MSC Industrial Supply Co. Reports Fiscal 2026 Fourth Quarter and Full Year Results

Quarterly adjusted earnings increased despite lower GAAP profit, while annual operating cash flow declined.

Rhea-AI Summary

MSC Industrial Supply (MSM) reported fiscal 2026 fourth-quarter sales of $1,079.2 million, while quarterly earnings declined from a year earlier. Sales rose 10.3%, but net income attributable to MSC fell 15.2% to $47.9 million and diluted earnings per share fell to $0.85 from $1.01. Operating margin declined to 6.7% from 8.6%, with $41.774 million in asset impairment and related charges.

Adjusted quarterly earnings per share rose 33.0% to $1.45, and adjusted operating margin increased to 10.9% from 9.2%. For the year ended August 29, 2026, sales rose 6.4% to $4,009.7 million and diluted earnings per share increased 11.5% to $3.98. Annual operating cash flow fell to $306.500 million from $333.717 million. MSC expects fiscal 2027 first-quarter average daily sales growth of 9.5%–10.5% year over year and an adjusted operating margin of 9.5%–10.1%.

23 points · 0 major

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0 major · 12 points

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Positive

• Moderate pointFourth-quarter sales increased 10.3% year over year to $1,079.2 million.
• Moderate pointFourth-quarter adjusted operating income rose 30.5% to $117.8 million year over year.
• Moderate pointFourth-quarter adjusted net income attributable to MSC rose 33.8% to $81.5 million.
• Moderate pointFiscal 2026 sales increased 6.4% to $4,009.7 million year over year.
• Moderate pointFiscal 2026 operating income increased 6.3% to $320.6 million.
• Moderate pointFiscal 2026 net income attributable to MSC increased 11.7% to $222.6 million.
• Moderate pointFiscal 2026 adjusted operating income rose 20.1% to $379.3 million.
• Moderate pointFiscal 2026 adjusted net income attributable to MSC increased 25.0% to $262.6 million.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Fiscal 2027 first-quarter average daily sales growth is forecast at 9.5% to 10.5% year over year.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Fiscal 2027 first-quarter adjusted operating margin is forecast at 9.5% to 10.1%.

13 minor points

• Minor pointFourth-quarter average daily sales increased 8.6% year over year, exceeding the guided range.
• Minor pointFourth-quarter core customer growth was approximately 10%.
• Minor pointFourth-quarter adjusted operating margin increased to 10.9% from 9.2%, exceeding the outlook range.
• Minor pointFourth-quarter adjusted diluted earnings per share increased 33.0% to $1.45.
• Minor pointFiscal 2026 diluted earnings per share increased 11.5% to $3.98.
• Minor pointFiscal 2026 adjusted operating margin increased to 9.5% from 8.4%.
• Minor pointFiscal 2026 adjusted diluted earnings per share increased 24.7% to $4.69.
• Minor point. Forward-looking: it has not happened yet and may not happen.Fiscal 2027 free cash flow conversion is forecast at approximately 80%–90%.
• Minor pointCash and cash equivalents increased to $65.028 million from $56.228 million at the prior year-end.
• Minor pointLong-term debt, including finance leases, declined to $159.756 million from $168.831 million at the prior year-end.
• Minor pointFiscal 2026 interest expense declined to $21.715 million from $24.063 million.
• Minor pointFiscal 2026 restructuring and other costs declined to $8.679 million from $10.999 million.
• Minor pointFiscal 2026 capital expenditures declined to $81.344 million from $92.840 million.

Negative

• Moderate pointFourth-quarter operating income fell 13.6% to $72.8 million year over year.
• Moderate pointFourth-quarter net income attributable to MSC fell 15.2% to $47.9 million.
• Moderate pointFiscal 2026 asset impairment and related charges totaled $43.664 million, including $41.774 million in the fourth quarter.
• Moderate pointFiscal 2026 operating cash flow declined to $306.500 million from $333.717 million.
• Moderate pointFiscal 2026 operating expenses increased to $1,266.344 million from $1,223.573 million.

7 minor points

• Minor pointFourth-quarter operating margin declined to 6.7% from 8.6%.
• Minor pointFourth-quarter diluted earnings per share declined 15.8% to $0.85.
• Minor pointFiscal 2026 inventory changes used $46.679 million in cash, versus $1.719 million provided a year earlier.
• Minor pointFiscal 2026 receivables changes used $37.982 million in cash, versus $17.742 million a year earlier.
• Minor pointFiscal 2026 credit-loss provisions increased to $10.739 million from $7.495 million.
• Minor point. Forward-looking: it has not happened yet and may not happen.Fiscal 2027 depreciation and amortization expense is forecast at approximately $100 million–$105 million.
• Minor point. Forward-looking: it has not happened yet and may not happen.Fiscal 2027 interest and other expense is forecast at approximately $40 million–$45 million.

News Explained

Fiscal 2026 adjusted EPS was $4.69; fiscal 2027 guidance gives capital expenditures of $90–$100 million and free-cash-flow conversion of 80%–90%.

MSC Industrial has reported fiscal 2026 results and added fiscal 2027 full-year outlook for capital spending and cash-flow measures.

For fiscal 2026, adjusted diluted EPS was $4.69, up 24.7%, and adjusted operating margin was 9.5%, versus 8.4% in fiscal 2025.

Fiscal 2027 outlook includes capital expenditures of $90 million to $100 million and free cash flow conversion of about 80% to 90%.

Key Figures

Q4 net sales: $1,079.2M; +10.3% Q4 diluted EPS: $0.85 per share; -15.8% Full-year net sales: $4,009.7M; +6.4% +5 more

Q4 net sales

$1,079.2M; +10.3%

FY26 Q4 year over year

Q4 diluted EPS

$0.85 per share; -15.8%

FY26 Q4 year over year, GAAP

Full-year net sales

$4,009.7M; +6.4%

FY26 year over year

Full-year diluted EPS

$3.98 per share; +11.5%

FY26 year over year, GAAP

Adjusted Q4 diluted EPS

$1.45 per share; +33.0%

FY26 Q4 year over year

Adjusted Q4 operating margin

10.9%

FY26 Q4; compared with 9.2% in FY25 Q4

ADS growth outlook

9.5% to 10.5%

FY27 Q1 year-over-year outlook

Adjusted operating margin outlook

9.5% to 10.1%

FY27 Q1 outlook

Key Terms

mro, non-gaap, gaap, diluted eps

4 terms

mro technical

"metalworking and maintenance, repair and operations ("MRO") products"

MRO stands for Maintenance, Repair, and Operations, referring to the supplies and services companies provide to keep machinery, buildings, and infrastructure functioning smoothly. These essentials are vital for ongoing business activities, much like routine car maintenance keeps a vehicle running reliably. Investors pay attention to MRO companies because their performance reflects the health of industries that rely heavily on regular upkeep and support services.

non-gaap financial

"Represents a non-GAAP financial measure."

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

gaap financial

"accounting principles generally accepted in the United States ("GAAP")"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

diluted eps financial

"Adjusted Diluted EPS"

Diluted earnings per share (EPS) shows how much profit a company makes for each share of stock, assuming all possible shares from stock options or convertible securities are used. It provides a more conservative estimate than basic EPS, accounting for potential share increases that could dilute ownership. Investors use diluted EPS to get a clearer picture of a company's true profitability on a per-share basis.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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MELVILLE, NY AND DAVIDSON, NC / ACCESS Newswire / October 22, 2026 / MSC INDUSTRIAL SUPPLY CO. (NYSE:MSM), ("MSC", "MSC Industrial", or the "Company," "we", "us", or "our") a leading North American distributor of a broad range of metalworking and maintenance, repair and operations ("MRO") products and services, today reported financial results for its fiscal 2026 fourth quarter and full year ended August 29, 2026.

Financial Highlights3		FY26 Q4				FY25 Q4				Change				FY26				FY25				Change
Net Sales		$	1,079.2			$	978.2				10.3	%		$	4,009.7			$	3,769.5				6.4	%
Income from Operations		$	72.8			$	84.3				(13.6	)%		$	320.6			$	301.6				6.3	%
Operating Margin			6.7	%			8.6	%							8.0	%			8.0	%
Net Income Attributable to MSC		$	47.9			$	56.5				(15.2	)%		$	222.6			$	199.3				11.7	%
Diluted EPS		$	0.85		4	$	1.01		5		(15.8	)%		$	3.98		4	$	3.57		5		11.5	%
Adjusted Financial Highlights3		FY26 Q4				FY25 Q4				Change				FY26				FY25				Change
Net Sales		$	1,079.2			$	978.2				10.3	%		$	4,009.7			$	3,769.5				6.4	%
Adjusted Income from Operations 1		$	117.8			$	90.3				30.5	%		$	379.3			$	315.8				20.1	%
Adjusted Operating Margin 1			10.9	%			9.2	%							9.5	%			8.4	%
Adjusted Net Income Attributable to MSC 1		$	81.5			$	60.9				33.8	%		$	262.6			$	210.0				25.0	%
Adjusted Diluted EPS 1		$	1.45		4	$	1.09		5		33.0	%		$	4.69		4	$	3.76		5		24.7	%

1 Represents a non-GAAP financial measure. An explanation and a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure are presented in the schedules accompanying this press release.

2 The Company defines Operating Cash Flow Conversion as Net cash provided by operating activities as a percentage of Net income. The Company's management uses Operating Cash Flow Conversion to evaluate the Company's operating performance, in particular how efficiently the Company turns its sales and profits into cash, and to assess the efficiency of the Company's use of working capital. The Company believes Operating Cash Flow Conversion is useful to investors for the foregoing reasons and as a measure of the rate at which the Company converts its net income reported in accordance with GAAP to cash inflows, which helps investors assess whether the Company is generating sufficient cash flow to provide an adequate return.

3 In millions except percentages and per share data or as otherwise noted.

4 Based on 56.1 million and 56.0 million weighted-average diluted shares outstanding for FY26 Q4 and FY26, respectively.

5 Based on 55.9 million weighted-average diluted shares outstanding for FY25 Q4 and FY25.

Martina McIsaac, President and Chief Executive Officer, said, "We had a strong finish to fiscal 2026, with fourth quarter results exceeding our expectations and sales achieving record quarterly levels. Underpinning this performance was core customer growth of approximately 10%-our strongest in more than three years-and accelerating growth in National Accounts. These results provide further evidence that MSC is heading in the right direction, and that the changes we have made to drive profitable growth are taking hold."

Rob Kuhns, Executive Vice President and Chief Financial Officer, added, "Average daily sales exceeded the high end of our guided range, driven by price benefits and stronger volumes that yielded year-over-year improvement of 8.6%. Further progress on our cost structure, combined with this better-than-expected growth, led to an adjusted operating margin of 10.9%-exceeding the high end of our outlook-and an adjusted incremental operating margin of roughly 27%."

McIsaac concluded, "While we remain mindful of inflationary headwinds and tougher comparisons looking ahead, we are confident that profitable growth will remain the trend. Our strategic execution is building momentum as our end markets continue to improve. This positions MSC well entering fiscal 2027, as demonstrated by first-quarter sales trends showing low double-digit growth to date."

First Quarter Fiscal 2027 Financial Outlook
ADS Growth (YoY)	9.5% to 10.5%
Adjusted Operating Margin1	9.5% to 10.1%

Full-Year Fiscal 2027 Outlook for Certain Financial Metrics

• Depreciation and amortization expense of ~$100M-$105M
• Interest and other expense of ~$40M-$45M
• Capital expenditures of ~$90M-$100M
• Free cash flow conversion¹ of ~80%-90%
• Effective tax rate of ~24.5%-25.5%

(1) Guidance provided is a non-GAAP financial measure presented on an adjusted basis. For further details see the Non-GAAP financial measures information presented in the schedules accompanying this press release.

Conference Call Information

MSC will host a conference call today at 8:30 a.m. EDT to review the Company's fiscal 2026 fourth quarter and full year results. The call, accompanying slides, and other operational statistics may be accessed at: https://investor.mscdirect.com. The conference call may also be accessed at 1-888-506-0062 (U.S.) or 1-973-528-0011 (international) and providing the access code 287054.

An online archive of the broadcast will be available until November 5, 2026. The Company's reporting date for the fiscal 2027 first quarter is scheduled for January 6, 2027.

Contact Information
Investors:	Media:
Ryan Mills, CFA	Leah Kelso
VP, Investor Relations & Business Development	VP, Communications & Sales Enablement
Rmills@mscdirect.com	Leah.Kelso@mscdirect.com

About MSC Industrial Supply Co.

MSC Industrial Supply Co. (NYSE:MSM) is a leading North American distributor of a broad range of metalworking, maintenance, repair and operations (MRO), and production fastener and hardware products and services. With approximately 2.5 million products, industry‑leading inventory management and supply chain solutions, and more than 80 years of experience, we help customers improve productivity, profitability, and operational performance.

Our team of over 7,000 associates partners closely with customers across industries to keep their operations running efficiently today while enabling them with insights and comprehensive solutions to continually rethink, retool, and optimize for a more productive tomorrow.

For more information on MSC Industrial, please visit mscdirect.com.

Cautionary Note Regarding Forward-Looking Statements:

Statements in this press release may constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of present or historical fact, that address activities, events or developments that MSC expects, believes or anticipates will or may occur in the future, including statements about results of operations and financial condition, expected future results, expected benefits from our investment and strategic plans and other initiatives, and expected future growth and profitability, are forward-looking statements. The words "will," "may," "believes," "anticipates," "thinks," "expects," "estimates," "plans," "intends" and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. In addition, statements which refer to expectations, projections or other characterizations of future events or circumstances, statements involving a discussion of strategy, plans or intentions, statements about management's assumptions, projections or predictions of future events or market outlook and any other statement other than a statement of present or historical fact are forward-looking statements. The inclusion of any statement in this press release does not constitute an admission by MSC or any other person that the events or circumstances described in such statement are material. In addition, new risks may emerge from time to time and it is not possible for management to predict such risks or to assess the impact of such risks on our business or financial results. Accordingly, future results may differ materially from historical results or from those discussed or implied by these forward-looking statements. Given these risks and uncertainties, the reader should not place undue reliance on these forward-looking statements. These risks and uncertainties include, but are not limited to, the following: general economic conditions in the markets in which we operate; changing customer and product mixes; volatility in commodity, energy and labor prices, and the impact of prolonged periods of low, high or rapid inflation; competition, including the adoption by competitors of aggressive pricing strategies or sales methods; industry consolidation and other changes in the industrial distribution sector; the applicability of laws and regulations relating to our status as a supplier to the U.S. government and public sector; the credit risk of our customers; our ability to accurately forecast customer demands; interruptions in our ability to make deliveries to customers; supply chain disruptions; our ability to attract and retain sales and customer service personnel; the risk of loss of key suppliers or contractors or key brands; changes to trade policies or trade relationships, including tariff policies; risks associated with opening or expanding our customer fulfillment centers; our ability to estimate the cost of healthcare claims incurred under our self-insurance plan; interruption of operations at our headquarters or customer fulfillment centers; products liability due to the nature of the products that we sell; impairments of goodwill and other indefinite-lived intangible assets; the impact of climate change; operating and financial restrictions imposed by the terms of our material debt instruments; our ability to access additional liquidity; the significant influence that our principal shareholders will continue to have over our decisions; our ability to execute on our E-commerce strategies and maintain our digital platforms; costs associated with maintaining our information technology ("IT") systems and complying with data privacy laws; disruptions or breaches of our IT systems or violations of data privacy laws, including such disruptions or breaches in connection with our E-commerce channels; risks related to online payment methods and other online transactions; the retention of key management personnel; litigation risk due to the nature of our business; failure to comply with environmental, health, and safety laws and regulations; and our ability to comply with, and the costs associated with, social and environmental responsibility policies. Additional information concerning these and other risks is described under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual and Quarterly Reports on Forms 10-K and 10-Q, respectively, and in the other reports and documents that we file with the United States Securities and Exchange Commission. We expressly disclaim any obligation to update any of these forward-looking statements, except to the extent required by applicable law.

MSC INDUSTRIAL DIRECT CO., INC.
Consolidated Balance Sheets
(In thousands)

		August 29, 2026				August 30, 2025
ASSETS
Current Assets:
Cash and cash equivalents		$	65,028			$	56,228
Accounts receivable, net of allowance for credit losses			451,550				423,306
Inventories			688,738				644,090
Prepaid expenses and other current assets			114,097				102,930
Total current assets			1,319,413				1,226,554
Property, plant and equipment, net			339,023				346,706
Goodwill			723,977				723,702
Identifiable intangibles, net			69,919				85,455
Operating lease assets			50,761				52,464
Other assets			5,922				27,183
Total assets		$	2,509,015			$	2,462,064
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of debt including obligations under finance leases		$	317,191			$	316,868
Current portion of operating lease liabilities			23,642				22,236
Accounts payable			237,978				225,150
Accrued expenses and other current liabilities			161,475				165,092
Total current liabilities			740,286				729,346
Long-term debt including obligations under finance leases			159,756				168,831
Noncurrent operating lease liabilities			27,605				30,872
Deferred income taxes and tax uncertainties			142,101				136,513
Other noncurrent liabilities			13,560				-
Total liabilities		$	1,083,308			$	1,065,562
Commitments and Contingencies
Shareholders' Equity:
MSC Industrial Shareholders' Equity:
Preferred Stock			-				-
Class A Common Stock			57				57
Additional paid-in capital			1,114,507				1,093,630
Retained earnings			450,238				432,622
Accumulated other comprehensive loss			(19,641	)			(20,736	)
Class A treasury stock, at cost			(119,454	)			(117,363	)
Total MSC Industrial shareholders' equity			1,425,707				1,388,210
Noncontrolling interest			-				8,292
Total shareholders' equity			1,425,707				1,396,502
Total liabilities and shareholders' equity		$	2,509,015			$	2,462,064

MSC INDUSTRIAL DIRECT CO., INC.
Consolidated Statements of Income
(In thousands, except per share data)

		(Unaudited)
		Fiscal Quarters Ended								Fiscal Years Ended
		August 29, 2026				August 30, 2025				August 29, 2026				August 30, 2025
Net sales		$	1,079,162			$	978,175			$	4,009,703			$	3,769,521
Cost of goods sold			640,579				583,196				2,370,450				2,233,386
Gross profit			438,583				394,979				1,639,253				1,536,135
Operating expenses			322,664				306,108				1,266,344				1,223,573
Restructuring and other costs			1,355				4,569				8,679				10,999
Asset impairment and related charges			41,774				-				43,664				-
Income from operations			72,790				84,302				320,566				301,563
Other income (expense):
Interest expense			(5,329	)			(5,731	)			(21,715	)			(24,063	)
Interest income			375				188				936				1,130
Other expense, net			(3,567	)			(2,610	)			(7,742	)			(15,052	)
Total other expense			(8,521	)			(8,153	)			(28,521	)			(37,985	)
Income before provision for income taxes			64,269				76,149				292,045				263,578
Provision for income taxes			16,330				20,015				72,135				65,742
Net income			47,939				56,134				219,910				197,836
Less: Net loss attributable to noncontrolling interest			-				(412	)			(2,679	)			(1,492	)
Net income attributable to MSC Industrial		$	47,939			$	56,546			$	222,589			$	199,328
Per share data attributable to MSC Industrial:
Net income per common share:
Basic		$	0.86			$	1.01			$	3.99			$	3.57
Diluted		$	0.85			$	1.01			$	3.98			$	3.57
Weighted average shares used in computing net income per common share:
Basic			55,848				55,739				55,825				55,781
Diluted			56,095				55,890				55,990				55,894

MSC INDUSTRIAL DIRECT CO., INC.
Consolidated Statements of Comprehensive Income
(In thousands)

		(Unaudited)
		Fiscal Quarters Ended								Fiscal Years Ended
		August 29, 2026				August 30, 2025				August 29, 2026				August 30, 2025
Net income, as reported		$	47,939			$	56,134			$	219,910			$	197,836
Other comprehensive income, net of tax:
Foreign currency translation adjustments			(113	)			1,161				1,444				707
Comprehensive income			47,826				57,295				221,354				198,543
Comprehensive income attributable to noncontrolling interest:
Net loss			-				412				2,679				1,492
Foreign currency translation adjustments			-				(228	)			(349	)			(299	)
Comprehensive income attributable to MSC Industrial		$	47,826			$	57,479			$	223,684			$	199,736

MSC INDUSTRIAL DIRECT CO., INC.
Consolidated Statements of Cash Flows
(In thousands)

		Fiscal Years Ended
		August 29, 2026				August 30, 2025
Cash Flows from Operating Activities:
Net income		$	219,910			$	197,836
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			101,395				90,627
Amortization of cloud computing arrangements			1,399				1,790
Non-cash operating lease cost			24,166				24,472
Stock-based compensation			19,017				12,551
Loss on disposal of property, plant and equipment			1,005				1,957
Asset Impairment and related charges			43,664				-
Non-cash changes in fair value of estimated contingent consideration			(696	)			293
Provision for credit losses			10,739				7,495
Expenditures for cloud computing arrangements			(5,107	)			(4,688	)
Deferred income taxes and tax uncertainties			7,768				(2,925	)
Changes in operating assets and liabilities, net of amounts associated with business acquired:
Accounts receivable			(37,982	)			(17,742	)
Inventories			(46,679	)			1,719
Prepaid expenses and other current assets			(8,844	)			482
Operating lease liabilities			(24,323	)			(23,819	)
Other assets			13				350
Accounts payable and accrued liabilities			1,055				43,319
Total adjustments			86,590				135,881
Net cash provided by operating activities			306,500				333,717
Cash Flows from Investing Activities:
Expenditures for property, plant and equipment			(81,344	)			(92,840	)
Cash used in acquisitions, net of cash acquired			(240	)			(790	)
Net proceeds from sale of property			1,057				30,336
Net cash used in investing activities			(80,527	)			(63,294	)
Cash Flows from Financing Activities:
Repurchases of Class A Common Stock			(13,967	)			(39,317	)
Payments of regular cash dividends			(194,338	)			(189,650	)
Proceeds from sale of Class A Common Stock in connection with Associate Stock Purchase Plan			4,014				4,253
Proceeds from exercise of Class A Common Stock options			-				8,123
Borrowings under credit facilities			406,000				253,498
Payments under credit facilities			(411,000	)			(254,998	)
Payments under Private Placement Debt			(100,000	)			(20,000	)
Proceeds from Private Placement Debt			100,000				-
Purchase of noncontrolling interest			(8,195	)			-
Other, net			403				(5,481	)
Net cash used in financing activities			(217,083	)			(243,572	)
Effect of foreign exchange rate changes on cash and cash equivalents			(90	)			(211	)
Net increase in cash and cash equivalents			8,800				26,640
Cash and cash equivalents-beginning of period			56,228				29,588
Cash and cash equivalents-end of period		$	65,028			$	56,228
Supplemental Disclosure of Cash Flow Information:
Net cash paid for income taxes		$	77,907			$	60,284
Cash paid for interest		$	20,972			$	23,891

Non-GAAP Financial Measures

To supplement MSC's unaudited selected financial data presented consistent with accounting principles generally accepted in the United States ("GAAP"), the Company discloses certain non-GAAP financial measures, including non-GAAP income from operations, non-GAAP operating margin, non-GAAP incremental operating margin, non-GAAP provision for income taxes, non-GAAP net income and non-GAAP diluted earnings per share, that exclude asset impairments and related charges, restructuring and other costs, share reclassification litigation costs, employee retention credit ("ERC") tax benefit, loss on sale of property (prior year), and tax effects, as well as free cash flow conversion, which is a measure calculated using free cash flow, which is a non-GAAP measure.

These non-GAAP financial measures are not presented in accordance with GAAP or an alternative for GAAP financial measures and may be different from similar non-GAAP financial measures used by other companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP financial measure and should only be used to evaluate MSC's results of operations in conjunction with the corresponding GAAP financial measure.

This press release also includes certain forward-looking information that is not presented in accordance with GAAP. The Company believes that a quantitative reconciliation of such forward-looking information to the most directly comparable financial measure calculated and presented in accordance with GAAP cannot be made available without unreasonable efforts because a reconciliation of these non-GAAP financial measures would require the Company to predict the timing and likelihood of potential future events such as restructurings, M&A activity, capital expenditures and other infrequent or unusual gains and losses. Neither the timing or likelihood of these events, nor their probable significance, can be quantified with a reasonable degree of accuracy. Accordingly, a reconciliation of such forward-looking information to the most directly comparable GAAP financial measure is not provided.

Incremental Operating Margin and Adjusted Incremental Operating Margin

The Company defines Incremental Operating Margin as the change in year-over-year Income from Operations as a percentage of the change in year-over-year Net Sales and Adjusted Incremental Operating Margin as Incremental Operating Margin adjusted to exclude such items listed above from Income from Operations. The Company's management believes that Incremental Operating Margin is useful because it shows the direction that operating profit margins are moving as a result of changes in net sales between periods, and that, by excluding the aforementioned items, Adjusted Incremental Operating Margin helps to show, on a comparable basis between periods, trends in the Company's underlying business and results of operations. The Company believes that investors benefit from seeing results from the perspective of management in addition to seeing results presented in accordance with GAAP for the same reasons and purposes for which management uses such non-GAAP financial measures.

Free Cash Flow ("FCF") and Free Cash Flow Conversion ("FCF Conversion")

FCF is a non-GAAP financial measure. FCF is used in addition to and in conjunction with results presented in accordance with GAAP, and FCF should not be relied upon to the exclusion of GAAP financial measures. Management strongly encourages investors to review our financial statements and publicly-filed reports in their entirety and to not rely on any single financial measure. FCF, which we reconcile to "Net cash provided by operating activities," is cash flow from operations reduced by "Expenditures for property, plant and equipment". We believe that FCF, although similar to cash flow from operations, is a useful additional measure since capital expenditures are a necessary component of ongoing operations. Management also views FCF, as a measure of the Company's ability to reduce debt, add to cash balances, pay dividends, and repurchase stock. FCF has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. For example, FCF does not incorporate payments made on finance lease obligations or required debt service payments. In addition, different companies define FCF differently. Therefore, we believe it is important to view FCF as a complement to our entire consolidated statements of cash flows. FCF Conversion is useful to investors for the foregoing reasons and as a measure of the rate at which the Company converts its net income reported in accordance with GAAP to cash inflows, which helps investors assess whether the Company is generating sufficient cash flow to provide an adequate return. A reconciliation of cash provided by operating activities to FCF, operating cash flow conversion and FCF conversion for the fiscal quarters and years ended August 29, 2026 and August 30, 2025, respectively, is shown below.

Results Excluding Asset Impairments and Related Charges, Share Reclassification Litigation Costs, ERC Tax Benefit, Restructuring and Other Costs, Loss on Sale of Property (prior year), and tax effects

In calculating certain non-GAAP financial measures, we exclude asset impairments and related charges, restructuring and other costs, share reclassification litigation costs, ERC tax benefit, loss on sale of property (prior year), and tax effects. Management makes these adjustments to facilitate a review of the Company's operating performance on a comparable basis between periods, for comparison with forecasts and strategic plans, for identifying and analyzing trends in the Company's underlying business and for benchmarking performance externally against competitors. We believe that investors benefit from seeing results from the perspective of management in addition to seeing results presented in accordance with GAAP for the same reasons and purposes for which management uses such non-GAAP financial measures.

MSC INDUSTRIAL DIRECT CO., INC.
Reconciliation of GAAP and Non-GAAP Financial Information
Fiscal Quarters and Years Ended August 29, 2026 and August 30, 2025
(dollars in thousands, except percentages)

		Fiscal Quarters Ended								Fiscal Years Ended
		August 29, 2026				August 30, 2025				August 29, 2026				August 30, 2025
(a) Net cash provided by operating activities		$	80,965			$	80,256			$	306,500			$	333,717
(b) Expenditures for property, plant and equipment		$	(17,214	)		$	(21,731	)		$	(81,344	)		$	(92,840	)
(a-b) = (c) Free cash flow		$	63,751			$	58,525			$	225,156			$	240,877
(d) Net income		$	47,939			$	56,134			$	219,910			$	197,836
(a)/(d) Operating cash flow conversion			169	%			143	%			139	%			169	%
(c)/(d) Free cash flow conversion			133	%			104	%			102	%			122	%

MSC INDUSTRIAL DIRECT CO., INC.
Reconciliation of GAAP and Non-GAAP Financial Information
Fiscal Quarter Ended August 29, 2026
(In thousands, except percentages and per share data)

	GAAP Financial Measure			Items Affecting Comparability									Non-GAAP Financial Measure
	Total MSC Industrial			Restructuring and Other Costs			Share Reclassification Litigation Costs			Asset Impairments and Related Charges			Adjusted Total MSC Industrial
Net Sales	$	1,079,162		$	-		$	-		$	-		$	1,079,162
Cost of Goods Sold		640,579			-			-			-			640,579
Gross Profit		438,583			-			-			-			438,583
Gross Margin		40.6	%		-	%		-	%		-	%		40.6	%
Operating Expenses		322,664			-			1,841			-			320,823
Operating Expenses as % of Sales		29.9	%		-	%		(0.2	)%		-	%		29.7	%
Restructuring and Other Costs		1,355			1,355			-			-			-
Asset impairment and related charges		41,774			-			-			41,774			-
Income from Operations		72,790			(1,355	)		(1,841	)		(41,774	)		117,760
Operating Margin		6.7	%		0.1	%		0.2	%		3.9	%		10.9	%
Total Other Expense		(8,521	)		-			-			-			(8,521	)
Income before provision for income taxes		64,269			(1,355	)		(1,841	)		(41,774	)		109,239
Provision for income taxes		16,330			(344	)		(468	)		(10,605	)		27,747
Net income		47,939			(1,011	)		(1,373	)		(31,169	)		81,492
Net loss attributable to noncontrolling interest		-			-			-			-			-
Net income attributable to MSC Industrial	$	47,939		$	(1,011	)	$	(1,373	)	$	(31,169	)	$	81,492
Net income per common share:
Diluted	$	0.85		$	(0.02	)	$	(0.02	)	$	(0.56	)	$	1.45

*Individual amounts may not agree to the total due to rounding.

MSC INDUSTRIAL DIRECT CO., INC.
Reconciliation of GAAP and Non-GAAP Financial Information
Fiscal Year Ended August 29, 2026
(In thousands, except percentages and per share data)

		GAAP Financial Measure			Items Affecting Comparability												Non-GAAP Financial Measure
		Total MSC Industrial			Restructuring and Other Costs			Share Reclassification Litigation Costs			ERC Tax Benefit			Asset Impairments and Related Charges			Adjusted Total MSC Industrial
Net Sales		$	4,009,703		$	-		$	-		$	-		$	-		$	4,009,703
Cost of Goods Sold			2,370,450			-			-			-			-			2,370,450
Gross Profit			1,639,253			-			-			-			-			1,639,253
Gross Margin			40.9	%		-	%		-	%		-	%		-	%		40.9	%
Operating Expenses			1,266,344			-			6,381			-			-			1,259,963
Operating Expenses as % of Sales			31.6	%		-	%		(0.2	)%		-	%		-	%		31.4	%
Restructuring and Other Costs			8,679			8,679			-			-			-			-
Asset impairment and related charges			43,664			-			-			-			43,664			-
Income from Operations			320,566			(8,679	)		(6,381	)		-			(43,664	)		379,290
Operating Margin			8.0	%		0.2	%		0.2	%		-	%		1.1	%		9.5	%
Total Other Expense			(28,521	)		-			-			5,129			-			(33,650	)
Income before provision for income taxes			292,045			(8,679	)		(6,381	)		5,129			(43,664	)		345,640
Provision for income taxes			72,135			(2,196	)		(1,614	)		1,298			(11,072	)		85,719
Net income			219,910			(6,483	)		(4,767	)		3,831			(32,592	)		259,921
Net loss attributable to noncontrolling interest			(2,679	)		-			-			-			-			(2,679	)
Net income attributable to MSC Industrial		$	222,589		$	(6,483	)	$	(4,767	)	$	3,831		$	(32,592	)	$	262,600
Net income per common share:
Diluted		$	3.98		$	(0.12	)	$	(0.09	)	$	0.07		$	(0.58	)	$	4.69

*Individual amounts may not agree to the total due to rounding

MSC INDUSTRIAL DIRECT CO., INC.
Reconciliation of GAAP and Non-GAAP Financial Information
Fiscal Quarters Ended August 29, 2026 and August 30, 2025
(In thousands, except percentages and per share data)

	GAAP Financial Measure			Items Affecting Comparability									Non-GAAP Financial Measure
	Total MSC Industrial			Restructuring and Other Costs			Share Reclassification Litigation Costs			Asset Impairments and Related Charges			Adjusted Total MSC Industrial
Net Sales - quarter ended August 29, 2026	$	1,079,162		$	-		$	-		$	-		$	1,079,162
Net Sales - quarter August 30, 2025		978,175			-			-			-			978,175
Income from Operations - quarter ended August 29, 2026		72,790			(1,355	)		(1,841	)		(41,774	)		117,760
Income from Operations - quarter ended August 30, 2025		84,302			(4,569	)		(1,450	)		-			90,321
Incremental Operating Margin - quarter ended August 29, 2026		(11.4	)%		(3.2	)%		0.4	%		41.4	%		27.2	%

*Individual amounts may not agree to the total due to rounding.

MSC INDUSTRIAL DIRECT CO., INC.
Reconciliation of GAAP and Non-GAAP Financial Information
Fiscal Years Ended August 29, 2026 and August 30, 2025
(In thousands, except percentages and per share data)

		GAAP Financial Measure			Items Affecting Comparability												Non-GAAP Financial Measure
		Total MSC Industrial			Restructuring and Other Costs			Share Reclassification Litigation Costs			Asset Impairments and Related Charges			Loss on Sale of Property			Adjusted Total MSC Industrial
Net Sales - year ended August 29, 2026		$	4,009,703		$	-		$	-		$	-		$	-		$	4,009,703
Net Sales - year ended August 30, 2025			3,769,521			-			-			-			-			3,769,521
Income from Operations - year ended August 29, 2026			320,566			(8,679	)		(6,381	)		(43,664	)		-			379,290
Income from Operations - year ended August 30, 2025			301,563			(10,999	)		(2,094	)		-			(1,167	)		315,823
Incremental Operating Margin - year ended August 29, 2026			7.9	%		(1.0	)%		1.8	%		18.2	%		(0.5	)%		26.4	%

*Individual amounts may not agree to the total due to rounding.

MSC INDUSTRIAL DIRECT CO., INC.
Reconciliation of GAAP and Non-GAAP Financial Information
Fiscal Quarter Ended August 30, 2025
(In thousands, except percentages and per share data)

		GAAP Financial Measure				Items Affecting Comparability								Non-GAAP Financial Measure
		Total MSC Industrial				Restructuring and Other Costs				Share Reclassification Litigation Costs				Adjusted Total MSC Industrial
Net Sales		$	978,175			$	-			$	-			$	978,175
Cost of Goods Sold			583,196				-				-				583,196
Gross Profit			394,979				-				-				394,979
Gross Margin			40.4	%			-	%			-	%			40.4	%
Operating Expenses			306,108				-				1,450				304,658
Operating Expenses as % of Sales			31.3	%			-	%			(0.1	)%			31.1	%
Restructuring and Other Costs			4,569				4,569				-				-
Income from Operations			84,302				(4,569	)			(1,450	)			90,321
Operating Margin			8.6	%			0.5	%			0.1	%			9.2	%
Total Other Expense			(8,153	)			-				-				(8,153	)
Income before provision for income taxes			76,149				(4,569	)			(1,450	)			82,168
Provision for income taxes			20,015				(1,254	)			(399	)			21,668
Net income			56,134				(3,315	)			(1,051	)			60,500
Net loss attributable to noncontrolling interest			(412	)			-				-				(412	)
Net income attributable to MSC Industrial		$	56,546			$	(3,315	)		$	(1,051	)		$	60,912
Net income per common share:
Diluted		$	1.01			$	(0.06	)		$	(0.02	)		$	1.09

*Individual amounts may not agree to the total due to rounding.

MSC INDUSTRIAL DIRECT CO., INC.
Reconciliation of GAAP and Non-GAAP Financial Information
Fiscal Year Ended August 30, 2025
(In thousands, except percentages and per share data)

		GAAP Financial Measure			Items Affecting Comparability									Non-GAAP Financial Measure
		Total MSC Industrial			Restructuring and Other Costs			Loss on Sale of Property			Share Reclassification Litigation Costs			Adjusted Total MSC Industrial
Net Sales		$	3,769,521		$	-		$	-		$	-		$	3,769,521
Cost of Goods Sold			2,233,386			-			-			-			2,233,386
Gross Profit			1,536,135			-			-			-			1,536,135
Gross Margin			40.8	%		-	%		-	%		-	%		40.8	%
Operating Expenses			1,223,573			-			1,167			2,094			1,220,312
Operating Expenses as % of Sales			32.5	%		-	%		0.0	%		(0.1	)%		32.4	%
Restructuring and Other Costs			10,999			10,999			-			-			-
Income from Operations			301,563			(10,999	)		(1,167	)		(2,094	)		315,823
Operating Margin			8.0	%		0.3	%		0.0	%		0.1	%		8.4	%
Total Other Expense			(37,985	)		-			-			-			(37,985	)
Income before provision for income taxes			263,578			(10,999	)		(1,167	)		(2,094	)		277,838
Provision for income taxes			65,742			(2,781	)		(295	)		(530	)		69,348
Net income			197,836			(8,218	)		(872	)		(1,564	)		208,490
Net loss attributable to noncontrolling interest			(1,492	)		-			-			-			(1,492	)
Net income attributable to MSC Industrial		$	199,328		$	(8,218	)	$	(872	)	$	(1,564	)	$	209,982
Net income per common share:
Diluted		$	3.57		$	(0.15	)	$	(0.02	)	$	(0.03	)	$	3.76

*Individual amounts may not agree to the total due to rounding.

SOURCE: MSC Industrial Direct Co.

View the original press release on ACCESS Newswire

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were MSC Industrial Supply's fiscal 2026 fourth-quarter earnings?

MSC reported diluted earnings per share of $0.85, down 15.8% year over year, while adjusted diluted earnings per share rose 33.0% to $1.45. Net income attributable to MSC declined 15.2% to $47.9 million. The quarter included $41.774 million in asset impairment and related charges.

What is MSC Industrial Supply's fiscal 2027 first-quarter outlook?

MSC expects average daily sales growth of 9.5% to 10.5% year over year and an adjusted operating margin of 9.5% to 10.1% for fiscal 2027's first quarter.

What capital spending and tax rate does MSC Industrial Supply forecast for fiscal 2027?

MSC forecasts fiscal 2027 capital expenditures of approximately $90 million–$100 million and an effective tax rate of approximately 24.5%–25.5%.