EXHIBIT 11 GRACO INC. AND SUBSIDIARIES COMPUTATION OF NET EARNINGS PER COMMON SHARE (Unaudited) Thirteen Weeks Ended Thirty-NineWeeks Ended -------------------- ---------------------- Sept. 27, 1996 Sept. 29, 1995 Sept. 27, 1996 Sept. 29, 1995 -------------- -------------- -------------- -------------- (In thousands except per share amounts) Net earnings applicable to common stock: Net earnings ................................ $10,157 $ 6,569 $25,774 $20,537 Less dividends on preferred stock ........... -- 19 -- 56 ------- ------- ------- ------- $10,157 $ 6,550 $25,774 $20,481 ======= ======= ======= ======= Average number of common and common equivalent shares outstanding: Average number of common shares outstanding ....................... 17,181 17,245 17,282 17,181 Dilutive effect of stock options computed on the treasury stock method ............................. 229 279 236 228 ------- ------- ------- ------- 17,410 17,524 17,518 17,409 ======= ======= ======= ======= Net earnings per common and common equivalent share .............. $ .58 $ .37 $ 1.47 $ 1.18 ======= ======= ======= ======= Primary and fully diluted earnings per share are substantially the same.