Graco Sales Hit Record 586.4 Million Dollars in Third Quarter
Key Facts
Graco reported record third-quarter 2026 sales of 586.4 million dollars, with growth in its Contractor, Industrial and Expansion Markets businesses, according to its earnings release and investor presentation. Sales rose from 543.4 million dollars in the third quarter of 2025, supported by finishing systems, professional paint and semiconductors. Reported operating earnings totaled 148.1 million dollars during the quarter, according to the company statement. Graco posted reported net earnings of 121.6 million dollars for the same period. Reported diluted earnings per share were 0.75 dollars.
On an adjusted basis, Graco's operating earnings totaled 160.9 million dollars in the third quarter, according to the earnings release. The company said price increases offset higher product costs during the period. Adjusted diluted earnings per share were 0.81 dollars, compared with 0.77 dollars in the third quarter of 2025, under the recast methodology for the comparative figures. The company repurchased 132 million dollars of shares during the quarter. Those purchases brought total buybacks since the start of 2026 to 463 million dollars, which Graco said helped support growth in adjusted earnings per share. Meanwhile, net cash generated from operating activities during the first nine months totaled 463 million dollars, compared with 487 million dollars in the corresponding period of 2025, according to the earnings presentation. Capital expenditure during the first nine months of the year totaled 48 million dollars.
By business, Contractor segment sales totaled about 276 million dollars in the third quarter, up 5% year on year, according to the company's investor presentation. The segment benefited from the professional paint sales channel in the Americas. Industrial segment sales totaled about 264 million dollars, up 11% year on year. Graco attributed the performance to finishing systems and project completions, alongside contributions from acquired operations. The Expansion Markets segment posted sales of approximately 46 million dollars, up 8% from the corresponding period a year earlier. The company said strength in semiconductors was the primary driver of the segment's growth.
On demand, organic incoming orders rose 7% year on year during the third quarter, according to Graco's statement. The quarter's growth rate exceeded the year-to-date increase of 4% through the end of the same period. The company said all its segments contributed to growth in organic incoming orders since the start of 2026. Excluding acquisitions, the order backlog increased by 51 million dollars between the end of December 2025 and 16 October 2026, according to the earnings presentation. That increase represents 18% growth in the backlog over the period.
The Industrial segment's performance follows the completion of the Valco Melton acquisition at an announced purchase price of 447 million dollars in cash, according to Graco's announcement of the deal's completion in August 2026. Valco Melton generated approximately 145 million dollars in revenue in 2025. The acquired company joined Graco's Industrial segment. When announcing second-quarter results, management had set a third-quarter sales range of 580 million to 600 million dollars. It said at the time that the guidance excluded "our announced acquisition of Valco Melton," an exclusion that distinguishes the previous forecast range from the reported results for the period.
In a separate expansion initiative, Graco announced a technology partnership between ABB and ETM to develop motors for data center cooling towers, heat rejection systems and thermal management. The partnership statement described the technology as providing "high torque, low speed and efficient direct drive." These characteristics help reduce mechanical complexity and drivetrain components in cooling systems, according to the statement. For Graco's nearer-term business, management expects revenue of 610 million to 640 million dollars in the fourth quarter of 2026, according to the earnings release. The company scheduled a call to discuss the results for 22 October 2026. The call begins at 11 a.m. Eastern Daylight Time. Further out, ABB and ETM aim to complete the first installations in data center environments by the end of 2029.