the Company's disaggregated revenue, see Note 2 of the Notes to the Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. Net sales(1) (1) For further information regarding the Company's disaggregated revenue, see Note 2 of the Notes to the Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. The following table is included as an aid to understanding the changes of Grainger's total net sales, daily net sales and daily organic constant currency net sales from the prior period for the twelve months ended December 31, 2024 (in millions of dollars): For the Years Ended December 31,2024% Change(1)2023% Change(1)Net sales $17,168 4.2 %$16,478 8.2 %Daily net sales(2)$66.5 3.4 %$65.2 8.6 %Daily, organic constant currency net sales(2)$67.4 4.7 %$65.8 9.5 %(1) Calculated on the basis of prior year reported net sales for the years ended December 31, 2024 and 2023.(2) Daily net sales are adjusted for the difference in U.S. selling days relative to the prior year period. Daily, organic constant currency net sales are also adjusted to exclude the impact on net sales due to year-over-year foreign currency exchange rate fluctuations and the prior year period results of E&R divested in the fourth quarter of 2023. There were 256 and 254 sales days in the full year 2024 and 2023, respectively. For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measure, see below "Non-GAAP Measures." % Change(1) % Change(1) Daily net sales(2) Daily, organic constant currency net sales(2) (1) Calculated on the basis of prior year reported net sales for the years ended December 31, 2024 and 2023. (2) Daily net sales are adjusted for the difference in U.S. selling days relative to the prior year period. Daily, organic constant currency net sales are also adjusted to exclude the impact on net sales due to year-over-year foreign currency exchange rate fluctuations and the prior year period results of E&R divested in the fourth quarter of 2023. There were 256 and 254 sales days in the full year 2024 and 2023, respectively. For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measure, see below "Non-GAAP Measures." % Change(1) % Change(1) Daily net sales(2) Daily, organic constant currency net sales(2) (1) Calculated on the basis of prior year reported net sales for the years ended December 31, 2024 and 2023. (2) Daily net sales are adjusted for the difference in U.S. selling days relative to the prior year period. Daily, organic constant currency net sales are also adjusted to exclude the impact on net sales due to year-over-year foreign currency exchange rate fluctuations and the prior year period results of E&R divested in the fourth quarter of 2023. There were 256 and 254 sales days in the full year 2024 and 2023, respectively. For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measure, see below "Non-GAAP Measures." Net sales of $17,168 million for the year ended December 31, 2024 increased $690 million, or 4%, and on a daily, organic constant currency basis, net sales increased 5% compared to the same period in 2023. Both High-Touch Solutions N.A. and the Endless Assortment segments contributed to sales growth in 2024. For further discussion on the Company's net sales, see the Segment Analysis section below. 28 28 28 28 28 28 Gross profit of $6,758 million for the year ended December 31, 2024 increased $262 million, or 4%, and gross profit margin of 39.4% was flat compared to the same period in 2023. Both segments contributed to gross profit dollar expansion in 2024. For further discussion on the Company's gross profit, see the Segment Analysis section below. Selling, general, and administrative (SG&A) expenses of $4,121 million for the year ended December 31, 2024 increased $190 million, or 5%. Adjusted SG&A of $4,105 million increased $200 million, or 5%, compared to the same period in 2023 driven by higher marketing and payroll and benefit expenses. SG&A leverage and adjusted SG&A leverage decreased 20 basis points in 2024. Operating earnings of $2,637 million for the year ended December 31, 2024 increased $72 million, or 3%. Adjusted operating earnings of $2,653 million increased $62 million, or 2%, compared to the same period in 2023 due to higher gross profit dollars, partially offset by increased SG&A expense. Operating margin and adjusted operating margin decreased 20 basis points in 2024. Income tax provision of $595 million for the year ended December 31, 2024 decreased $2 million, compared to the same period in 2023. Adjusted income taxes of $599 million decreased $2 million compared to the same period in 2023. Grainger's effective tax rates were 23.0% and 23.9% for the years ended December 31, 2024 and 2023, respectively. The adjusted effective tax rates were 23.0% and 23.8%. The Company's effective tax rate was positively impacted from the expiration of a statute of limitation period in 2024. Diluted earnings per share was $38.71 for the year ended December 31, 2024, an increase of 7% compared to $36.23 for the same period in 2023. Adjusted diluted earnings per share was $38.96 for the year ended December 31, 2024, an increase of 6% compared to $36.67 for the same period in 2023.

In this section, Grainger utilizes non-GAAP measures where it believes it will assist users of its financial statements in understanding its business. For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measures, see "Non-GAAP Measures." For further segment information, see Note 13 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. High-Touch Solutions N.A. The following table shows reported segment results (in millions of dollars): For the Years Ended December 31,20252024% Change Net sales$13,993 $13,720 2.0 %Gross profit5,832 5,741 1.6 Selling, general and administrative expenses3,478 3,356 3.6 Operating earnings$2,354 $2,385 (1.3)% Net sales Gross profit Selling, general and administrative expenses Operating earnings Net sales Gross profit Selling, general and administrative expenses Operating earnings Net sales of $13,993 million for the year ended December 31, 2025 increased $273 million, or 2%, and on a daily constant currency basis increased 3% compared to the same period in 2024. The increase was primarily due to volume. Gross profit of $5,832 million for the year ended December 31, 2025 increased $91 million, or 2%, and gross profit margin of 41.7% decreased 10 basis points compared to the same period in 2024. SG&A expenses of $3,478 million for the year ended December 31, 2025 increased $122 million, or 4%, compared to the same period in 2024. Adjusted SG&A increased $137 million, or 4%. The increase was primarily due to higher payroll and benefits and marketing expenses in 2025. 30 30 30 30 30 30 Operating earnings of $2,354 million for the year ended December 31, 2025 decreased $31 million, or 1%, compared to the same period in 2024. Adjusted operating earnings decreased $46 million, or 2% compared to the same period in 2024. Endless Assortment The following table shows reported segment results (in millions of dollars): For the Years Ended December 31,20252024% ChangeNet sales$3,625 $3,134 15.7 %Gross profit1,085 923 17.6 Selling, general and administrative expenses740 663 11.6 Operating earnings$345 $260 32.7 % Net sales Gross profit Selling, general and administrative expenses Operating earnings Net sales Gross profit Selling, general and administrative expenses Operating earnings Net sales of $3,625 million for the year ended December 31, 2025 increased $491 million, which represents a 16% increase on a reported and daily, organic constant currency basis compared to the same period in 2024. The increase was due to repeat business for the segment and enterprise customer growth at MonotaRO. Gross profit of $1,085 million for the year ended December 31, 2025 increased $162 million, or 18%, and gross profit margin of 29.9% increased 40 basis points compared to the same period in 2024. SG&A expenses of $740 million for the year ended December 31, 2025 increased $77 million, or 12%, compared to the same period in 2024. Adjusted SG&A of $730 million increased $67 million, or 10%, compared to the same period in 2024. The increase was primarily due to higher marketing expenses in 2025. Operating earnings of $345 million for the year ended December 31, 2025 increased $85 million, or 33%, compared to the same period in 2024. Adjusted operating earnings of $355 million increased $95 million, or 37%, compared to the same period in 2024.

In this section, Grainger utilizes non-GAAP measures where it believes it will assist users of its financial statements in understanding its business. For further information regarding the Company's non-GAAP measures including reconciliations to the most directly comparable GAAP measures, see "Non-GAAP Measures." For further segment information, see Note 12 of the Notes to Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Form 10-K. High-Touch Solutions N.A. The following table shows reported segment results (in millions of dollars): For the Years Ended December 31,20242023% Change Net sales$13,720 $13,267 3.4 %Gross profit5,741 5,546 3.5 Selling, general and administrative expenses3,356 3,212 4.5 Operating earnings$2,385 $2,334 2.2 % Net sales Gross profit Selling, general and administrative expenses Operating earnings Net sales Gross profit Selling, general and administrative expenses Operating earnings Net sales of $13,720 million for the year ended December 31, 2024 increased $453 million, or 3% compared to the same period in 2023. The increase was primarily due to volume. Gross profit of $5,741 million for the year ended December 31, 2024 increased $195 million, or 4%, and gross profit margin of 41.8% was flat compared to the same period in 2023. SG&A of $3,356 million for the year ended December 31, 2024 increased $144 million, or 5%, and adjusted SG&A of $3,341 million increased $155 million, or 5% compared to the same period in 2023. The increase was primarily due to higher marketing and payroll and benefit expenses. SG&A leverage decreased 20 basis points and adjusted SG&A leverage decreased 30 basis points compared to the same period in 2023. Operating earnings of $2,385 million for the year ended December 31, 2024 increased $51 million, or 2%, and adjusted operating earnings of $2,400 million increased $40 million, or 2% compared to the same period in 2023. 29 29 29 29 29 29 Endless Assortment The following table shows reported segment results (in millions of dollars): For the Years Ended December 31,20242023% ChangeNet sales$3,134 $2,916 7.5 %Gross profit923 864 6.8 Selling, general and administrative expenses663 631 5.1 Operating earnings$260 $233 11.6 % Net sales Gross profit Selling, general and administrative expenses Operating earnings Net sales Gross profit Selling, general and administrative expenses Operating earnings Net sales of $3,134 million for the year ended December 31, 2024 increased $218 million, or 7%, and on a daily constant currency basis, increased 12% compared to the same period in 2023. The increase was due to sales growth of 12%, driven by customer acquisition for the segment and enterprise customer growth at MonotaRO. Sales growth was partially offset by unfavorable currency exchange of 5% due to changes in the exchange rate between U.S. dollar and the Japanese yen. Gross profit of $923 million for the year ended December 31, 2024 increased $59 million, or 7%, and gross profit margin of 29.5% decreased 10 basis points compared to the same period in 2023. SG&A of $663 million for the year ended December 31, 2024 increased $32 million, or 5%, compared to the same period in 2023. The increase was primarily due to higher marketing expenses in 2024. SG&A leverage improved 40 basis points compared to the same period in 2023. Operating earnings of $260 million for the year ended December 31, 2024 increased $27 million, or 12%, compared to the same period in 2023.

Grainger has established and publicly announced its Grainger Impact Program, including its efforts to eliminate waste, reduce its carbon footprint, improve workplace safety and foster a welcoming workplace. These statements reflect its current plans and are not guarantees that Grainger will be able to achieve them. Grainger’s pursuit of or inability to update, achieve, or accurately report its goals could damage its reputation, financial performance, and growth, leading to increased scrutiny from customers, enforcement authorities, and other various stakeholders and potential risks such as reputational harm, lawsuits, or market access restrictions. Grainger’s ability to achieve the objectives of the Grainger Impact Program is subject to numerous risks, some of which are outside of its control. For example, evolving climate-related regulations in multiple jurisdictions—such as stricter emissions limits, carbon disclosure mandates, and supply chain sustainability requirements—may require Grainger to adjust its operations and increase compliance investments. New environmental laws, regulations, and enforcement could strain Grainger's suppliers and result in increased compliance-related costs, which could result in higher product costs that are passed to Grainger. Furthermore, our customers may adopt procurement policies that include varying requirements that their suppliers should comply with, or they may seek to include such provisions or requirements in their procurement terms and conditions. Standards for tracking and reporting Grainger's activity, if any, related to the Grainger Impact Program continue to evolve. Grainger’s selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others. Methodologies for reporting applicable data may be updated and previously reported data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of Grainger’s operations and other changes in circumstances. Grainger’s processes and controls for reporting such matters across its operations and supply chain are evolving along with multiple disparate standards for identification, measurement, and reporting regulatory disclosure standards are or may become required by the SEC, European and other regulators (including, but not limited to, the EU Corporate Sustainability Reporting Directive, the EU Corporate Sustainability Due Diligence Directive, and other state or federal climate change disclosure requirements that may become effective), and such standards may change over time, which could result in revisions to Grainger’s current goals, reported progress in achieving such goals, or ability to achieve such goals in the future. If Grainger’s practices do not meet evolving government, investor or other stakeholder expectations and standards, then Grainger’s reputation or its attractiveness as an investment, business partner, product or service provider or employer could be negatively impacted, and Grainger could be subject to litigation or regulatory proceedings. 17 17 17 17 17 17

Grainger has established and publicly announced environmental and social programs, including its efforts to address climate change, human rights, and an inclusive workplace. These statements reflect its current plans and are not guarantees that Grainger will be able to achieve them. Grainger’s pursuit of or inability to update, achieve, or accurately report its goals could damage its reputation, financial performance, and growth, leading to increased scrutiny from customers, enforcement authorities, and other various stakeholders and potential risks related to "anti-ESG sentiment", such as reputational harm, lawsuits, or market access restrictions. Grainger’s ability to achieve any environmental or social change is subject to numerous risks, some of which are outside of its control. For example, evolving climate-related regulations in multiple jurisdictions—such as stricter emissions limits, carbon disclosure mandates, and supply chain sustainability requirements—may require Grainger to adjust its operations and increase compliance investments. New environmental laws, regulations, and enforcement could strain Grainger's suppliers and result in increased compliance-related costs, which could result in higher product costs that are passed to Grainger. For instance, California's new climate disclosure requirements and SEC-mandated climate risk reporting could increase compliance burdens and legal exposure. Furthermore, our customers may adopt procurement policies that include environmental or social provisions or requirements that their suppliers should comply with, or they may seek to include such provisions or requirements in their procurement terms and conditions. Standards for tracking and reporting Grainger's activity, if any, related to environmental and social matters continue to evolve. Grainger’s selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others. Methodologies for reporting environmental and social data may be updated and previously reported data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of Grainger’s operations and other changes in circumstances. Grainger’s processes and controls for reporting such matters across its operations and supply chain are evolving along with multiple disparate standards for identification, measurement, and reporting Regulatory disclosure standards are or may become required by the SEC, European and other regulators (including, but not limited to, the EU Corporate Sustainability Reporting Directive, the EU Corporate Sustainability Due Diligence Directive, the state of California’s new climate change disclosure requirements, and climate-change disclosure requirements from the SEC that may become effective), and such standards may change over time, which could result in revisions to Grainger’s current goals, reported progress in achieving such goals, or ability to achieve such goals in the future. If Grainger’s environmental and social practices do not meet evolving government, investor or other stakeholder expectations and standards, then Grainger’s reputation or its attractiveness as an investment, business partner, product or service provider or employer could be negatively impacted, and Grainger could be subject to litigation or regulatory proceedings.

Macroeconomic Conditions The global economy continues to experience elevated levels of volatility and uncertainty, including within the commodity, labor, and transportation markets, driven by a combination of geopolitical developments and macroeconomic factors that can influence demand, cost and execution risk. These dynamics, together with recent changes in U.S. and foreign tariff and trade policies, continue to drive intermittent disruptions in global capital markets and supply chains. These developments may impact the Company’s operations, business, financial condition, and results of operations. The Company is actively monitoring economic conditions in the U.S. and key international markets, including the continued uncertainty regarding evolving tariff and trade policies, changes in interest rates, foreign currency exchange rate fluctuations, inflationary pressures, and the risk of a global or regional economic recession. Although the precise timing and magnitude of these factors remains uncertain, the Company believes its strategy is well positioned to navigate a range of outcomes. The Company continues to evaluate the impact of evolving tariff and trade policies, including potential changes in product sourcing strategies, cost management and customer pricing, and has implemented various strategies designed to mitigate certain adverse effects of changing inflationary conditions and challenges in our supply chain, while striving to maintain market price competitiveness. Historically, the Company's broad and diverse customer base and the generally nondiscretionary nature of its products have provided a degree of resilience during periods of economic contraction in the industrial MRO market. The full extent and impact of ongoing macroeconomic conditions, including recent, unprecedented tariff-related developments and shifting government budget policies and priorities at the municipal, state, and national levels, 27 27 27 27 27 27 remains uncertain and cannot be predicted at this time, but may impact the Company’s operations, business, financial condition and results of operations. For further discussion of the Company's risks and uncertainties, see Part I, Item 1A: Risk Factors of this Form 10-K. 28 28 28 28 28 28

Macroeconomic Conditions The global economy continues to experience volatility and uncertainty including to the commodity, labor and transportation markets, arising from a combination of geopolitical conditions and events, and various economic and financial factors. These conditions have affected the Company's operations and may continue to affect the Company's business, financial condition and results of operations. The Company continues to monitor economic conditions in the U.S. and globally, and the impact of macroeconomic pressures, including repercussions from changes in interest rates, currency exchange fluctuations, changing inflationary environment, and a potential recession on the Company’s business, customers, suppliers and other third parties. The Company has implemented strategies designed to mitigate certain adverse effects from the impact of the changing inflationary environment while remaining market price competitive. Historically, the Company’s broad and diverse customer base and the nondiscretionary nature of the Company’s products to its customers has helped to insulate it from the effects of recessionary periods in the industrial MRO market. The full extent and impact of these conditions are uncertain and cannot be predicted at this time. For further discussion of the Company's risks and uncertainties, see Part I, Item 1A: Risk Factors of this Form 10-K. 27 27 27 27 27 27