Wholesale Distribution: Non-GAAP measures in MD&A

In this section, Grainger utilizes non-GAAP measures where it believes it will assist users of its financial statements in understanding its business. 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 intention to exit the U.K. market. For further information regarding the Company's non-GAAP measures, including reconciliations to the most directly comparable GAAP measures, see below "Non-GAAP Measures."

The following table is included as an aid to understanding the changes in Grainger’s Condensed Consolidated Statements of Earnings for the three months ended September 30, 2025 and 2024 (in millions of dollars except per share amounts):

Three Months Ended September 30,
% Change	% of Net Sales
2025	2024	2025	2024
Net sales (1)	4,657	4,388	6.1	100.0	100.0
Cost of goods sold	2,859	2,668	7.2	61.4	60.8
Gross profit	1,798	1,720	4.5	38.6	39.2
Selling, general and administrative expenses	1,287	1,034	24.5	27.6	23.6
Operating earnings	511	686	(25.5)	11.0	15.6
Other expense – net	19	15	26.7	0.4	0.3
Income tax provision	171	166	3.0	3.7	3.8
Net earnings	321	505	(36.4)	6.9	11.5
Noncontrolling interest	27	19	42.1	0.6	0.4
Net earnings attributable to W.W. Grainger, Inc.	294	486	(39.5)	6.3	11.1
Diluted earnings per share	6.12	9.87	(38.0)
(1) For further information regarding the Company's disaggregated revenue, see Note 3 of the Notes to Condensed Consolidated Financial Statements in Part 1, Item 1: Financial Statements of this Form 10-Q.

The following table is included as an aid to understanding the changes of Grainger's total net sales, daily net sales and daily, constant currency net sales from the prior period for the three months ended September 30, 2025 and 2024 (in millions of dollars):