Fiscal 2026 Q4 and full year
Filed Oct 22, 2026MSC Industrial Supply Co. reports fiscal 2026 fourth quarter and full year results
Fiscal 2026 Q4 sales reached record quarterly levels, average daily sales exceeded the high end of guidance, and adjusted operating margin of 10.9% exceeded the high end of outlook. GAAP operating income and diluted EPS declined because of asset impairment and related charges.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q4 net salesGAAP | $1.08B | – | 10.3% |
| Q4 average daily sales growthother | 8.6% | – | 8.6% on an average daily sales basis |
| Q4 gross marginGAAP | 40.6% | – | – |
| Q4 income from operationsGAAP | $72.8M | – | (13.6)% |
| Q4 operating marginGAAP | 6.7% | – | – |
| Q4 adjusted income from operationsnon-GAAP | $117.8M | – | 30.5% |
| Q4 adjusted operating marginnon-GAAP | 10.9% | – | – |
| Q4 adjusted incremental operating marginnon-GAAP | 27.2% | – | – |
| Q4 net income attributable to MSCGAAP | $47.9M | – | (15.2)% |
| Q4 adjusted net income attributable to MSCnon-GAAP | $81.5M | – | 33.8% |
| Q4 diluted EPSGAAP | $0.85 | – | (15.8)% |
| Q4 adjusted diluted EPSnon-GAAP | $1.45 | – | 33.0% |
| Q4 net cash provided by operating activitiesGAAP | $80.97M | – | – |
| Q4 free cash flownon-GAAP | $63.75M | – | – |
| Q4 operating cash flow conversionother | 169% | – | – |
| Q4 free cash flow conversionnon-GAAP | 133% | – | – |
| Fiscal 2026 net salesGAAP | $4.01B | – | 6.4% |
| Fiscal 2026 average daily sales growthother | 6.0% | – | 6.0% on an average daily sales basis |
| Fiscal 2026 gross marginGAAP | 40.9% | – | – |
| Fiscal 2026 income from operationsGAAP | $320.6M | – | 6.3% |
| Fiscal 2026 operating marginGAAP | 8.0% | – | – |
| Fiscal 2026 adjusted income from operationsnon-GAAP | $379.3M | – | 20.1% |
| Fiscal 2026 adjusted operating marginnon-GAAP | 9.5% | – | – |
| Fiscal 2026 net income attributable to MSCGAAP | $222.6M | – | 11.7% |
| Fiscal 2026 adjusted net income attributable to MSCnon-GAAP | $262.6M | – | 25.0% |
| Fiscal 2026 diluted EPSGAAP | $3.98 | – | 11.5% |
| Fiscal 2026 adjusted diluted EPSnon-GAAP | $4.69 | – | 24.7% |
| Fiscal 2026 net cash provided by operating activitiesGAAP | $306.5M | – | – |
| Fiscal 2026 free cash flownon-GAAP | $225.2M | – | – |
| Fiscal 2026 operating cash flow conversionother | 139% | – | – |
| Fiscal 2026 free cash flow conversionnon-GAAP | 102% | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
First Quarter Fiscal 2027 and Full-Year Fiscal 2027 outlook
- Tax rateEffective tax rate of ~24.5%-25.5%
- NoteADS Growth (YoY) 9.5% to 10.5%
- NoteAdjusted Operating Margin 9.5% to 10.1%
- NoteDepreciation and amortization expense of ~$100M-$105M
- NoteInterest and other expense of ~$40M-$45M
- NoteCapital expenditures of ~$90M-$100M
- NoteFree cash flow conversion of ~80%-90%
Capital returns
- Repurchases of Class A Common Stock of $(13,967) for the fiscal year ended August 29, 2026
- Payments of regular cash dividends of $(194,338) for the fiscal year ended August 29, 2026
- Repurchases of Class A Common Stock of $(39,317) for the fiscal year ended August 30, 2025
- Payments of regular cash dividends of $(189,650) for the fiscal year ended August 30, 2025
What drove it
- Core customer growth of approximately 10%
- Accelerating growth in National Accounts
- Price benefits and stronger volumes
- Further progress on the cost structure
- First-quarter sales trends showing low double-digit growth to date
Concerns
- Asset impairment and related charges of $41,774 in the fiscal quarter ended August 29, 2026
- Inflationary headwinds
- Tougher comparisons looking ahead
- Fiscal 2026 operating cash flow conversion of 139% versus 169% in the prior fiscal year
- Fiscal 2026 free cash flow conversion of 102% versus 122% in the prior fiscal year
What to watch
- First Quarter Fiscal 2027 ADS Growth outlook of 9.5% to 10.5%
- First Quarter Fiscal 2027 adjusted operating margin outlook of 9.5% to 10.1%
- Full-Year Fiscal 2027 free cash flow conversion outlook of ~80%-90%
- Full-Year Fiscal 2027 capital expenditures outlook of ~$90M-$100M
- The Company’s reporting date for the fiscal 2027 first quarter is scheduled for January 6, 2027
Balance sheet and cash flow
- Cash and cash equivalents of $65,028 as of August 29, 2026, versus $56,228 as of August 30, 2025
- Current portion of debt including obligations under finance leases of $317,191 as of August 29, 2026, versus $316,868 as of August 30, 2025
- Long-term debt including obligations under finance leases of $159,756 as of August 29, 2026, versus $168,831 as of August 30, 2025
- Inventories of $688,738 as of August 29, 2026, versus $644,090 as of August 30, 2025
- Accounts receivable, net of allowance for credit losses of $451,550 as of August 29, 2026, versus $423,306 as of August 30, 2025
- Expenditures for property, plant and equipment of $(81,344) for the fiscal year ended August 29, 2026, versus $(92,840) for the fiscal year ended August 30, 2025
Analysis
MSC ended fiscal 2026 with a strong fourth quarter. Q4 net sales were $1,079.2 million, up 10.3%, while average daily sales increased 8.6%. Management attributed the result to price benefits, stronger volumes, core customer growth of approximately 10%, and accelerating growth in National Accounts. The company described sales as record quarterly levels and said first-quarter fiscal 2027 sales trends were showing low double-digit growth to date.
The key earnings distinction was between GAAP results and adjusted results. Q4 GAAP income from operations fell to $72.8 million from $84.3 million and GAAP diluted EPS declined to $0.85 from $1.01. The quarter included $41,774 of asset impairment and related charges, as well as restructuring and other costs and share reclassification litigation costs. Excluding these items, adjusted income from operations rose to $117.8 million from $90.3 million, adjusted operating margin expanded to 10.9% from 9.2%, and adjusted diluted EPS rose to $1.45 from $1.09.
For the full year, net sales increased to $4,009.7 million from $3,769.5 million. GAAP operating margin was unchanged at 8.0%, while adjusted operating margin improved to 9.5% from 8.4%. Fiscal 2026 GAAP diluted EPS increased to $3.98 from $3.57, and adjusted diluted EPS increased to $4.69 from $3.76. The full-year results included $43,664 of asset impairment and related charges, $8,679 of restructuring and other costs, and $6,381 of share reclassification litigation costs.
Cash generation remained substantial but was lower than the prior year on the measures reported. Net cash provided by operating activities was $306,500 versus $333,717, and free cash flow was $225,156 versus $240,877. Operating cash flow conversion was 139% versus 169%, while free cash flow conversion was 102% versus 122%. The company made payments of regular cash dividends of $(194,338) and repurchased Class A Common Stock of $(13,967). Cash and cash equivalents ended the year at $65,028, while current and long-term debt including obligations under finance leases were $317,191 and $159,756, respectively.
The fiscal 2027 outlook calls for first-quarter ADS growth of 9.5% to 10.5% and adjusted operating margin of 9.5% to 10.1%. For the full year, management expects capital expenditures of ~$90M-$100M and free cash flow conversion of ~80%-90%. The principal reported execution points are whether sales momentum continues through tougher comparisons, whether price and volume benefits persist, and whether adjusted operating margin remains within the guided range despite inflationary headwinds.
Management, verbatim
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.
Martina McIsaac, President and Chief Executive Officer
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%.
Rob Kuhns, Executive Vice President and Chief Financial Officer
While we remain mindful of inflationary headwinds and tougher comparisons looking ahead, we are confident that profitable growth will remain the trend.
Martina McIsaac, President and Chief Executive Officer
Not in the filing
stated, not guessed- Segment revenue and segment profitability were not reported.
- Prior-quarter comparisons were not reported for the listed Q4 metrics.
- Q4 and fiscal 2026 effective tax rates were not reported.
- First Quarter Fiscal 2027 revenue guidance was not reported as a dollar amount.
- First Quarter Fiscal 2027 gross margin and operating expense guidance were not reported.
- Previous-release outlook was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.