MSC INDUSTRIAL DIRECT CO INC
For the period ended Nov 29, 2025. Filed Jan 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Nov 29, 2025 · Filed Jan 7, 2026
MSM$113.27+2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-05-31; filed 2025-07-01.
0001003078-25-000075
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-11-29; filed 2026-01-07.
0001003078-26-000012
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 115 previous paragraphs and 89 current paragraphs.
48 unchanged; 34 reworded; 7 added; 27 removed; 6 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
•We incurred $4.9 million in Restructuring and other costs, compared to $2.3 million for the same period in the prior fiscal year, consisting primarily of current year severance and separation costs associated with the Company’s sales optimization efforts as well as consulting-related costs in the current and prior fiscal year.
Current report
Operating expenses increased 2.6%, or $8.0 million, to $311.6 million for the thirteen-week period ended November 29, 2025, as compared to $303.6 million for the same period in the prior fiscal year. Operating expenses were 32.3% of net sales for the thirteen-week period ended November 29, 2025, as compared to 32.7% for the same period in the prior fiscal year. The increase in Operating expenses was primarily a result of advertising expense and higher depreciation and amortization expense. The decrease in operating expenses as a percentage of net sales was primarily due to growth in net sales outpacing the increase in Operating expenses.
Current report
Depreciation and amortization was $24.6 million for the thirteen-week period ended November 29, 2025, as compared to $21.2 million for the same period in the prior fiscal year. The primary drivers of the increase in depreciation and amortization were increased capital expenditures related to E-commerce and digital initiatives.
Current report
•an increase in prepaid expenses and other current assets in the current fiscal year due primarily to an increase in vendor rebate receivables and IT-related prepayments;
Current report
•an increase in the balances of accounts receivable and inventories in the current fiscal year relative to the prior year. The higher balance of inventories is due to inventory management countermeasures in response to tariffs and the higher accounts receivable balance is due to higher sales levels;
Current report
•an increase in net income
Current report
•acquisition of the remaining interest of Wm. F. Hurst Co., LLC for $8.2 million during the thirteen weeks ended November 29, 2025, which increased the Company's ownership from 80% to 100%.
Removed paragraphs (27)
Previous report
•We disposed of our customer fulfillment center in Columbus, Ohio (the “Columbus CFC”) with a sales price of $32.0 million, which resulted in a loss on sale of property of approximately $1.2 million after the settlement of certain closing costs and fees. See Note 8, “Property, Plant and Equipment” in the Notes to Condensed Consolidated Financial Statements for additional information.
Previous report
During the third quarter of fiscal year 2025, the Company continued to experience soft demand for the products and services it offers. This soft demand was felt more acutely in the heavy manufacturing industry, which represented 58% of our revenues during the thirteen-week period ended May 31, 2025. The IP index for certain end-markets such as Aerospace and Machinery and Equipment indicates improvement; however, others such as Automotive and Fabricated Metals continue to show contraction for the third quarter of fiscal year 2025. Despite moderate improvement in certain end-markets, the demand environment for the Company’s products was softer than the demand environment for the economy as a whole, which we believe is due to the concentration of the Company’s customers in these and other subindex industries, which lagged the IP index as a whole.
Previous report
(3)Includes changes in customer end-market classifications as a result of the transition from the Standard Industrial Classification (SIC) to the North American Industry Classification System (NAICS) in the first quarter of fiscal year 2025.
Previous report
(4)Includes reclassifications of certain customers during fiscal year 2024, primarily between national account customers and core and other customers.
Previous report
Operating expenses increased 8.1%, or $23.3 million, to $312.3 million for the thirteen-week period ended May 31, 2025, as compared to $289.0 million for the same period in the prior fiscal year. Operating expenses were 32.2% of net sales for the thirteen-week period ended May 31, 2025, as compared to 29.5% for the same period in the prior fiscal year. The increase in Operating expenses and Operating expenses as a percentage of net sales was primarily due to higher payroll and payroll-related costs and investments supporting our solutions growth.
Previous report
We incurred $2.7 million in Restructuring and other costs for the thirteen-week period ended May 31, 2025, as compared to $4.7 million for the same period in the prior fiscal year. The decrease was primarily due to a reduction in consulting-related costs associated with the Company’s strategic realignment efforts to optimize its supply chain and distribution network, partially offset by an increase in associate severance and separation costs. See Note 11, “Restructuring and Other Costs” in the Notes to Condensed Consolidated Financial Statements for additional information.
Previous report
The Company’s effective tax rate for the thirteen-week period ended May 31, 2025 was 24.3%, as compared to 25.2% for the same period in the prior fiscal year. The decrease in the effective tax rate was primarily due to non-deductibility of certain transaction costs associated with the Reclassification in the prior fiscal year.
Previous report
Thirty-Nine-Week Period Ended May 31, 2025 Compared to the Thirty-Nine-Week Period Ended June 1, 2024
Previous report
Net Sales
Previous report
Net sales decreased 2.7%, or $77.3 million, to $2,791.3 million for the thirty-nine-week period ended May 31, 2025, as compared to $2,868.7 million for the same period in the prior fiscal year. The $77.3 million decrease in net sales was comprised of $97.0 million of lower sales volume and $6.5 million of unfavorable foreign exchange impact, partially offset by $21.0 million of net sales from fiscal year 2024 acquisitions and a $5.2 million positive impact from pricing, inclusive of changes in customer and product mix, discounting and other items. Of the $77.3 million decrease in net sales during the thirty-nine-week period ended May 31, 2025, sales to our core and other customers decreased $66.4 million, sales to our national account customers decreased $30.4 million and sales to our public sector customers increased $19.5 million.
Previous report
ADS Percentage Change
Previous report
(3)Includes changes in customer end-market classifications as a result of the transition from the Standard Industrial Classification (SIC) to the North American Industry Classification System (NAICS) in the first quarter of fiscal year 2025.
Previous report
(4)Includes reclassifications of certain customers during fiscal year 2024, primarily between national account customers and core and other customers.
Previous report
Gross Profit
Previous report
Gross profit of $1,141.2 million for the thirty-nine-week period ended May 31, 2025 decreased $41.0 million, or 3.5%, compared to the same period in the prior fiscal year. Gross profit margin was 40.9% for the thirty-nine-week period ended May 31, 2025, as compared to 41.2% for the same period in the prior fiscal year. The decrease in gross profit was primarily a result of lower sales volume, as described above. The decrease in gross profit margin was primarily a result of higher inventory cost and customer mix, as our sales to national account and public sector customers typically transact at lower gross profit margins than the business as a whole. Recent acqu isitions also presented an additional headwind for gross profit margin.
Previous report
Operating Expenses
Previous report
Operating expenses increased 5.4%, or $46.6 million, to $917.5 million for the thirty-nine-week period ended May 31, 2025, as compared to $870.9 million for the same period in the prior fiscal year. Operating expenses were 32.9% of net sales for the thirty-nine-week period ended May 31, 2025, as compared to 30.4% for the same period in the prior fiscal year. The increase in Operating expenses and Operating expenses as a percentage of net sales primarily was due to higher payroll and payroll-related costs and investments supporting our digital initiatives and solutions growth.
Previous report
Payroll and payroll-related costs for the thirty-nine-week period ended May 31, 2025 were 56.9% of total Operating expenses, as compared to 56.4% for the same period in the prior fiscal year. Payroll and payroll-related costs, which include salary, incentive compensation, sales commission, and fringe benefit costs, increased $30.8 million for the thirty-nine-week period ended May 31, 2025. The majority of this increase compared to the same period in the prior fiscal year was due to higher incentive compensation as well as higher salary expenses from our annual merit increases.
Previous report
Restructuring and Other Costs
Previous report
Income from Operations
Previous report
Income from operations decreased 27.5%, or $82.3 million, to $217.3 million for the thirty-nine-week period ended May 31, 2025, as compared to $299.5 million for the same period in the prior fiscal year. Income from operations as a percentage of net sales decreased to 7.8% for the thirty-nine-week period ended May 31, 2025, as compared to 10.4% for the same period in the prior fiscal year. The decrease in income from operations as a percentage of net sales was primarily attributable to, as described above, a decrease in gross profit margin and an increase in Operating expenses as a percentage of net sales during the thirty-nine-week period ended May 31, 2025.
Previous report
Total Other Expense
Previous report
Total other expense decreased 9.4%, or $3.1 million, to $29.8 million for the thirty-nine-week period ended May 31, 2025, as compared to $32.9 million for the same period in the prior fiscal year. The decrease was primarily due to lower interest costs on our Credit Facilities and lower fees incurred associated with the Receivables Purchase Agreement entered into during fiscal year 2023.
Previous report
Provision for Income Taxes
Previous report
Net Income
Previous report
•a decrease in net income;
Previous report
•a decline in inventories in the prior year period primarily attributable to lower sales and purchase volume as well as inventory optimization efforts; partially offset by
Reworded paragraphs (34)
Previous wording
MSC is a leading North American distributor of a broad range of metalworking and maintenance, repair and operations (“MRO”) products and services. We help our customers drive greater productivity, profitability and growth with inventory management and other supply chain solutions and deep expertise from more than 80 years of working with customers across industries. We offer approximately 2.4 million active, saleable stock-keeping units through our catalogs; our brochures; our E-commerce channels, including our website, www.mscdirect.com (the “MSC website”); our inventory management solutions; and our customer care centers, customer fulfillment centers (“CFCs”), regional inventory centers and warehouses. We service our customers from five CFCs, nine regional inventory centers, 39 warehouses, and five manufacturing locations. We continue to implement our strategies to gain market share, generate new customers, increase sales to existing customers and diversify our customer base.
Current wording
MSC is a leading North American distributor of a broad range of metalworking and maintenance, repair and operations (“MRO”) products and services. We help our customers drive greater productivity, profitability and growth with inventory management and other supply chain solutions and deep expertise from more than 80 years of working with customers across industries. We offer approximately 2.5 million active, saleable stock-keeping units through our E-commerce channels, including our website, www.mscdirect.com (the “MSC website”); our inventory management solutions; our catalogs; our brochures; and our customer care centers, customer fulfillment centers (“CFCs”), regional inventory centers and warehouses. We service our customers from five CFCs, nine regional inventory centers, 37 warehouses, and five manufacturing locations. We continue to implement our strategies to gain market share, generate new customers, increase sales to existing customers and diversify our customer base.
Previous wording
Our business model focuses on providing overall procurement cost reduction and just-in-time delivery to meet our customer’s needs. Many of our products are carried in stock, and orders for these in-stock products are typically fulfilled the day on which the order is received. We focus on offering inventory, process and procurement solutions that reduce supply chain costs and improve plant floor productivity for our customers. We aim to achieve ongoing cost reductions throughout our business by implementing cost-saving strategies and leveraging our existing infrastructure. Additionally, we provide our customers with further procurement cost-saving solutions through technologies such as our Vendor Managed Inventory (“VMI”), Customer Managed Inventory (“CMI”) and vending programs. Our vending machines in service totaled 28,741 as of May 31, 2025, compared to 26,438 as of June 1, 2024, and our In-Plant programs totaled 399 locations as of May 31, 2025, compared to 325 as of June 1, 2024. Our sales force, which focuses on a more complex and high-touch role, drives value for our customers by enabling them to achieve higher levels of growth, profitability and productivity. Our field sales and service associate headcount was 2,721 as of May 31, 2025, compared to 2,664 as of June 1, 2024.
Current wording
Our business model focuses on providing overall procurement cost reduction and just-in-time delivery to meet our customer’s needs. Many of our products are carried in stock, and orders for these in-stock products are typically fulfilled the day on which the order is received. We focus on offering inventory, process and procurement solutions that reduce supply chain costs and improve plant floor productivity for our customers. We aim to achieve ongoing cost reductions throughout our business by implementing cost-saving strategies and leveraging our existing infrastructure. Additionally, we provide our customers with further procurement cost-saving solutions through technologies such as our Vendor Managed Inventory (“VMI”), Customer Managed Inventory (“CMI”) and vending programs — helping reduce downtime and ensure critical products are available when and where they are needed. Our vending machines in service totaled 30,177 as of November 29, 2025, compared to 27,747 as of November 30, 2024, and our In-Plant programs totaled 418 locations as of November 29, 2025, compared to 369 as of November 30, 2024. Our sales force, which focuses on a more complex and high-touch role, drives value for our customers by enabling them to achieve higher levels of growth, profitability and productivity. Our field sales and service associate headcount was 2,631 as of November 29, 2025, compared to 2,723 as of November 30, 2024.
Previous wording
Highlights during the thirty-nine weeks ended May 31, 2025 include:
Current wording
Highlights during the thirteen weeks ended November 29, 2025 include:
Previous wording
•We generated $253.5 million of cash from operations, compared to $303.4 million for the same period in the prior fiscal year.
Current wording
•We generated $29.4 million of cash from operations, compared to $101.9 million for the same period in the prior fiscal year.
Previous wording
•We had net borrowings of $12.5 million on our credit facilities and private placement debt, compared to net borrowings of $50.0 million for the same period in the prior fiscal year.
Current wording
•We had net borrowings of $45.0 million on our credit facilities and private placement debt, compared to net borrowings of $11.8 million for the same period in the prior fiscal year.
Previous wording
•We paid out an aggregate $142.3 million in regular cash dividends, compared to an aggregate $140.7 million in regular cash dividends for the same period in the prior fiscal year.
Current wording
•We paid out an aggregate $48.6 million in regular cash dividends, compared to an aggregate $47.5 million in regular cash dividends for the same period in the prior fiscal year.
Previous wording
•We repurchased $39.1 million of MSC’s Class A Common Stock, par value $0.001 per share (“Class A Common Stock”), excluding excise taxes, compared to $167.2 million for the same period in the prior fiscal year. The higher share repurchase volume in the prior year was primarily due to repurchases to offset the share dilution resulting from the reclassification of the Company’s common stock to eliminate the Class B Common Stock (the “Reclassification”).
Current wording
•We repurchased $13.0 million of MSC’s Class A Common Stock, par value $0.001 per share (“Class A Common Stock”), excluding excise taxes, compared to $18.1 million for the same period in the prior fiscal year.
Previous wording
The first phase of our Company-wide initiative, referred to as “Mission Critical,” focused on market share capture and improved profitability. We successfully executed on the first phase of Mission Critical initiatives at the end of fiscal year 2023, which included solidifying our market-leading metalworking business, with an emphasis on selling our product portfolio, expanding our solutions, improving our digital and E-commerce capabilities and diversifying our customers and end-markets. The next phase of our mission critical journey, which began in fiscal year 2024, is anchored in three pillars: (i) maintaining the momentum of the first phase of the mission critical program and our existing growth drivers, (ii) increasing our focus on both core customers and OEM fasteners, and (iii) driving productivity improvements and reducing operating expenses as a percentage of net sales. To accomplish the next phase of our mission critical journey, we intend to leverage investments in advanced analytics to improve supply chain performance, maintain momentum from our category line reviews and upgrade our digital core to unlock productivity within our order-to-cash and procure-to-pay processes. In fiscal year 2024, we completed our web price realignment initiative, and, just before the conclusion of the second quarter of fiscal year 2025, we launched our enhanced marketing efforts and rolled out several E-commerce enhancements, including a streamlined cart and checkout process and improved product discovery functions.
Current wording
The first phase of our Company-wide initiative, referred to as “Mission Critical,” focused on market share capture and improved profitability. We successfully executed on the first phase of Mission Critical initiatives at the end of fiscal year 2023, which included solidifying our market-leading metalworking business, with an emphasis on selling our product portfolio, expanding our solutions, improving our digital and E-commerce capabilities and diversifying our customers and end-markets. The next phase of our Mission Critical journey, which began in fiscal year 2024, is anchored in three pillars: (i) maintaining the momentum of the first phase of the Mission Critical program and our existing growth drivers, (ii) increasing our focus on both core customers and OEM fasteners, and (iii) driving productivity improvements and reducing operating expenses as a percentage of net sales. To accomplish the next phase of our Mission Critical journey, we intend to leverage investments in advanced analytics to improve supply chain performance and upgrade our digital core to unlock productivity within our order-to-cash and procure-to-pay processes. In fiscal year 2024, we completed our web price realignment initiative. In fiscal year 2025, we launched our enhanced marketing efforts, rolled out several E-commerce enhancements and began our sales optimization initiative, which included investment in an enhanced, data-driven territory model to optimize field seller portfolios. The Company continued its sales optimization efforts in the first quarter of fiscal year 2026.
Previous wording
The United States economy has experienced various macroeconomic pressures including an elevated inflationary environment, sustained high interest rates and general economic and political uncertainty. More recently, new and expanded tariffs have contributed to heightened macroeconomic uncertainty. Such pressures have impacted, and may continue to impact in the future, the Company’s business, financial condition and results of operations.
Current wording
The United States economy has experienced various macroeconomic pressures in recent years including pricing pressure from tariffs and inflation, sustained high interest rates and general economic and political uncertainty. The impact from tariffs was most significant in the latter half of the Company's fiscal year 2025 and has continued into the first quarter of fiscal year 2026. Furthermore, as a supplier to the United States federal government, the federal government shutdown, which lasted from October 1, 2025 through November 12, 2025, negatively impacted sales to our public sector end-market during the first quarter of fiscal year 2026. These pressures have impacted, and may continue to impact in the future, the Company’s business, financial condition and results of operations.
Previous wording
We utilize various indices when evaluating the level of our business activity, including the Industrial Production (“IP”) Index. Through statistical analysis, we have found that trends in our customers’ activity have correlated to changes in the IP Index. The IP Index measures short-term changes in industrial production. Growth in the IP Index compared to the prior quarter indicates growth in the manufacturing, mining and utilities industries. Approximately 67% of our revenues came from sales in the manufacturing sector during each of the thirteen- and thirty-nine-week periods ended May 31, 2025. The IP Index over the three months ended May 2025 and the average for the three- and 12-month periods ended May 2025 were as follows:
Current wording
We utilize various indices when evaluating the level of our business activity, including the Industrial Production (“IP”) Index. Through statistical analysis, we have found that trends in our customers’ activity have correlated to changes in the IP Index. The IP Index measures short-term changes in industrial production. Growth in the IP Index compared to the prior quarter indicates growth in the manufacturing, mining and utilities industries. Approximately 67% of our revenues came from sales in the manufacturing sector during the thirteen-week period ended November 29, 2025. After giving effect to the annual technical revisions to calculations of the IP Index which occurred in November 2025, the IP Index over the three months ended November 2025 and the average for the three- and 12-month periods ended November 2025 were as follows:
Previous wording
The average IP Index for the three months ended May 2025 was 103.7, mostly flat compared to the prior quarter average of 103.6 and an increase from the comparative quarter in the prior year average of 102.7.
Current wording
The average IP Index for the three months ended November 2025 was 101.7, flat compared to the prior quarter average of 101.7 and an increase from an average of 99.5 during the comparative quarter in the prior year.
Previous wording
We will monitor the current economic conditions for the impact on our customers and markets and assess both risks and opportunities that may affect our business and operations.
Current wording
During the first quarter of fiscal year 2026, the Company experienced a more stable demand environment compared to much of fiscal year 2025. The heavy manufacturing industry, which represented 58% of our revenues during the thirteen-week period ended November 29, 2025, showed signs of expansion. Several IP subindexes, in particular Aerospace, improved, while others, such as Automotive, signaled contraction. Non-manufacturing demand, in particular the Company’s public sector end-market, was hampered by the federal government shutdown which resulted in lower sales volumes in October and November. We will monitor the current economic conditions for the impact on our customers and markets and assess both risks and opportunities that may affect our business and operations.
Previous wording
Net sales decreased 0.8%, or $8.2 million, to $971.1 million for the thirteen-week period ended May 31, 2025, as compared to $979.4 million for the same period in the prior fiscal year. The $8.2 million decrease in net sales was comprised of $20.4 million of lower sales volume and $1.0 million of unfavorable foreign exchange impact, partially offset by $5.5 million of net sales from our fiscal year 2024 acquisitions and a positive $7.7 million impact from pricing, inclusive of changes in customer and product mix, discounting, favorable tariff-related pricing actions and other items. Of the $8.2 million decrease in net sales during the thirteen-week period ended May 31, 2025, sales to our national account customers decreased $6.2 million, sales to our core and other customers decreased $4.0 million and sales to our public sector customers increased $2.0 million.
Current wording
Net sales increased 4.0%, or $37.2 million, to $965.7 million for the thirteen-week period ended November 29, 2025, as compared to $928.5 million for the same period in the prior fiscal year. The $37.2 million increase in net sales was comprised of a positive impact from pricing of $39.0 million and favorable foreign exchange impact of $1.0 million, partially offset by $2.8 million of lower sales volume, which was primarily driven by the federal government shutdown. The positive pricing impact was inclusive of changes in customer and product mix, discounting, favorable tariff-related pricing actions and other items. Of the $37.2 million increase in net sales during the thirteen-week period ended November 29, 2025, sales to our core and other customers increased $31.9 million, sales to our national account customers increased $9.8 million and sales to our public sector customers decreased $4.5 million.
Previous wording
We believe that our ability to transact business with our customers directly through the MSC website as well as through various other electronic portals gives us a competitive advantage over smaller suppliers. Sales made through our E-commerce platforms, including sales made through Electronic Data Interchange (“EDI”) systems, VMI systems, Extensible Markup Language ordering-based systems, vending, hosted systems and other electronic portals, represented 63.7% of consolidated net sales for the thirteen-week period ended May 31, 2025, as compared to 63.3% of consolidated net sales for the same period in the prior fiscal year.
Current wording
We believe that our ability to transact business with our customers directly through the MSC website as well as through various other electronic portals gives us a competitive advantage over smaller suppliers. Sales made through our E-commerce platforms, including sales made through Electronic Data Interchange (“EDI”) systems, VMI systems, Extensible Markup Language ordering-based systems, vending, hosted systems and other electronic portals, represented 64.2% of consolidated net sales for the thirteen-week period ended November 29, 2025, as compared to 63.7% of consolidated net sales for the same period in the prior fiscal year.
Previous wording
Gross profit of $397.7 million for the thirteen-week period ended May 31, 2025 decreased $2.7 million, or 0.7%, compared to the same period in the prior fiscal year. Gross profit margin was 41.0% for the thirteen-week period ended May 31, 2025, as compared to 40.9% for the same period in the prior fiscal year. The decrease in gross profit was primarily a result of lower sales volume, as described above. The increase in gross profit margin was primarily a result of favorable pricing actions as a resu lt of tariff-driven product cost inflation concerns, which also offset lower gross profit margins from recent acquisitions.
Current wording
Gross profit of $392.7 million for the thirteen-week period ended November 29, 2025 increased $14.5 million, or 3.8%, compared to the same period in the prior fiscal year. Gross profit margin was 40.7% for the thirteen-week period ended November 29, 2025, which was flat to the same period in the prior fiscal year. The increase in gross profit was primarily a result of an increase in net sales, as described above, while gross profit margin remained comparable to the prior year period.
Previous wording
Payroll and payroll-related costs for the thirteen-week period ended May 31, 2025 were 56.1% of total Operating expenses, as compared to 55.4% for the same period in the prior fiscal year. Payroll and payroll-related costs, which include salary, incentive compensation, sales commission and fringe benefit costs, increased $15.1 million for the thirteen-week period ended May 31, 2025. The majority of this increase compared to the same period in the prior fiscal year was due to higher incentive compensation, as well as higher salary expenses from our annual merit increases.
Current wording
Payroll and payroll-related costs, which include salary, incentive compensation, sales commission and fringe benefit costs, were $174.5 million, or 56.0% of total Operating expenses, for the thirteen-week period ended November 29, 2025, as compared to $173.7 million, or 57.2% of total Operating expenses, for the same period in the prior fiscal year.
Previous wording
Freight expense was $40.9 million for the thirteen-week period ended May 31, 2025, as compared to $37.4 million for the same period in the prior fiscal year. The primary driver of the increase was higher shipping rates incurred while servicing certain customers in the public sector.
Current wording
Freight expense was $36.4 million for the thirteen-week period ended November 29, 2025, as compared to $37.5 million for the same period in the prior fiscal year. The primary driver of the decrease was favorable third-party shipping rates achieved through our network optimization initiatives.
Previous wording
Freight expense was $114.1 million for the thirty-nine-week period ended May 31, 2025, as compared to $111.3 million for the same period in the prior fiscal year. The primary driver of the increase was higher shipping rates incurred while servicing certain customers in the public sector.
Current wording
Advertising expense was $14.2 million for the thirteen-week period ended November 29, 2025, as compared to $10.9 million for the same period in the prior fiscal year. The primary driver of the increase was higher search engine marketing spend as part of the Company's enhanced marketing efforts which began in fiscal year 2025.
Previous wording
We incurred $6.4 million in Restructuring and other costs for the thirty-nine-week period ended May 31, 2025, as compared to $11.8 million for the same period in the prior fiscal year. The decrease was primarily due to a decrease in associate severance and separation costs. See Note 11, “Restructuring and Other Costs” in the Notes to Condensed Consolidated Financial Statements for additional information.
Current wording
We incurred $4.9 million in Restructuring and other costs for the thirteen-week period ended November 29, 2025, as compared to $2.3 million for the same period in the prior fiscal year. The increase was primarily related to higher severance and separation benefits related to headcount reduction actions during the period. See Note 10, “Restructuring and Other Costs” in the Notes to Condensed Consolidated Financial Statements for additional information.
Previous wording
Income from operations decreased 22.5%, or $24.0 million, to $82.7 million for the thirteen-week period ended May 31, 2025, as compared to $106.8 million for the same period in the prior fiscal year. Income from operations as a percentage of net sales decreased to 8.5% for the thirteen-week period ended May 31, 2025, as compared to 10.9% for the same period in the prior fiscal year. The decrease in income from operations as a percentage of net sales was primarily attributable to, as described above, an increase in Operating expenses as a percentage of net sales during the thirteen-week period ended May 31, 2025.
Current wording
Income from operations increased 5.5%, or $4.0 million, to $76.2 million for the thirteen-week period ended November 29, 2025, as compared to $72.3 million for the same period in the prior fiscal year. Income from operations as a percentage of net sales increased to 7.9% for the thirteen-week period ended November 29, 2025, as compared to 7.8% for the same period in the prior fiscal year. The increase in income from operations as a percentage of net sales was primarily attributable to, as described above, a decrease in Operating expenses as a percentage of net sales during the thirteen-week period ended November 29, 2025.
Previous wording
Total other expense decreased 33.3%, or $3.8 million, to $7.6 million for the thirteen-week period ended May 31, 2025, as compared to $11.4 million for the same period in the prior fiscal year. The decrease was primarily due to lower interest costs on our Credit Facilities, lower fees incurred associated with the Receivables Purchase Agreement entered into during fiscal year 2023 and the impact of realized and unrealized gains on foreign exchange.
Current wording
Total other expense decreased 25.3%, or $3.0 million, to $8.7 million for the thirteen-week period ended November 29, 2025, as compared to $11.7 million for the same period in the prior fiscal year. The decrease was primarily due to the impact of prior year realized and unrealized losses on foreign exchange as well as lower interest costs on our Credit Facilities and lower fees incurred associated with the Receivables Purchase Agreement.
Previous wording
The Company’s effective tax rate for the thirty-nine-week period ended May 31, 2025 was 24.4%, as compared to 24.2% for the same period in the prior fiscal year.
Current wording
The Company’s effective tax rate for the thirteen-week period ended November 29, 2025 was 24.3%, as compared to 24.6% for the same period in the prior fiscal year.
Previous wording
As of May 31, 2025, we had $71.7 million in cash and cash equivalents, substantially all with well-known financial institutions. Historically, our primary financing needs have been to fund our working capital requirements necessitated by our sales growth and the costs of acquisitions, new products, new facilities, facility expansions, investments in vending solutions, technology investments, and productivity investments. Cash generated from operations, together with borrowings under our credit facilities and net proceeds from the private placement notes, have been used to fund these needs, to repurchase shares of Class A Common Stock from time to time, and to pay dividends to our shareholders.
Current wording
As of November 29, 2025, we had $40.3 million in cash and cash equivalents, substantially all with well-known financial institutions. Historically, our primary financing needs have been to fund our working capital requirements necessitated by our sales growth and the costs of acquisitions, new products, new facilities, facility expansions, investments in vending solutions, technology investments, and productivity investments. Cash generated from operations, together with borrowings under our credit facilities and net proceeds from the private placement notes, have been used to fund these needs, to repurchase shares of Class A Common Stock from time to time, and to pay dividends to our shareholders.
Previous wording
As of May 31, 2025, total borrowings outstanding, representing amounts due under our credit facilities and notes, as well as all finance leases and financing arrangements, were $521.0 million, net of unamortized debt issuance costs of $0.5 million, as compared to total borrowings outstanding of $508.8 million, net of unamortized debt issuance costs of $0.8 million, as of the end of fiscal year 2024. The increase in total borrowings outstanding was driven by higher net borrowings under our credit facilities. See Note 9, “Debt” in the Notes to Condensed Consolidated Financial Statements for more information about these balances.
Current wording
As of November 29, 2025, total borrowings outstanding, representing amounts due under our credit facilities and notes, as well as all finance leases and financing arrangements, were $531.0 million, net of unamortized debt issuance costs of $1.5 million, as compared to total borrowings outstanding of $485.7 million, net of unamortized debt issuance costs of $1.5 million, as of the end of fiscal year 2025. The increase in total borrowings outstanding was driven by higher net borrowings under our credit facilities. See Note 8, “Debt” in the Notes to Condensed Consolidated Financial Statements for more information about these balances.
Previous wording
Net cash provided by operating activities was $253.5 million for the thirty-nine weeks ended May 31, 2025, compared to $303.4 million for the thirty-nine weeks ended June 1, 2024. The decrease was primarily due to the following:
Current wording
Net cash provided by operating activities was $29.4 million for the thirteen weeks ended November 29, 2025, compared to $101.9 million for the thirteen weeks ended November 30, 2024. The decrease was primarily due to the following:
Previous wording
•an increase in the change in accounts payable and accrued liabilities as compared to the prior year period primarily due to higher inventory purchases in the current year and an increase in payroll and payroll related accruals
Current wording
•a decrease in accounts payable and accrued liabilities as compared to the prior year period due primarily to the change in accrued payroll and payroll related costs due in turn to the larger fiscal year 2025 annual incentive compensation payment paid in fiscal year 2026 than prior years; partially offset by
Previous wording
Working capital remained comparable as of May 31, 2025 compared to August 31, 2024 but declined from June 1, 2024, while the current ratio as of May 31, 2025 declined compared to both August 31, 2024 and June 1, 2024. The decrease in working capital compared to June 1, 2024 and in current ratio compared to both prior-year periods was primarily due to higher Accrued expenses and other current liabilities and Current portion of debt including obligations under finance leases and a lower Inventories balance, partially offset by a higher balance in Cash and cash equivalents.
Current wording
Working capital and current ratio decreased as of November 29, 2025 compared to November 30, 2024 primarily due to higher Current portion of debt including obligations under finance leases partially offset by higher Inventories and Accounts receivable balances. Working capital increased as of November 29, 2025 compared to August 30, 2025 primarily due to higher Inventories and higher Prepaid expenses and other current assets, partially offset by a lower balance in Cash and cash equivalents.
Previous wording
Inventory turnover as of May 31, 2025 increased compared to both August 31, 2024 and June 1, 2024. Inventory turnover continues to improve due to lower purchase volumes, category management efforts and supply chain efficiencies to optimize inventory levels.
Current wording
Inventory turnover as of November 29, 2025 increased compared to both August 30, 2025 and November 30, 2024. Inventory turnover continues to improve due to category management efforts and supply chain efficiencies to optimize inventory levels.
Previous wording
Net cash used in investing activities for the thirty-nine weeks ended May 31, 2025 and June 1, 2024 was $41.6 million and $83.2 million, respectively. The use of cash for the thirty-nine weeks ended May 31, 2025 was primarily due to expenditures for property, plant and equipment mainly related to vending programs and other infrastructure and technology investments, partially offset by the net proceeds received from the sale of the Columbus CFC. The use of cash for the thirty-nine weeks ended June 1, 2024 included expenditures for property, plant and equipment and also included cash outflows due to the acquisitions of KAR Industrial Inc. and Schmitz Manufacturing Research & Technology LLC.
Current wording
Net cash used in investing activities for the thirteen weeks ended November 29, 2025 and November 30, 2024 was $21.2 million and $20.4 million, respectively. The use of cash for both the thirteen weeks ended November 29, 2025 and November 30, 2024 was primarily due to expenditures for property, plant and equipment mainly related to vending programs and other infrastructure and technology investments.
Previous wording
Net cash used in financing activities was $169.6 million for the thirty-nine-weeks ended May 31, 2025, compared to $244.5 million for the thirty-nine weeks ended June 1, 2024, primarily due to the following:
Current wording
Net cash used in financing activities was $23.9 million for the thirteen weeks ended November 29, 2025, compared to $53.4 million for the thirteen weeks ended November 30, 2024, primarily due to the following:
Previous wording
•$39.1 million in aggregate repurchases of Class A Common Stock during the thirty-nine weeks ended May 31, 2025, compared to $167.2 million in aggregate repurchases of Class A Common Stock during the thirty-nine weeks ended June 1, 2024;
Current wording
•$13.0 million in aggregate repurchases of Class A Common Stock during the thirteen weeks ended November 29, 2025, compared to $18.1 million in aggregate repurchases of Class A Common Stock during the thirteen weeks ended November 30, 2024;
Previous wording
•$142.3 million of regular cash dividends paid during the thirty-nine weeks ended May 31, 2025, compared to $140.7 million of regular cash dividends paid during the thirty-nine weeks ended June 1, 2024; and
Current wording
•$48.6 million of regular cash dividends paid during the thirteen weeks ended November 29, 2025, compared to $47.5 million of regular cash dividends paid during the thirteen weeks ended November 30, 2024;
Previous wording
•net borrowings of $12.5 million under our credit facilities and private placement debt during the thirty-nine weeks ended May 31, 2025, compared to net borrowings of $50.0 million during the thirty-nine weeks ended June 1, 2024.
Current wording
•net borrowings of $45.0 million under our credit facilities and private placement debt during the thirteen weeks ended November 29, 2025, compared to net borrowings of $11.8 million during the thirteen weeks ended November 30, 2024; and
Previous wording
In April 2017, the Company entered into a $600.0 million revolving credit facility, which was subsequently amended and extended in August 2021. Subsequent to the fiscal quarter ended May 31, 2025, the Company has not made any additional payments or borrowings through June 17, 2025 on its revolving credit facility. The current unused balance of $513.7 million from the revolving credit facility, which is reduced by outstanding letters of credit, is available for working capital purposes if necessary. As of May 31, 2025, the Company also had three uncommitted credit facilities, totaling $230.0 million in aggregate maximum uncommitted availability. As of May 31, 2025, we were in compliance with the operating and financial covenants of our credit facilities. See Note 9, “Debt” in the Notes to Condensed Consolidated Financial Statements for more information about these balances.
Current wording
In April 2017, the Company entered into a $600.0 million revolving credit facility, which was subsequently amended. Subsequent to the fiscal quarter ended November 29, 2025, the Company made additional net payments through December 19, 2025 of $38.0 million on its revolving credit facility which were funded through the $50.0 million proceeds received in relation to the amendment to our Receivables Purchase Agreement entered into during the second quarter of fiscal year 2026. See Note 6, "Accounts Receivable" in the Notes to Condensed Consolidated Financial Statements for more information about the amendment. The current unused balance of $521.7 million from the revolving credit facility, which is reduced by outstanding letters of credit, is available for working capital purposes if necessary. As of November 29, 2025, the Company also had three uncommitted credit facilities, totaling $230.0 million in aggregate maximum uncommitted availability. As of November 29, 2025, we were in compliance with the operating and financial covenants of our credit facilities. See Note 8, “Debt” in the Notes to Condensed Consolidated Financial Statements for more information about these balances.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
The table below summarizes the Company’s results of operations both in dollars (in thousands) and as a percentage of net sales for the periods indicated:
Previous report — wording carried elsewhere
The table below shows, among other things, the change in our ADS by total Company, by customer end-market and by customer type for the thirty-nine-week periods ended May 31, 2025 and June 1, 2024, each as compared to the same period in the prior fiscal year:
Previous report — wording carried elsewhere
(1)ADS is calculated using the number of business days in the United States for the periods indicated. The Company believes ADS is a key performance indicator because it shows the effectiveness of the Company’s selling performance on a consistent basis between periods.
Previous report — wording carried elsewhere
(2)Percent reflects the change from the 2024 fiscal period to the 2025 fiscal period and the change from the 2023 fiscal period to the 2024 fiscal period, respectively.
Previous report — wording carried elsewhere
We believe that our ability to transact business with our customers directly through the MSC website as well as through various other electronic portals gives us a competitive advantage over smaller suppliers. Sales made through our E-commerce platforms, including sales made through EDI systems, VMI systems, Extensible Markup Language ordering-based systems, vending, hosted systems and other electronic portals, represented 63.7% of consolidated net sales for the thirty-nine-week period ended May 31, 2025, as compared to 63.2% of consolidated net sales for the same period in the prior fiscal year.
Previous report — wording carried elsewhere
The factors which affected net income for the thirty-nine-week period ended May 31, 2025, as compared to the same period in the prior fiscal year, have been discussed above.