MSM Filings — Msc Industrial Direct Co., Inc. - FilingSpy
MSM
Msc Industrial Direct Co., Inc.
A distributor of metalworking and maintenance, repair, and operations (MRO) supplies—cutting tools, safety gear, and similar goods—serving machine shops, factories, and facilities across North America through e-commerce, inventory management, and its iconic "Big Book" catalog. Founder Sid Jacobson started the business in 1941 as Sid Tool Company, selling cutting tools to New York City machine shops from his car using money borrowed from his mother. The MSC name came from a 1970 merger with the Manhattan Supply Company.
Q3 FY2026 operating income rose 29.0% to $106.7M as pricing lifted revenue 7.8% to $1,047.1M.
Quarterly profit rebounded to its highest in a year. rose 7.8% to $1,047.1M and rose 41.2% to $1.44 as pricing actions lifted to 41.1% and grew slower than sales. The company returned to the margin profile it held before the FY2025 soft patch.
Key takeaways
rose 29.0% to $106.7M and expanded 1.7 points to 10.2%, aided by sales and expense control as grew only 3.6% to $323.7M.
rose 7.8% to $1,047.1M, with $70.1M from pricing, $4.5M from volume, and $1.3M from ; core and other customer sales grew $42.7M.
improved 10 to 41.1%, primarily due to favorable pricing actions, while rose 8.2% to $430.4M.
Section summaries
Management's Discussion and Analysis
Q3 FY2026 net sales rose 7.8% to $1,047.1M driven by pricing, with gross margin up 10 bps to 41.1% and operating margin expanding to 10.2%.
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increased 7.8% to $1,047.1M, with $70.1M from pricing, $4.5M from volume, and $1.3M from FX; core and other customer sales grew $42.7M.
rose 8.2% to $430.4M and improved 10 to 41.1%, primarily due to favorable pricing actions.
Total other expense dropped 67.2% to $2.5M, mainly from $5.1M in claims, and attributable to MSC rose 41.4% to $80.4M.
rose 14.1% from Q2 FY2026's $917.8M, and rose 64.8% sequentially as the quarter reversed the sub-$1B revenue and single-digit of the prior three quarters.
What changed
Q3 FY2026 held at 41.1% versus the 41.0% flagged to watch for Q3 FY2025; tariff-driven pricing kept it flat-to-up rather than deepening.
for the 39-week period was $225.5M, down from $253.5M a year earlier, so the Q2 flag on build from tariff countermeasures did not normalize — it continued.
was not stated this quarter but fell to $89.6M from $194.5M at Q1 end, continuing the downward path after the $485.2M total debt at FY2025 year-end.
Macomb Litigation progressed: motion to dismiss denied November 14, 2025 and appeal filed February 20, 2026; cost remains not reasonably estimable, unchanged from the FY2025 flag.
Restructuring costs were not disclosed this quarter, leaving the Q2 figure of $2.5M as the last reported in the flagged trajectory.
What to watch
Q4 FY2026 to see if 41.1% holds as tariff-driven cost pressure and public sector mix persist.
path after fell to $89.6M, with total debt and borrowings for dividends and repurchases to be disclosed next quarter.
in Q4 to see if the 39-week $225.5M build from tariffs reverses.
Macomb Litigation appeal outcome and any estimable cost after the February 20, 2026 filing.
Operating expenses grew only 3.6% to $323.7M, falling to 30.9% of sales from 32.2%, driven by lower freight and payroll costs despite higher and credit loss provisions.
surged 29.0% to $106.7M, with expanding 170 to 10.2%, aided by sales and expense control.
Total other expense dropped 67.2% to $2.5M, mainly from $5.1M in Employee Retention Credit claims; attributable to MSC rose 41.4% to $80.4M.
was $225.5M for the 39-week period, down from $253.5M due to higher build for tariffs and sales growth, partially offset by lower from the RPA amendment.
Quantitative and Qualitative Disclosures About Market Risk
For information regarding our exposure to certain market risks, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Interest Rate Risks” under Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of Part II of…
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For information regarding our exposure to certain market risks, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Interest Rate Risks” under Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of Part II of our Annual Report on Form 10-K for the fiscal year ended
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August 30, 2025. Except as described in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this Report, there have been no significant changes in our financial instrument portfolio or interest rate risk since our August 30, 2025 fiscal year-end.
The Company faces ordinary-course claims and a specific class/derivative suit (Macomb Litigation) alleging fiduciary breaches related to a Reclassification, with no material adverse effect expected.
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Routine claims and lawsuits incidental to operations are evaluated, and a liability is recorded when a loss is probable and estimable.
The Company does not expect these ordinary-course matters to materially affect its financial position, results, or liquidity.
On March 14, 2025, Macomb County Retiree Health Care Fund filed a complaint against the Company and certain officers, directors, and shareholders.
The Macomb Litigation, amended in June 2025, alleges breaches of fiduciary duties related to a Reclassification and includes a breach of contract claim.
The Company's motion to dismiss was denied on November 14, 2025, and an appeal was filed on February 20, 2026.
The Company cannot reasonably estimate the ultimate cost or range of costs for the Macomb Litigation, though legal fees are being incurred.
In addition to the other information set forth in this Report, you should carefully consider the risks and the uncertainties discussed in Item 1A, “Risk Factors” of Part I of our Annual Report on Form 10-K for the fiscal year ended August 30, 2025, which could materially affect…
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In addition to the other information set forth in this Report, you should carefully consider the risks and the uncertainties discussed in Item 1A, “Risk Factors” of Part I of our Annual Report on Form 10-K for the fiscal year ended August 30, 2025, which could materially affect our business, financial condition and/or operating results. There have been no material changes in the Company’s risk factors from those disclosed in our Annual Report on Form 10-K. The risks described in our Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be not material also may materially and adversely affect our business, financial condition and/or operating results.