10-Q · July 1, 2026
MSC Industrial Direct Co., Inc. reported a strong fiscal Q3 with net sales reaching $1,047.1 million, marking a 7.8% increase year-over-year, and a diluted EPS of $1.44. The company's efforts to optimize operations led…
Earnings analysis · 10-K
MSM earnings analysis
Filed October 22, 2026 · Our reading of the company's report
The latest report
MSC delivered improving fiscal 2026 fundamentals, with revenue up 6.4%, diluted EPS up from $3.57 to $3.98, stable 8.0% operating margin and stronger pricing and operating-cost leverage. The business continues to deepen…
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MSC delivered improving fiscal 2026 fundamentals, with revenue up 6.4%, diluted EPS up from $3.57 to $3.98, stable 8.0% operating margin and stronger pricing and operating-cost leverage. The business continues to deepen its digital and high-touch moat, but operating cash flow declined to $306.5 million and a $43.7 million digital-core impairment highlights execution risk. Uncertainty around tariffs, funding costs and the fiscal 2027 outlook supports a neutral rather than bullish view.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $3.98
- Segment
- Single reportable segment: North American distribution of metalworking, MRO, Class C Consumables and OEM products; fiscal 2026 net sales $4.010 billion.
What stood out
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High-touch solutions expanded
MSC’s strategy is to be a “mission-critical partner” by combining approximately 2.5 million saleable SKUs with VMI, CMI, vending and in-plant solutions. Vending machines increased to 31,078 from 29,611, while in-plant programs increased to 431 locations from 411.
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Pricing drove solid revenue growth
Fiscal 2026 net sales increased 6.4% to $4.010 billion, driven by $236.3 million of pricing and favorable foreign exchange of $5.7 million; volume was a $1.8 million headwind. Core and other customer sales rose $165.4 million and national account sales rose $72.3 million.
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Earnings recovered year over year
The three-year trajectory improved from fiscal 2024: revenue was $3.821 billion, $3.770 billion and $4.010 billion in fiscal 2024-2026, while diluted EPS was $4.58, $3.57 and $3.98. Fiscal 2026 net income attributable to MSC increased 11.7% to $222.6 million.
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Cost leverage offset impairment
Gross margin increased to 40.9% from 40.8%, and operating expenses declined to 31.6% of sales from 32.5%; however, reported operating margin remained 8.0% because of $43.7 million of asset impairment and related charges. The filing says favorable pricing actions supported gross margin.
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Scale and digital reach remain moats
Digital channels represented 63.7% of fiscal 2026 consolidated sales, versus 63.8% in fiscal 2025, supporting MSC’s stated competitive advantage over smaller suppliers. North America generated 98% of sales, including 95% from the United States.
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Dividends prioritized amid lower cash flow
Capital allocation remained shareholder-oriented: MSC paid $194.3 million in regular dividends, repurchased $14.0 million of stock, invested $81.3 million in property, plant and equipment and made $5.0 million of net debt payments. Cash from operations was $306.5 million, down from $333.7 million in fiscal 2025.
What to watch
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Tariff regime remains unsettled
Tariff exposure remains materially uncertain: after the Supreme Court invalidated certain IEEPA tariffs on February 20, 2026, the Executive Branch introduced new tariffs under a different authority. The filing says the scope and duration remain uncertain, while inventory increased by $46.7 million partly because of tariff-related inventory countermeasures.
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Digital transformation execution risk
The company recorded $43.7 million of asset impairment and related charges in fiscal 2026, including a $41.8 million charge tied to the digital core implementation. The charge included $23.4 million of impaired capitalized implementation costs and $18.4 million for contractual obligations expected to be settled over four years.
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Refinancing and interest-rate exposure
Liquidity depends partly on short-term and potentially non-renewable funding: $217.0 million was outstanding under uncommitted credit facilities with $230.0 million of aggregate availability, and lenders are not obligated to roll the facilities at maturity. In addition, $100.0 million of debt matures in fiscal 2027; a 100-basis-point rate change would affect interest costs and receivables-purchase fees by approximately $6.4 million.
Management's outlook
The 10-K provides no numeric fiscal 2027 revenue or EPS guidance. It states that MSC will continue investing in E-commerce, vending, fulfillment centers, distribution networks, infrastructure and technology; quantitative outlook was provided separately in the Q4 earnings release/call.
Earlier filings 4
10-Q · April 1, 2026
MSC Industrial reported fiscal Q2 (13 weeks) net sales of $917,774,000 and diluted EPS of $0.76. Revenue rose 2.9% year-over-year (from $891,717,000) with gross profit of $377,588,000 (41.1% margin) and operating income…
10-K · October 23, 2025
MSC positions itself as a leading North American metalworking and MRO distributor focused on technical expertise, inventory-management solutions and E-commerce (the filing cites ~2.5 million active SKUs and specialized…
10-Q · July 1, 2025
MSC Industrial reported net sales of $971,145,000 for the thirteen weeks ended May 31, 2025, roughly flat versus the prior-year quarter (prior: $979,350,000) while gross margin remained ~41.0%. Operating income declined…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.