MSC Industrial Direct Co. Inc. (NYSE:MSM) reported better-than-expected fiscal fourth-quarter earnings and revenue Thursday, driven by higher sales and improved profitability.

The industrial supplies distributor reported adjusted earnings of $1.45 per share, beating analysts’ estimate of $1.41 and rising 33% from $1.09 a year earlier.

Revenue increased 10.3% year over year to $1.079 billion, exceeding the $1.072 billion consensus estimate.

MSC Industrial Reports Strong Fourth-Quarter Sales

Average daily sales, which measure revenue per selling day, rose 8.6% year over year. GAAP diluted earnings per share fell to 85 cents from $1.01 a year earlier, highlighting the difference between reported and adjusted profitability.

MSC Industrial reported $41.8 million in asset impairment and related charges during the quarter, contributing to a 13.6% decline in operating income to $72.8 million.

However, adjusted operating income rose 30.5% to $117.8 million, while adjusted operating margin expanded to 10.9% from 9.2% a year earlier.

Margins and Cash Flow

MSC Industrial reported an operating margin of 6.7%, compared with an adjusted operating margin of 10.9%.

For fiscal 2026, net sales increased 6.4% to $4.009 billion. Adjusted earnings rose to $4.69 per share from $3.76 in the previous year.

The company generated free cash flow equivalent to 102% of net income during the fiscal year.

Cash and cash equivalents totaled $65 million as of Aug. 29.

MSC Industrial Forecasts Continued Sales Growth

For the first quarter of fiscal 2027, MSC Industrial expects average daily sales to grow 9.5% to 10.5% year over year, with an adjusted operating margin of 9.5% to 10.1%.

For the full fiscal year, the company projects free cash flow conversion of 80% to 90% and capital expenditures of $90 million to $100 million.

MSC Industrial also expects an effective tax rate of 24.5% to 25.5%.

CEO Highlights Record Sales and Strong Demand

CEO Martina McIsaac said the company finished fiscal 2026 on a strong note, with fourth-quarter results exceeding internal expectations and quarterly sales reaching a record.

McIsaac added that sales growth during the early part of the fiscal first quarter was running at a low double-digit pace, signaling continued demand momentum.

MSM Price Action: MSC Industrial Direct Co shares were unchanged at $132.82 during premarket trading on Thursday. The stock is trading near its 52-week high of $133.65, according to Benzinga Pro data.

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