MSC Industrial Direct (MSM) Q4 2026 earnings summary

Executive summary

• Record Q4 FY26 net sales of $1,079.2M, up 10.3% reported and 8.6% on an ADS basis; adjusted operating margin reached 10.9%.

• FY26 net sales were $4,009.7M, up 6.4%; core customer growth reached ~10% in Q4, with improving volumes and productivity trends.

Financial highlights

• Q4 gross profit was $438.6M and gross margin was 40.6%, up 20 bps YoY; adjusted operating profit was $117.8M, up 30.5%.

• Q4 reported operating margin was 6.7% vs. 8.6%; adjusted margin was 10.9% vs. 9.2%, with adjusted incremental margin of 27.2%.

• Q4 GAAP diluted EPS was $0.85 vs. $1.01; adjusted diluted EPS was $1.45 vs. $1.09, up 33%.

• FY26 GAAP diluted EPS was $3.98 and adjusted diluted EPS was $4.69; FY26 gross margin was 40.9%, up 10 bps YoY.

Outlook and guidance

• Q1 FY27 ADS growth guidance is 9.5%–10.5%, with adjusted operating margin of 9.5%–10.1%; sales trends were low double-digit to date.

• FY27 guidance: D&A $100M–$105M, interest and other expense $40M–$45M, capex $90M–$100M, tax rate 24.5%–25.5%, and FCF conversion 80%–90%.

• Q1 gross margin is expected to face inflation, pricing-timing, freight and employee-cost headwinds; pricing is expected near 7%, with 3%–4% full-year carryover impact.

• Management cited a 20%–30% incremental-margin framework, with Q1 in the mid-20s; inflation, repricing lags, freight and labor costs may weigh on flow-through.

• Outlook factors in customer shutdowns, tougher comparisons, limited macro visibility and a historical ~3% Q2 sequential ADS decline.