EXHIBIT 11 GRACO INC. AND SUBSIDIARIES COMPUTATION OF NET EARNINGS PER COMMON SHARE (Unaudited) Thirteen Weeks Ended Twenty-Six Weeks Ended -------------------- ---------------------- June 27, 1997 June 28, 1996 June 27, 1997 June 28, 1996 ------------- ------------- ------------- ------------- (In thousands except per share amounts) Net earnings applicable to common stock: Net earnings .................................................. $10,418 $10,032 $16,599 $15,617 ============= ============= ============= ============= Average number of common and common equivalent shares outstanding: Average number of common shares outstanding .......................................... 17,134 17,349 17,120 17,333 Dilutive effect of stock options computed on the treasury stock method ................................................ 358 239 375 238 ------------- ------------- ------------- ------------- 17,492 17,588 17,495 17,571 ============= ============= ============= ============= Net earnings per common and common equivalent share ................................. $ .60 $ .57 $ .95 $ .89 ============= ============= ============= ============= Primary and fully diluted earnings per share are substantially the same.