MSC INDUSTRIAL DIRECT CO INC
For the period ended May 30, 2026. Filed Jul 1, 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.
May 30, 2026 · Filed Jul 1, 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 2026-02-28; filed 2026-04-01.
0001003078-26-000061
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-05-30; filed 2026-07-01.
0001003078-26-000080
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 118 previous paragraphs and 119 current paragraphs.
59 unchanged; 51 reworded; 7 added; 7 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 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
International Emergency Economic Powers Act (“IEEPA”) Tariff Refunds
Current report
On February 20, 2026, the United States Supreme Court issued a ruling invalidating certain tariffs originally mandated under IEEPA. As a result, the United States Court of International Trade ordered the United States Customs and Border Patrol to process refunds for tariffs collected under IEEPA. As a distributor, we are not the importer of record for most products we sell. However, during the thirteen-week period ended May 30, 2026, we formally submitted refund claims for tariffs which had previously been paid by the Company as the importer of record and are now disallowed under the United States Supreme Court ruling. As of May 30, 2026, cash refunds received were not significant. The ultimate availability, timing and amount of potential refunds remains uncertain and subject to regulatory, legal and administrative developments. As of May 30, 2026, we have not recorded a receivable related to such tariff refunds due to the aforementioned uncertainty, however we may recognize additional benefits in future periods.
Current report
Following the Supreme Court’s ruling on IEEPA tariffs, the United States Executive Branch introduced tariffs under a different statutory authority. There remains significant uncertainty regarding the scope and duration of current and potential tariffs. The Company continues to monitor and evaluate these developments and assess their potential impact on the Company’s business, financial condition and results of operations.
Current report
Depreciation and amortization was $24.9 million for the thirteen-week period ended May 30, 2026, as compared to $22.3 million for the same period in the prior fiscal year. The increase was primarily driven by capital expenditures to support the Company’s strategic growth initiatives and expanded solutions footprint.
Current report
Total other expense decreased 67.2%, or $5.1 million, to $2.5 million for the thirteen-week period ended May 30, 2026, as compared to $7.6 million for the same period in the prior fiscal year. The decrease was primarily due to the recognition of $5.1 million of Employee Retention Credit (“ERC”) claims.
Current report
Thirty-Nine-Week Period Ended May 30, 2026 Compared to the Thirty-Nine-Week Period Ended May 31, 2025
Current report
Depreciation and amortization was $74.4 million for the thirty-nine-week period ended May 30, 2026, as compared to $66.0 million for the same period in the prior fiscal year. The increase was primarily driven by capital expenditures to support our strategic growth initiatives and expanded solutions footprint.
Removed paragraphs (7)
Previous report
(3)Prior year data includes the effect of a reclassification of end-markets, primarily between Manufacturing Heavy/Light and Other.
Previous report
Depreciation and amortization was $24.8 million for the thirteen-week period ended February 28, 2026, as compared to $22.5 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.
Previous report
Twenty-Six-Week Period Ended February 28, 2026 Compared to the Twenty-Six-Week Period Ended March 1, 2025
Previous report
Depreciation and amortization was $49.4 million for the twenty-six-week period ended February 28, 2026, as compared to $43.7 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.
Previous report
Restructuring and Other Costs
Previous report
Total other expense decreased 21.2%, or $4.7 million, to $17.5 million for the twenty-six-week period ended February 28, 2026, as compared to $22.2 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 and remeasurement gains from foreign exchange compared to foreign exchange losses in the prior year.
Previous report
•an increase in the change of prepaid expenses and other current assets in the current fiscal year due primarily to an increase in vendor rebate receivables and IT-related prepayments;
Reworded paragraphs (51)
Previous wording
MSC 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. We help our customers drive greater productivity, profitability and operational performance with industry-leading inventory management and 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.
Current wording
MSC 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. We help our customers drive greater productivity, profitability and operational performance with industry-leading inventory management and 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, eight 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 — helping reduce downtime and ensure critical products are available when and where they are needed. Our vending machines in service totaled 30,414 as of February 28, 2026, compared to 28,085 as of March 1, 2025, and our In-Plant programs totaled 423 locations as of February 28, 2026, compared to 387 as of March 1, 2025. 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 2,473 as of February 28, 2026, compared to 2,726 as of March 1, 2025.
Current wording
Our business model focuses on providing overall procurement cost reduction and just-in-time delivery to meet our customers’ 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 30,790 as of May 30, 2026, compared to 28,741 as of May 31, 2025, and our In-Plant programs totaled 426 locations as of May 30, 2026, compared to 399 as of May 31, 2025. 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 2,496 as of May 30, 2026, compared to 2,721 as of May 31, 2025.
Previous wording
Highlights during the twenty-six weeks ended February 28, 2026 include:
Current wording
Highlights during the thirty-nine weeks ended May 30, 2026 include:
Previous wording
•We generated $123.8 million of cash from operations, compared to $156.3 million for the same period in the prior fiscal year.
Current wording
•We generated $225.5 million of cash from operations, compared to $253.5 million for the same period in the prior fiscal year.
Previous wording
•We had net borrowings of $25.0 million on our credit facilities, compared to net borrowings of $30.3 million for the same period in the prior fiscal year.
Current wording
•We had net borrowings of $20.0 million on our credit facilities, compared to net borrowings of $12.5 million for the same period in the prior fiscal year.
Previous wording
•We paid out an aggregate $97.2 million in regular cash dividends, compared to an aggregate $94.9 million in regular cash dividends for the same period in the prior fiscal year.
Current wording
•We paid out an aggregate $145.8 million in regular cash dividends, compared to an aggregate $142.3 million in regular cash dividends for the same period in the prior fiscal year.
Previous wording
•We repurchased 160 thousand shares of MSC’s Class A Common Stock, par value $0.001 per share (“Class A Common Stock”) for $13.7 million, excluding excise taxes, compared to 377 thousand shares repurchased for $30.5 million, excluding excise taxes, for the same period in the prior fiscal year.
Current wording
•We repurchased 162 thousand shares of MSC’s Class A Common Stock, par value $0.001 per share (“Class A Common Stock”) for $13.9 million, excluding excise taxes, compared to 494 thousand shares repurchased for $39.1 million, excluding excise taxes, for the same period in the prior fiscal year.
Previous wording
•We incurred $7.3 million in Restructuring and other costs, compared to $3.8 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 wording
•We incurred $7.3 million in Restructuring and other costs, compared to $6.4 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 fis xcal 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 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 during the first half of fiscal year 2026.
Current wording
(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. During fiscal year 2026, alongside its sales optimization initiative, the Company is focused on enhancing end‑to‑end customer interactions through data‑driven insights and organizational alignment to deliver a more personalized and seamless customer experience.
Previous wording
The United States economy has experienced various macroeconomic pressures in recent years including pricing pressure from tariffs and inflation, sustained high interest rates, increased fuel costs 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 fiscal year 2026. Furthermore, as a supplier to the United States federal government, the federal government shutdown during the Company’s fiscal first quarter and the partial federal government shut downs during the Company’s fiscal second quarter negatively impacted sales to our public sector end-market. Additionally, increased fuel costs resulting from the conflict in Iran and geopolitical tensions in the region has increased macroeconomic uncertainty generally and may lead to higher freight expense and cost pressure on the products offered by the Company. These 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, increased fuel costs 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 fiscal year 2026. Furthermore, as a supplier to the United States federal government, the federal government shutdown during the Company’s fiscal first quarter and the partial federal government shut downs during the Company’s fiscal second quarter negatively impacted sales to our public sector end-market. Additionally, increased fuel costs resulting from the conflict within Iran and geopolitical tensions in the region has increased macroeconomic uncertainty generally and may lead to higher freight expense and cost pressure on the products offered by the Company. 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 both the thirteen- and twenty-six-week periods ended February 28, 2026. 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 February 2026 and the average for the three- and 12-month periods ended February 2026 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 both the thirteen- and thirty-nine-week periods ended May 30, 2026. After giving effect to the annual technical revisions to calculations of the IP Index which occurred in November 2025, the
Previous wording
The average IP Index for the three months ended February 2026 was 102.2, an increase compared to the prior quarter average of 101.7 and an increase from an average of 100.5 during the comparative quarter in the prior year.
Current wording
The average IP Index for the three months ended May 2026 was 102.3, an increase compared to the prior quarter average of 102.2 and an increase from an average of 101.0 during the comparative quarter in the prior year.
Previous wording
During fiscal year 2026, the Company has experienced a more constructive 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 February 28, 2026, showed signs of expansion. Several IP subindexes, including Aerospace, Machinery and Equipment, Primary Metals and Fabricated Metals improved. Non-manufacturing demand, in particular the Company’s public sector end-market, recovered from lower sales levels in the first fiscal quarter as a result of the federal government shutdown but such recovery was partially offset by the partial federal government shutdowns during January and February and continuing into our third fiscal quarter. 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 fiscal year 2026, the Company has experienced a more constructive 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 May 30, 2026, showed signs of expansion. Several IP subindexes, including Aerospace, Machinery and Equipment, Primary Metals and Fabricated Metals improved. Non-manufacturing demand, in particular the Company’s public sector end-market, recovered from lower sales as a result of the federal government shutdowns earlier in fiscal year 2026. 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 increased 2.9%, or $26.1 million, to $917.8 million for the thirteen-week period ended February 28, 2026, as compared to $891.7 million for the same period in the prior fiscal year. The $26.1 million increase in net sales was comprised of a positive impact from pricing of $58.8 million and favorable foreign exchange impact of $2.9 million, partially offset by $35.6 million of lower sales volume. The positive pricing impact was inclusive of changes in customer and product mix, discounting, favorable tariff-related pricing actions and other items. Of the $26.1 million increase in net sales during the thirteen-week period ended February 28, 2026, sales to our core and other customers increased $26.5 million, sales to our national account customers increased $0.6 million and sales to our public sector customers decreased $1.0 million.
Current wording
Net sales increased 7.8%, or $75.9 million, to $1,047.1 million for the thirteen-week period ended May 30, 2026, as compared to $971.1 million for the same period in the prior fiscal year. The $75.9 million increase in net sales was comprised of a positive impact from pricing of $70.1 million, $4.5 million of higher sales volume, and favorable foreign exchange impact of $1.3 million. The positive pricing impact was inclusive of changes in customer and product mix, discounting, favorable pricing actions and other items. Of the $75.9 million increase in net sales during the thirteen-week period ended May 30, 2026, sales to our core and other customers increased $42.7 million, sales to our national account customers increased $25.6 million and sales to our public sector customers increased $7.6 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 64.1% of consolidated net sales for the thirteen-week period ended February 28, 2026, as compared to 63.6% 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 63.7% of consolidated net sales in both the thirteen-week period ended May 30, 2026 and the same period in the prior fiscal year.
Previous wording
Gross profit increased 3.4%, or $12.4 million, to $377.6 million for the thirteen-week period ended February 28, 2026, compared to $365.2 million for the same period in the prior fiscal year. Gross profit margin was 41.1% for the thirteen-week period ended February 28, 2026, as compared to 41.0% for 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 the increase in gross profit margin was primarily a result of favorable pricing actions as a result of tariff-driven product cost inflation concerns.
Current wording
Gross profit increased 8.2%, or $32.7 million, to $430.4 million for the thirteen-week period ended May 30, 2026, compared to $397.7 million for the same period in the prior fiscal year. Gross profit margin was 41.1% for the thirteen-week period ended May 30, 2026, as compared to 41.0% for 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 the increase in gross profit margin was primarily a result of favorable pricing actions.
Previous wording
Operating expenses increased 2.9%, or $8.8 million, to $310.3 million for the thirteen-week period ended February 28, 2026, as compared to $301.6 million for the same period in the prior fiscal year. Operating expenses were 33.8% of net sales for both the thirteen-week periods ended February 28, 2026 and March 1, 2025. The largest contribution to the increase in Operating expenses was higher depreciation and amortization expense.
Current wording
Operating expenses increased 3.6%, or $11.3 million, to $323.7 million for the thirteen-week period ended May 30, 2026, as compared to $312.3 million for the same period in the prior fiscal year. Operating expenses were 30.9% of net sales for the thirteen-week period ended May 30, 2026, as compared to 32.2% for the same period in the prior fiscal year. The largest contributions to the increase in Operating expenses were higher depreciation and amortization expense, provision for credit losses and stock-based compensation expense.
Previous wording
Payroll and payroll-related costs, which include salary, incentive compensation, sales commission and fringe benefit costs, were $171.2 million, or 55.2% of total Operating expenses, for the thirteen-week period ended February 28, 2026, as compared to $173.3 million, or 57.5% of total Operating expenses, for the same period in the prior fiscal year. The headcount reduction actions during fiscal year 2026 resulted in lower salary, sales commissions and incentive compensation costs, which was partially offset by our annual merit increase.
Current wording
Payroll and payroll-related costs, which include salary, incentive compensation, sales commission and fringe benefit costs, were $173.8 million, or 53.7% of total Operating expenses, for the thirteen-week period ended May 30, 2026, as compared to $175.3 million, or 56.1% of total Operating expenses, for the same period in the prior fiscal year. The headcount reduction actions during fiscal year 2026 resulted in lower salary and sales commission costs, which were partially offset by our annual merit increase and larger incentive compensation accruals.
Previous wording
Freight expense was $35.0 million for the thirteen-week period ended February 28, 2026, as compared to $35.8 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.
Current wording
Freight expense was $37.7 million for the thirteen-week period ended May 30, 2026, as compared to $40.9 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 and higher freight costs in the prior year incurred while servicing certain customers in the public sector.
Previous wording
Income from operations increased 4.8%, or $6.5 million, to $141.0 million for the twenty-six-week period ended February 28, 2026, as compared to $134.5 million for the same period in the prior fiscal year. Income from operations as a percentage of net sales increased to 7.5% for the twenty-six-week period ended February 28, 2026, as compared to 7.4% 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, an increase in gross profit margin and a decrease in Operating expenses as a percentage of net sales.
Current wording
Income from operations increased 29.0%, or $24.0 million, to $106.7 million for the thirteen-week period ended May 30, 2026, as compared to $82.7 million for the same period in the prior fiscal year. Income from operations as a percentage of net sales increased to 10.2% for the thirteen-week period ended May 30, 2026, as compared to 8.5% 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, an increase in net sales along with a decrease in Operating expenses as a percentage of Net Sales.
Previous wording
The Company’s effective tax rate for the thirteen-week period ended February 28, 2026 was 24.7%, as compared to 24.3% for the same period in the prior fiscal year. The increase in the effective tax rate was primarily due to lower permanent deductions compared to the prior year.
Current wording
The Company’s effective tax rate for the thirteen-week period ended May 30, 2026 was 24.5%, as compared to 24.3% for the same period in the prior fiscal year.
Previous wording
Net sales increased 3.5%, or $63.3 million, to $1,883.5 million for the twenty-six-week period ended February 28, 2026, as compared to $1,820.2 million for the same period in the prior fiscal year. The $63.3 million increase in net sales was comprised of a positive impact from pricing of $97.8 million and favorable foreign exchange impact of $3.9 million, partially offset by $38.4 million of lower sales volume. Of the $63.3 million increase in net sales during the twenty-six-week period ended February 28, 2026, sales to our core and other customers increased$58.4 million, sales to our national account customers increased$10.4 million and sales to our public sector customers decreased$5.5 million.
Current wording
Net sales increased 5.0%, or $139.2 million, to $2,930.5 million for the thirty-nine-week period ended May 30, 2026, as compared to $2,791.3 million for the same period in the prior fiscal year. The $139.2 million increase in net sales was comprised of a positive impact from pricing of $167.9 million and favorable foreign exchange impact of $5.2 million, partially offset by $33.9 million of lower sales volume. The positive pricing impact was inclusive of changes in customer and product mix, discounting, favorable pricing actions and other items. Of the $139.2 million increase in net sales during the thirty-nine-week period ended May 30, 2026, sales to our core and other customers increased $101.1 million, sales to our national account customers increased $36.0 million and sales to our public sector customers increased $2.1 million.
Previous wording
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 twenty-six-week periods ended February 28, 2026 and March 1, 2025, each as compared to the same period in the prior fiscal year:
Current wording
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 30, 2026 and May 31, 2025, each as compared to the same period in the prior fiscal year:
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 EDI systems, VMI systems, Extensible Markup Language ordering-based systems, vending, hosted systems and other electronic portals, represented 64.1% of consolidated net sales for the twenty-six-week period ended February 28, 2026, as compared to 63.7% 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 EDI systems, VMI systems, Extensible Markup Language ordering-based systems, vending, hosted systems and other electronic portals, represented 64.0% of consolidated net sales for the thirty-nine-week period ended May 30, 2026, as compared to 63.7% of consolidated net sales for the same period in the prior fiscal year.
Previous wording
Gross profit increased 3.6%, or $26.8 million, to $770.3 million for the twenty-six-week period ended February 28, 2026, compared to $743.4 million forthe same period in the prior fiscal year. Gross profit margin was 40.9% for the twenty-six-week period ended February 28, 2026, as compared to 40.8% for the same period in the prior fiscal year. The increase in gross profit was primarily a result of higher net sales, as described above, while the increase in gross profit margin was primarily a result of favorable pricing actions as a result of tariff-driven product cost inflation concerns.
Current wording
Gross profit increased 5.2%, or $59.5 million, to $1,200.7 million for the thirty-nine-week period ended May 30, 2026, compared to $1,141.2 million forthe same period in the prior fiscal year. Gross profit margin was 41.0% for the thirty-nine-week period ended May 30, 2026, as compared to 40.9% for the same period in the prior fiscal year. The increase in gross profit was primarily a result of higher net sales, as described above, while the increase in gross profit margin was primarily a result of favorable pricing actions.
Previous wording
Operating expenses increased 2.8%, or $16.8 million, to $621.9 million for the twenty-six-week period ended February 28, 2026, as compared to $605.1 million for the same period in the prior fiscal year. Operating expenses were 33.0% of net sales for the twenty-six-week period ended February 28, 2026, as compared to 33.2% 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 wording
Operating expenses increased 3.1%, or $28.1 million, to $945.6 million for the thirty-nine-week period ended May 30, 2026, as compared to $917.5 million for the same period in the prior fiscal year. Operating expenses were 32.3% of net sales for the thirty-nine-week period ended May 30, 2026, as compared to 32.9% for the same period in the prior fiscal year. The largest contributions to the increase in Operating expenses were higher depreciation and amortization expense and higher share based compensation 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.
Previous wording
Payroll and payroll-related costs, which include salary, incentive compensation, sales commission and fringe benefit costs, were $345.7 million, or 55.6% of total Operating expenses, for the twenty-six-week period ended February 28, 2026 as compared to $347.0 million, or 57.3% of total Operating expenses, for the same period in the prior fiscal year. The headcount reduction actions during fiscal year 2026 resulted in lower salary, sales commissions and incentive compensation costs, which was partially offset by our annual merit increase.
Current wording
Payroll and payroll-related costs, which include salary, incentive compensation, sales commission and fringe benefit costs, were $519.5 million, or 55.0% of total Operating expenses, for the thirty-nine-week period ended May 30, 2026 as compared to $522.3 million, or 56.9% of total Operating expenses, for the same period in the prior fiscal year. The headcount reduction actions during fiscal year 2026 resulted in lower salary and sales commission costs, which was partially offset by our annual merit increase.
Previous wording
Freight expense was $71.4 million for the twenty-six-week period ended February 28, 2026, as compared to $73.3 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.
Current wording
Freight expense was $109.1 million for the thirty-nine-week period ended May 30, 2026, as compared to $114.1 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 and higher freight costs in the prior year incurred while servicing certain customers in the public sector.
Previous wording
Advertising expense was $26.5 million for the twenty-six-week period ended February 28, 2026, as compared to $22.8 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.
Current wording
Advertising expense was $39.9 million for the thirty-nine-week period ended May 30, 2026, as compared to $34.9 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 $7.3 million in Restructuring and other costs for the twenty-six-week period ended February 28, 2026, as compared to $3.8 million for the same period in the prior fiscal year. The increase was primarily related to higher severance and separation benefits associated with the Company’s workforce realignment actions in the current fiscal year. See Note 9, “Restructuring and Other Costs” in the Notes to Condensed Consolidated Financial Statements for additional information.
Current wording
We incurred $7.3 million in Restructuring and other costs for the thirty-nine-week period ended May 30, 2026, as compared to $6.4 million for the same period in the prior fiscal year. The increase was primarily related to higher severance and separation benefits associated with the Company’s workforce realignment actions in the current fiscal year. See Note 10, “Restructuring and Other Costs” in the Notes to Condensed Consolidated Financial Statements for additional information.
Previous wording
Income from operations increased 4.1%, or $2.5 million, to $64.8 million for the thirteen-week period ended February 28, 2026, as compared to $62.2 million for the same period in the prior fiscal year. Income from operations as a percentage of net sales increased to 7.1% for the thirteen-week period ended February 28, 2026, as compared to 7.0% 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, an increase in gross profit margin.
Current wording
Income from operations increased 14.0%, or $30.5 million, to $247.8 million for the thirty-nine-week period ended May 30, 2026, as compared to $217.3 million for the same period in the prior fiscal year. Income from operations as a percentage of net sales increased to 8.5% for the thirty-nine-week period ended May 30, 2026, 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, an increase in net sales along with a decrease in Operating expenses as a percentage of Net Sales.
Previous wording
Total other expense decreased 16.7%, or $1.8 million, to $8.8 million for the thirteen-week period ended February 28, 2026, as compared to $10.5 million for the same period in the prior fiscal year. The decrease was primarily due to lower interest costs on our Credit Facilities and remeasurement gains from foreign exchange compared to foreign exchange losses in the prior year.
Current wording
Total other expense decreased 33.0%, or $9.8 million, to $20.0 million for the thirty-nine-week period ended May 30, 2026, as compared to $29.8 million for the same period in the prior fiscal year. The decrease was primarily due to the recognition of $5.1 million of ERC funds, lower interest costs on our Credit Facilities and current year remeasurement gains from foreign exchange.
Previous wording
The Company’s effective tax rate was 24.5% for both the twenty-six-week periods ended February 28, 2026 and March 1, 2025.
Current wording
The Company’s effective tax rate was 24.5% for the thirty-nine-week period ended May 30, 2026 as compared to 24.4% for the thirty-nine-week period ended May 31, 2025.
Previous wording
The factors which affected net income for the twenty-six-week period ended February 28, 2026, as compared to the same period in the prior fiscal year, have been discussed above.
Current wording
The factors which affected net income for the thirty-nine-week period ended May 30, 2026, as compared to the same period in the prior fiscal year, have been discussed above.
Previous wording
As of February 28, 2026, we had $46.2 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 May 30, 2026, we had $74.1 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, net proceeds from the private placement notes and proceeds from the sale of receivables under our securitization program, 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 February 28, 2026, total borrowings outstanding, representing amounts due under our credit facilities and notes, as well as all finance leases and financing arrangements, were $511.8 million, net of unamortized debt issuance costs of $1.4 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 7, “Debt” in the Notes to Condensed Consolidated Financial Statements for more information about these balances.
Current wording
As of May 30, 2026, total borrowings outstanding, representing amounts due under our credit facilities and notes, as well as all finance leases and financing arrangements, were $506.8 million, net of unamortized debt issuance costs of $1.3 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
We believe, based on our current business plan, that our existing cash, financial resources and cash flow from operations will be sufficient to fund anticipated capital expenditures and operating cash requirements for at least the next 12 months. We will continue to evaluate our financial position in light of future developments and to take appropriate action as it is warranted.
Current wording
We believe, based on our current business plan, that our existing cash, financial resources and cash flow from operations will be sufficient to fund anticipated capital expenditures, debt maturities and operating cash requirements for at least the next 12 months. We will continue to evaluate our financial position in light of future developments and to take appropriate action as it is warranted.
Previous wording
Net cash provided by operating activities was $123.8 million for the twenty-six weeks ended February 28, 2026, compared to $156.3 million for the twenty-six weeks ended March 1, 2025. The decrease was primarily due to the following:
Current wording
Net cash provided by operating activities was $225.5 million for the thirty-nine weeks ended May 30, 2026, compared to $253.5 million for the thirty-nine weeks ended May 31, 2025. The decrease was primarily due to the following:
Previous wording
•an increase in the change of inventories in the current fiscal year relative to the prior year due to inventory management countermeasures in response to tariffs;
Current wording
•an increase in the change of inventories in the current fiscal year relative to the prior year due to inventory management countermeasures in response to tariffs and to support sales growth;
Previous wording
•a decrease in the change of accounts payable and accrued liabilities as compared to the prior year period due primarily to a decrease in the annual incentive compensation accrual; partially offset by
Current wording
•a decrease in the change of accounts payable and accrued liabilities as compared to the prior year period as the current year payroll and incentive compensation accrual declined compared to an increase in the prior year; partially offset by
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
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:
Current report — wording carried from elsewhere
IP Index over the three months ended May 2026 and the average for the three- and 12-month periods ended May 2026 were as follows:
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
We incurred $2.5 million in Restructuring and other costs for the thirteen-week period ended February 28, 2026, as compared to $1.4 million for the same period in the prior fiscal year. The increase was primarily related to higher severance and separation benefits associated with the Company’s workforce realignment actions in the current fiscal year. See Note 9, “Restructuring and Other Costs” in the Notes to Condensed Consolidated Financial Statements for additional information.