What Happened?
Shares of fluid and coating equipment company Graco (NYSE: GGG) fell 3.6% in the afternoon session after the company reported second-quarter financial results that missed analyst expectations on both revenue and earnings per share. Graco's adjusted earnings per share for the second quarter was 75 cents, missing the consensus estimate of 79 cents. Net sales increased by 3.4% year-over-year to $571.8 million but also fell short of the estimated $585.4 million. While acquisitions helped boost total sales, the company's organic revenue, which reflects core business performance, actually declined by 3%. Management attributed this to weaknesses in North American construction markets, which hurt sales in its Contractor segment. Furthermore, profitability faced pressure as component costs rose due to new tariffs. Looking ahead, Graco provided a cautious outlook for the rest of 2025, projecting low single-digit growth.
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What Is The Market Telling Us
Graco’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Graco is up 0.4% since the beginning of the year, but at $83.86 per share, it is still trading 9.1% below its 52-week high of $92.29 from November 2024. Investors who bought $1,000 worth of Graco’s shares 5 years ago would now be looking at an investment worth $1,572.
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