Total Revenue

+7.4% (from $492.2M to $528.3M)

Improved market dynamics and growth from acquisitions boosted overall sales. The enhancement in revenue is attributed to stronger sales performance and an improved product mix compared to Q1 2024, reflecting buoyant market conditions and effective post-period strategies. " " "

Contractor Segment

+10.9% (from $230.0M to $255.0M)

Enhanced geographic performance and acquisition benefits drove the growth in this segment. Sales improvements across regions, particularly offsetting previous challenges in the North American construction market, helped lift net sales compared to the prior quarter while leveraging acquisition synergies. " " " " "

Industrial Segment

+63% (from $142.0M to $231.7M)

Strategic reorganization and robust volume/price gains underpinned the dramatic increase. The reclassification of business units (combining previous industrial and related operations) as part of a broader restructuring, along with organic and acquisitive growth, resulted in significantly higher net sales compared to Q1 2024. " " " " "

Expansion Markets

New revenue of $41.6M

Emergence as a high-growth revenue contributor driven by strong semiconductor applications, notably in Asia Pacific. This segment, which was strategically realigned, capitalized on favorable market conditions in high-potential industries compared to previous periods where its contributions were not as prominent. " " "

Operating Earnings

+8.2% (from $132.996M to $144.0M)

Improved cost leverage and expense management resulted in higher operating earnings despite a lower gross margin rate. Better control of operating expenses relative to the previous period contributed to this modest increase in profitability. " "

Revenue/Sales Growth

FY 2025

low single-digit sales growth on an organic constant currency basis "

low single-digit growth on an organic constant currency basis; potential 1%-2% negative impact " "

no change

Effective Tax Rate

FY 2025

19.5% to 20.5% "

19.5% to 20.5% "

no change

Capital Expenditures

FY 2025

$50 million to $60 million "

$50 million to $60 million "

no change

Unallocated Corporate Expenses

FY 2025

$39 million to $42 million "

$39 million to $42 million (about $11 million per quarter) "

no change

Foreign Currency Impact

FY 2025

unfavorable impact of 1 percentage point on net sales and 2 percentage points on net earnings "

no impact on net sales or net earnings "

raised

Diluted Shares Outstanding

FY 2025

no prior guidance

approximately 170 million shares "

no prior guidance

Margin Performance

Q4 2024: Noted margin compression with declines in operating and gross margins due to acquisitions, volume declines, and tough year‐over‐year comparisons. " " Q3 2024: Emphasis on effective pricing and incremental margin improvements despite volume challenges. " Q2 2024: Reported a significant gross margin improvement (up 230 bps) driven by favorable mix and cost management. "

Q1 2025: Industrial margins were very strong with a 100% incremental margin driven by volume and the One Graco initiative; however, gross margin fell by 150 basis points due to lower factory volume and acquisition impacts. " "

Mixed sentiment: While increased volume in the Industrial segment is boosting incremental margins, ongoing pressures from acquisitions and lower factory output continue to depress gross margins.

Pricing Strategies

Q4 2024: Pricing actions were implemented to support margins and growth; discussions included tariffs and preferential tax benefits. " " " Q3 2024: Consistent price realization helped offset declining volumes. " Q2 2024: Strong, sustainable pricing strategies were highlighted as key to margin stability. " "

Q1 2025: Emphasized significant pricing power with the ability to adjust prices if needed; a pricing surcharge was applied on goods subject to tariffs and the company plans careful, tactical pricing adjustments moving forward. " "

Consistent with added nuance: Pricing remains a core strategic lever, with Q1 deepening the focus by incorporating tariff-driven measures and proactive pricing surcharges.

Acquisitions and M&A Initiatives

Q4 2024: Discussed the Corob acquisition, active M&A pipeline, and expectations for future growth; integration costs were noted. " " " Q3 2024: Highlighted acquisitions of PCT Systems and Corob along with a robust pipeline of nearly 100 companies under evaluation. " " " Q2 2024: Detailed improvements in the M&A pipeline and moderated valuation trends for strategic acquisitions. " "

Q1 2025: Focused on a strong M&A pipeline and integration efforts – notably, the acquisition of COROB contributed 6% to sales growth and is being actively integrated, while the “One Graco” initiative supports expansion into adjacent markets. " " "

Increasing emphasis: M&A is evolving from volume-driven acquisitions to a more strategic and integrated approach, with an enhanced focus on leveraging acquisitions for future growth and synergies.

China and Asia Pacific Market Dynamics

Q4 2024: Mixed signals in China with weaknesses in key end markets yet some optimism from improved quoting activity; Asia Pacific showed strength in protective coatings. " " " Q3 2024: Reported significant revenue declines in China (with over $10 million drop) due to overcapacity and softness, while some APAC markets (Japan, India) saw modest positives. " " " Q2 2024: Noted deteriorating demand and double-digit declines in incoming orders, particularly in China, amid broader regional softness. " "

Q1 2025: Continued challenges driven by evolving tariffs and economic uncertainty; however, steady incoming orders, proactive inventory moves (e.g. non-bonded status in China), and targeted mitigation measures (pricing surcharges, supplier diversification) are being implemented. " " " "

Continued challenges with proactive management: China remains a pressure point with tariff risks and subdued activity, but Q1 shows a shift toward proactive mitigation and stabilization efforts across the Asia Pacific.

Semiconductor Market Trends

Q4 2024: The semiconductor market was a "wildcard" contributing to declines in expansion markets. " Q3 2024: Marked weakness due to overcapacity and declining volumes, though early pickup in bookings was noted. " " Q2 2024: Significant decline with some early signs of recovery through higher incoming order rates and optimism driven by new fab construction. " " "

Q1 2025: Exhibited positive momentum – a rebound started at the end of 2024, contributing to growth in the Expansion Markets segment and driving improved semiconductor order activity. " " "

Transitioning from weakness to recovery: Despite prior declines, Q1 is characterized by a rebound in semiconductor demand, signaling a potential turnaround.

Tariff Impact and Mitigation Strategies

Q4 2024: Tariffs were acknowledged but were not a primary factor in recent pricing actions; limited detailed discussion. " Q3 2024 & Q2 2024: Tariff-related issues were not a major topic in discussions.

Q1 2025: In-depth coverage of tariff impacts with an explicit discussion on mitigation strategies – including qualifying additional suppliers, reshoring component manufacturing, product redesign, maintaining three months’ inventory, and applying pricing surcharges to offset retaliatory tariffs. " " " "

Newly emerged focus: Tariff challenges have become a prominent issue in Q1, prompting detailed mitigation strategies and proactive inventory and pricing responses that were not previously emphasized.

Contractor Segment Performance

Q4 2024: Experienced a 3% decline due to softness in housing and significant litigation costs, with margins compressed. " " " Q3 2024: Showed a slight decline (1%), with new product introductions mitigating some softness; market channels exhibited mixed performance. " " Q2 2024: Saw strong rebound with 6% sales growth (9% in North America) driven by new product launches and channel strength despite market challenges. " "

Q1 2025: Displayed mixed sentiment – a 1% overall decline attributed to ongoing softness in the home center channel and challenging EMEA markets, counterbalanced by strong performance in North America’s pro paint channel and robust growth in certain Asia Pacific regions (35% growth in APAC driven by Australia and New Zealand). " " "

Cyclic and regionally varied: Performance remains mixed with persistent softness in some channels even as new product efforts and regional strengths (e.g. in APAC and pro channels) offer pockets of growth.

Industrial and Process Segment Challenges

Q4 2024: Industrial faced a 13% quarterly decline driven by China weakness, lower sales volume, and tough comparisons; Process was flat quarterly and down 8% for the year due to semiconductor weakness and mixed regional performance. " " Q3 2024: Both segments suffered declines – Process down 12% with heavy China impact and overcapacity issues, while Industrial was negatively affected by low order rates and broad-based softness. " " " Q2 2024: Reported 4% decline in Industrial and 9% in Process as Asia Pacific and other regions continued to experience demand weak spots. " "

Q1 2025: The Industrial segment showed improvement with increased sales (up 5%) and enhanced margins driven by higher volumes and initiatives like One Graco, while the Process segment was not specifically detailed in Q1 discussions. " "

Divergence emerging: Industrial appears to be recovering with volume-driven gains, whereas challenges in the Process segment remain less visible in Q1, suggesting a possible shift in focus or early signs of selective recovery.

Supply Chain Resilience and Inventory Management

Q4 2024: Minimal discussion aside from brief mentions of inventory reductions linked to lower sales volume. " Q3 2024: Mentioned indirectly via inventory purchases related to new product launches without deep strategic focus. " Q2 2024: Touched on the timing of inventory purchases impacting operations, with no comprehensive strategy detailed. "

Q1 2025: Extensive discussion on supply chain resilience – proactive measures such as moving inventory into non‐bonded status in China, leveraging a global manufacturing footprint, qualifying new suppliers, and building a short-term buffer to offset tariff impacts. " " "

Heightened focus: Q1 reveals a significant strategic shift with detailed actions to strengthen supply chain resilience and inventory management in response to geopolitical and tariff risks, marking an increased emphasis compared to earlier periods.

Macroeconomic Uncertainty and Capital Investment Delays

Q4 2024: Indirect mentions of a challenging business landscape and softness across multiple end markets. " Q3 2024: Explicit acknowledgment of global uncertainty (wars, elections) leading to a cautious “wait‐and‐see” approach and delayed CapEx in markets like construction in China. " " Q2 2024: Noted sluggish macroeconomic conditions with delays in capital projects and reduced factory investments. " " "

Q1 2025: Senior executives emphasized that evolving trade policies and tariff uncertainties are creating economic uncertainty, influencing customer confidence and prompting delays in capital investments for major projects (e.g. in automotive, aerospace). " " "

Persistent uncertainty: While the macroeconomic headwinds persist, Q1 illustrates an increased emphasis on delaying capital investments as customers and partners adopt more cautious approaches amid ongoing geopolitical volatility.

New Product Innovation and Launches

Q4 2024: Introduced breakthrough products like the PowerShot XT airless paint gun, with expectations for positive future impact despite market challenges. " " Q3 2024: New products were credited with driving incremental revenue and helping stabilize performance though impact in the quarter was modest. " " Q2 2024: Marked by a robust cycle of new launches (e.g. XT, Cordless Connect, QuickShot) that significantly contributed to contractor growth and strong sell-through. " " "

Q1 2025: Continued focus on new product innovation, especially within the Contractor segment; although current quarter sales were affected by market softness, upcoming launches and sustained innovation are positioned to drive future growth and capture additional market share. " "

Consistently critical: New product introductions remain a cornerstone strategy across periods, with Q1 reinforcing the role of innovation in countering market softness and maintaining competitive momentum, albeit with a forward-looking focus on future quarters.