MSM

W.W. Grainger, Inc. GWW has reported second-quarter 2026 earnings of $12.01 per share, up 20.5% year over year. The figure beat the Zacks Consensus Estimate of $11.28 by 6.47%, aided by strong sales growth, and wider gross and operating margins.Quarterly sales increased 10.3% year over year to $5.02 billion and surpassed the consensus estimate of $4.95 billion by 1.35%. Daily sales advanced 10.3%, reflecting solid momentum across both operating segments. We predicted daily sales to increase 8.5%. On a daily, organic constant currency basis, sales increased 13.7%. The comparison adjusts for foreign currency movements and the company’s exit from the U.K. market, including the divested Cromwell business and closed Zoro U.K. operations. W.W. Grainger, Inc. price-consensus-eps-surprise-chart | W.W. Grainger, Inc. Quote The High-Touch Solutions N.A. segment’s daily sales rose 11.9% year over year in the second quarter of 2026, reflecting strong volume growth and a healthy contribution from pricing. Our model predicted year-over-year organic daily sales growth of 7.4%. The Endless Assortment segment’s daily sales grew 13.5% year over year in the quarter, supported by strong performances at MonotaRO and Zoro. Our model predicted organic daily sales growth of 12.2% for the quarter. Gross profit increased 13% year over year to $1.98 billion. The gross margin expanded 100 basis points to 39.5%, supported by improvement in both segments and benefits related to the U.K. market exit.The quarter included $43 million in refunds on IEEPA tariffs for products directly imported by Grainger. These refunds reduced the cost of goods sold and provided a roughly 90-basis-point benefit to the gross margin. The cost of sales came in at $3.04 billion, 8.5% year over year.Selling, general and administrative expenses rose 9.3% to $1.18 billion. Grainger’s operating earnings in the quarter increased 19% year over year to $807 million. The operating margin came in at 16.1% compared with 14.9% in the prior-year quarter. The company had cash and cash equivalents of $589 million as of June 30, 2026, compared with $585 million at the end of 2025. The cash flow from operating activities was $1.18 billion in the first six months of 2026 compared with $1.02 billion in the prior-year period.Long-term debt was $2.41 billion as of June 30, 2026, compared with $2.36 billion as of Dec. 31, 2025. Grainger returned $341 million to shareholders through dividends and share repurchases during the quarter. Grainger raised its 2026 net sales guidance to $19.4-$19.7 billion from $19.2-$19.6 billion. The company expects reported sales growth of 8.4-10% from the prior mentioned 6.7-9.1%.  The adjusted earnings guidance was increased to $45.50-$47.25 per share from $44.25-$46.25. Grainger also raised its operating margin outlook to 15.8-16.2% and the gross margin forecast to 39.3-39.6%. The updated outlook reflects strong first-half execution, improving MRO market demand and better top-line leverage. In the past year, GWW shares have gained 47.4% compared with the industry’s growth of 8%. Image Source: Zacks Investment Research The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. MSC Industrial Direct Company, Inc. MSM reported adjusted earnings per share of $1.43 for the third quarter of fiscal 2026, beating the Zacks Consensus Estimate of $1.28 by 11.72%. The bottom line increased 32.4% from the year-ago quarter’s adjusted earnings of $1.08 per share.MSC Industrial’s net sales were $1.05 billion, surpassing the consensus estimate of $1.03 billion by 1.74%. Sales increased 7.8% year over year, driven by stronger average daily sales, price benefits and a return to volume growth. Average daily sales increased 7.8% year over year and came in above the company’s quarterly outlook.SiteOne Landscape Supply, Inc. SITE delivered second-quarter earnings of $3.14 per share, missing the Zacks Consensus Estimate of $3.36. SITE posted earnings of $2.86 in the year-ago quarter.SiteOne Landscape posted sales of $1.53 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate of $1.54 billion. The company posted sales of $1.46 billion in the year-ago quarter. Hudson Technologies, Inc. HDSN is anticipated to release second-quarter 2026 results on Aug. 5.The Zacks Consensus Estimate for Hudson’s earnings per share is pegged at 17 cents for the second quarter, implying a decline of 26% from the year-ago reported figure. The consensus estimate for Hudson Industrial’s total sales is pinned at $73.7 million, indicating a year-over-year increase of 1.1%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report W.W. Grainger, Inc. (GWW) : Free Stock Analysis Report MSC Industrial Direct Company, Inc. (MSM) : Free Stock Analysis Report Hudson Technologies, Inc. (HDSN) : Free Stock Analysis Report SiteOne Landscape Supply, Inc. (SITE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Eaton Corporation ETN is expected to report an improvement in both top and bottom lines when it posts second-quarter 2026 results on July 31, before market open. The Zacks Consensus Estimate for ETN’s second-quarter revenues is pegged at $8 billion, indicating a 13.9% increase from the year-ago reported figure.The consensus estimate for earnings is pegged at $3.08 per share. The Zacks Consensus Estimate for ETN’s second-quarter earnings indicates growth of 0.33% in the past 60 days. Image Source: Zacks Investment Research Eaton’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and met in one, resulting in an average surprise of 0.98%. Image Source: Zacks Investment Research Our proven model predicts a likely earnings beat for Eaton this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is exactly the case here, as you can see below.You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. Eaton Corporation, PLC price-eps-surprise | Eaton Corporation, PLC Quote Earnings ESP: Eaton has an Earnings ESP of +0.32%. Zacks Rank: Eaton currently carries a Zacks Rank #2. Other stocks in the same Zacks Industrial Products sector that possess these two factors and are likely to come out with an earnings beat this season are CECO Environmental CECO, MSC Industrial MSM and W.W. Grainger GWW, with Earnings ESP of +30.23%, +2.99% and +2.50%, respectively. CECO and MSM sport a Zacks Rank #1 each and GWW currently has a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here. Eaton’s consistent investment in research and development has been helping enhance its existing product portfolio while facilitating the introduction of innovative solutions tailored to customer needs. This focus on innovation has been enabling the company to secure new orders, expand its market presence and support earnings growth. For the second quarter, Eaton expects organic revenue growth of 9-11%.Eaton’s second-quarter earnings are likely to have benefited from the acquisition of Ultra PCS, which is expected to add $60 million to its Aerospace segment’s total revenues. Boyd Thermal acquisition is expected to add $360 million to the Electric Global segment. Eaton’s diversified product portfolio has also been helping it win new orders and steadily build the backlog. The expanding backlog provides strong revenue visibility, while the growing pipeline of future business continues to support the company’s growth prospects and boosted second-quarter earnings.Eaton’s second-quarter earnings are likely to have benefited from robust demand across its Data Centers, Utilities, Commercial & Institutional and Commercial Aerospace end markets. Eaton’s stock is currently overvalued compared with its industry on a forward 12-month P/E multiple basis (P/E F12M), as shown in the chart below. ETN is currently trading at 26.27X compared with its industry average of 23.7X. Image Source: Zacks Investment Research Eaton has gained 9% in the past six months, outperforming the industry’s rally of 7.1%. Image Source: Zacks Investment Research Eaton continues to benefit from robust demand across its diverse business segments. The strong focus on innovation, supported by sustained investments in research and development, has enabled the company to continually enhance the quality and performance of its products. Courtesy of strong demand and proper cost management, Eaton expects its segment operating margin in the range of 22.6-23% in the second quarter.Effective power management is essential to the success of a broad range of projects, and Eaton has established itself as a reliable provider of these solutions. The company’s ability to meet urgent and complex customer needs further enhances its competitive position in the market.With operations spanning nearly 180 countries and a globally distributed manufacturing base, Eaton enjoys a well-diversified revenue stream. However, this broad international presence also exposes the company to geopolitical uncertainties, which could lead to potential order disruptions and operational challenges. Eaton’s rising earnings estimates, coupled with the expanding backlog, are expected to further support its overall performance. Steady demand, improving end-market conditions and a growing backlog point to a healthy pipeline of new orders.The stock remains an attractive investment, supported by a strengthening earnings outlook and solid contributions from both organic growth and strategic acquisitions.Despite Eaton's premium valuation, existing shareholders may consider retaining their positions, while prospective investors may find this high-quality stock an attractive addition ahead of its upcoming earnings release. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Eaton Corporation, PLC (ETN) : Free Stock Analysis Report W.W. Grainger, Inc. (GWW) : Free Stock Analysis Report CECO Environmental Corp. (CECO) : Free Stock Analysis Report MSC Industrial Direct Company, Inc. (MSM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Wednesday, July 1, 2026 at 8:30 a.m. ET President and Chief Executive Officer - Martina McIsaac Interim Chief Financial Officer - Gregory Clark VP of Investor Relations and Business Development - Ryan Mills Operator: Good morning, and welcome to the MSC Industrial Supply Fiscal 2026 Third Quarter Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Ryan Mills, VP of Investor Relations and Business Development. Please go ahead. Ryan Mills: Thank you, and good morning, everyone. Welcome to our fiscal 2026 third quarter earnings call. Martina McIsaac, President and Chief Executive Officer, and Greg Clark, Interim Chief Financial Officer, are on the call with me today. During today's call, we will refer to various financial data in the earnings presentation and operational statistics document, both of which can be found on our Investor Relations website. During this call, we may refer to certain adjusted financial results, which are non-GAAP measures. I will now turn the call over to Martina. Martina McIsaac: Thank you, Ryan, and good morning, everyone. On today's call, I will briefly cover our fiscal third quarter results and provide an update on the progress of our initiatives and the current demand environment. I will then turn the call over to Greg to provide greater detail on our fiscal 3Q performance and our outlook for the fiscal fourth quarter. Starting with our results on Slide 4. Average daily sales exceeded expectations with year-over-year growth of 7.8%, underpinned by continued strength in the daily sales of our core customer and noticeable improvement in national accounts. Adjusted operating margin of 10.6% also performed better than expected, resulting in an incremental operating margin of 32% in the quarter. Since becoming CEO earlier this year, I have spent a portion of my time getting to know our external stakeholders at conferences and roadshows. This has allowed me to ensure that the high-level KPIs we're using to drive urgency and performance in the business are aligned with the way our shareholders will evaluate our results and hold us accountable to progress. To summarize, we are focused on sales per rep per day and sales per total headcount, year-over-year volume improvement, adjusted operating margin expansion and adjusted incremental margin, and lastly ROIC, which will improve naturally when the KPIs I just mentioned are firing on all cylinders. We are fully committed to restoring MSC to a mid-teens operating margin, a goal which is understood and driving action across the enterprise. While we aren't hitting any home runs yet with these KPIs as of the third quarter, I am encouraged by the singles and doubles we are producing. Starting with sales per rep per day. Our sales force optimization initiative was completed in December with actions taken to streamline and professionalize our service organization, which resulted in some noise in Q2. This headwind is largely behind us, as evidenced by the improving ADS of impacted customers and the inflection seen in national accounts during the quarter. Sales per rep per day has improved high teens year-over-year, suggesting that at this point in time, we are fundamentally doing more with less. With 225 fewer heads in the field, we're targeting the right customers and meaningfully increasing customer touches through disciplined sales execution. Average daily sales to our core customer once again outperformed total company with volumes beginning to improve. A portion of this improvement is being driven by daily sales growth in the double-digit range on mscdirect.com. Post sales force transition, there is still a gap in ADS between those customers who were least impacted by our changes — who are trending at growth levels comparable to our public peers — and those who did see greater change or vacancy where relationships are still being established. Closing that gap and accelerating volume growth across all customers is now our focus. Under the leadership of Jahida Nadi, our SVP of Sales, sales excellence continues to gain traction at MSC. We've rolled out an enhanced onboarding and training process for new sellers. We've also instituted new sales management processes throughout the selling organization. Early benefits of this work resulted in improved cross-selling that helped contribute to OEM fastener growth of more than 15% in the quarter. We continue expanding our vending and in-plant footprint. The growth of our installed base is showing the benefits of an improving macro environment that should result in higher sales across existing locations — the coiled spring effect. We started to see early signs of this in the third quarter with daily sales trends on a per unit basis showing volume improvement. I'm also pleased that the company continues making strides to improve its cost structure as demonstrated by the 150 basis point reduction in adjusted operating expenses as a percent of sales in the quarter. This is being driven by our headcount actions, our new sales structure eliminating duplicative commissions, and lower freight expense despite elevated fuel costs as a result of various optimization initiatives. Acting on our productivity pipeline and optimizing our cost structure will be at the forefront of our strategic focus as we progress towards our long-term targets. Our own competitive benchmarking on sales per total headcount suggests that at today's revenues, we are relatively heavy by 1,000 heads. To close the gap to that benchmark, we will have to grow and aggressively target changes in the way we work with a focus on AI and automation. Just this month, MSC was awarded Verint's Global Customer award and accelerated insights with AI that recognizes efforts in pushing AI beyond pilots and into real-time use. We are seeing further signs of an industrial recovery taking shape with positive IP readings across most of our top manufacturing end markets and 5 consecutive months of MBI readings above 50. Average daily sales outpaced the IP Index for the fourth consecutive quarter and was above our target of 400 basis points in the fiscal third quarter. Though still primarily price-driven, I'm encouraged by the trend of volume improvement in April that has continued through June and suggests that our initiatives are beginning to take hold. I'm confident that MSC is headed in the right direction to enhance our long-term profitable growth algorithm and create meaningful value for shareholders. I will now turn the call over to Greg. Gregory Clark: Thank you, Martina, and good morning, everyone. Fiscal third quarter sales of $1.047 billion came in above our expectations and improved 7.8% year-over-year. Price was the primary driver of the improvement and contributed 720 basis points to growth, followed by volumes that contributed another 50 basis points. Sequentially, average daily sales outperformed historical averages and improved 12.3% compared to the fiscal second quarter. Looking at sales performance by customer type — core customer daily sales continued the trend of outperforming total company with year-over-year improvement of approximately 8% in the quarter. National accounts saw an improving trend compared to the first half of the year with growth of approximately 7% in the third quarter. In the public sector, daily sales improved roughly 8%, primarily driven by increased defense activity and a lower prior year comparison. In solutions, we remain pleased by the continued expansion of our footprint in 3Q. In vending, the number of machines installed at quarter end increased 7% year-over-year to approximately 30,800 machines. The number of customers with an in-plant program improved 7% year-over-year to 426 programs. Signings in Q3 were higher than the sequential increase in total program count. Average daily sales through vending were up 15% year-over-year and represented approximately 20% of total company net sales. Sales to customers with an in-plant program were up 16% year-over-year and represented approximately 21% of total company net sales. Gross margin of 41.1% came in slightly ahead of our expectations and improved 10 basis points year-over-year. Operating expenses in fiscal third quarter were approximately $324 million on a reported basis. On an adjusted basis, operating expenses of $319 million increased approximately $9 million year-over-year, however we saw a sizable improvement in adjusted operating expenses as a percentage of sales with declines of 150 basis points year-over-year and 310 basis points quarter-over-quarter. Reported operating margin for the quarter was 10.2% compared to 8.5% in the prior year. On an adjusted basis, operating margin of 10.6% exceeded the high end of our outlook and compared favorably to 9% in the prior year. We delivered GAAP EPS of $1.44 compared to $1.02 in the prior year. On an adjusted basis, we delivered EPS of $1.43 compared to $1.08 in the prior year, an improvement of 32%. On the balance sheet and free cash flow — we continue to maintain a healthy balance sheet with net debt of approximately $433 million, representing roughly 1x EBITDA. Capital expenditures of $21 million were down slightly year-over-year, and we achieved free cash flow conversion above 100% despite the step-up in AR related to the increase in sales. This is resulting in free cash flow conversion of 94% fiscal year-to-date, keeping us on track to achieve our updated target of 95% for the fiscal year. On capital allocation — our highest priorities remain organic investment to fuel growth and advance operational efficiencies. Returning capital to shareholders also remains a priority with approximately $49 million returned to shareholders in fiscal 3Q and $160 million fiscal year-to-date in the form of dividends and share repurchases. For the fourth quarter outlook — to reflect quarter-to-date trends including daily sales in fiscal June expected to grow approximately 7% and more difficult comparisons with prior year, we are anticipating average daily sales improvement of 6.5% to 8.5% compared to the prior year, gross margins to follow the historical 3Q to 4Q sequential decline of 40 to 50 basis points, and continuation of profitable growth with the midpoint of our adjusted operating margin range of 10% to 10.8%, implying adjusted incremental operating margins in the mid-20s. We have updated expectations for some line items for the fiscal year. We now expect depreciation and amortization expense of approximately $100 million versus our prior expectation of $90 million to $100 million. We're also reducing our CapEx assumption from $100 million to $110 million to approximately $100 million, resulting in free cash flow conversion expectations increasing from 90% to approximately 95% for the fiscal year. Other line items remain unchanged, including interest and other expenses of approximately $30 million and a tax rate between 24.5% to 25.5%. With that, we will open the line for Q&A. Operator: Your first question is coming from Chris Dankert with D.A. Davidson. Christopher Dankert: As we look at the fourth quarter guide, can you help us right size how much of that is underlying core volume improvement versus pricing? The pricing comp is a lot deeper here. Martina McIsaac: Sure. We obviously had the beginning of some of our pricing actions impact the fourth quarter last year. But we do see continuing volume improvement. We're up against tougher comps in the fourth quarter. Ryan, maybe you want to share some color for modeling purposes. Ryan Mills: Chris, the way I would think about volumes and price in 4Q is price was about 7.3% year-over-year in 3Q. As Martina mentioned, we'll begin lapping some of our more meaningful price actions related to tariffs in 4Q last year. We did put some price in May related to what we're seeing in metalworking and other product categories. I would think about price being in that 6.5% to 7% range but definitely implying volume improvement at the midpoint. Our volume comparison in 4Q is about 300 basis points tougher relative to Q3, so we feel good about what we're seeing. Christopher Dankert: Got it. And on the sales force realignment — can you give us a sense for how execution tracked through the quarter to your expectations, and whether you're pleased with how sales growth and coverage have moved as we got into June? Martina McIsaac: Absolutely, we're exactly where we thought we would be. Think about this in 2 phases. First, the structure — the analogy I use with the team is you want to get wet if it rains. You want to be in the right place at the right time with the right opportunities, with the right programs, and able to take advantage of the tailwind we're seeing in industrial trends. Proof points: vending and in-plant ADS up mid-teens in the quarter, vending per unit up high single digits — that's the coiled spring we've been waiting for. The structure piece is behind us, and we're happy with our segmentation and coverage. The next piece, which is really more exciting, is making it rain — that's what we're talking about around the sales excellence side. We've compressed our time to hire, we've filled the vacancy, we're onboarding and training people differently, we've got new sales management processes. So now we start to drive growth and volume through day-to-day activity and sales management. We're exactly where we thought we'd be. This is a long game we're playing, and you'll start to see it as the volume improves in the next quarter and beyond. Operator: Your next question is coming from Ken Newman with KeyBanc Capital Markets. Kenneth Newman: Martina, could you help us level set on how to think about tracking your progress on productivity initiatives into next year? You mentioned being about 1,000 heads heavy at current revenue levels, but how do you view that evolving as volumes inflect into next year? Martina McIsaac: That's important for us all to be on the same page on. We needed an internal benchmark to anchor ourselves against in our commitment to a mid-teens operating margin. We benchmarked to say that today, to deliver $4 billion in sales, it takes us 1,000 more people than it would take one of our public peers. If you quickly do the math, we're generating about $570,000 per head today. We want that number to be $100,000 more — that's what the 1,000 heads turns into. The team takes that target and says either I need to grow without adding heads, or I need to take heads out to make my processes more efficient. It's a combination of both, because we want to improve associate experience, take manual work out, and build a foundation that can absorb growth without needing new headcount. We have a road map mapped out for '27 that gets us closer to that benchmark. We're not going to share a lot of details upfront for competitive reasons and to support the strong momentum and morale within the company around this benchmark. But as we log the wins, we will share them. You'll see them in those 2 numbers — absolute headcount progress on total heads less sales headcount, and the ratio. It's not going to be linear — some projects are small, some are much bigger, some are short term, some take a little longer. Kenneth Newman: And on operating leverage from 3Q to 4Q — the midpoint implies incremental margins in the mid-20% range versus low 30s this quarter. Why does operating leverage step down sequentially? Ryan Mills: Not overly concerned. It's mainly driven by the timing of some actions and some moving pieces in the prior year. Freight year-over-year in 3Q was about a $3 million good guy. We will start to lap some of our network optimization savings in 4Q, which will be a bad guy year-over-year due to fuel costs. Another factor is that we'll start to anniversary headcount actions taken at the end of last fiscal year. But our profitable growth algorithm still remains intact — mid-single digits incremental margins should be at least 20%; as we near high single to low double digits, incremental margins should be at the upper end of 20%, closer to 30%. Operator: Your next question is coming from Ryan Merkel with William Blair. Ryan Merkel: Martina, I wanted to start on the comments you made about the industrial recovery. What inning do you think we are in? And have you seen customers adding more shifts yet to plants and restocking inventory, or might that be a future tailwind? Martina McIsaac: I think we're probably in the third inning. We are starting to see changes in behavior. The most notable, which we haven't sized yet but are watching closely, is that summer shutdown patterns are changing significantly — particularly in automotive, preplanned shutdowns are being canceled or not being announced as they would have been. Still spotty, but it's real, and that's probably the best indicator that we have. Ryan Mills: In 3Q, our top 5 end markets saw strong growth in 4 of them with the exception of automotive. As we headed into June, we saw automotive turn positive, which is another good sign. And looking at average daily sales in vending and in-plant on a per unit basis, we were up high single digits, which implies volume improvement — a good gauge on industrial demand. Ryan Merkel: On pricing — 7% price was a little better than expected. Just talk about why that was. And on tungsten, are you done seeing price increases from suppliers? And how much is tungsten carbide up year-over-year in 3Q? Martina McIsaac: We're not done. Tungsten is still the largest driver of our inflation. Suppliers' reaction depends on the nature of their own supply chain. We will plan for a price action in the fourth quarter. Tungsten overall is up over 500%, so we haven't really seen a slowdown yet. We haven't seen a lot of prebuying. Cutting tool volume is still growing for us, which is an important metric because we want to make sure there's no demand destruction. There aren't a lot of substitutes for carbide cutting tools. So we're still seeing inflation but still seeing growth, and we don't see the end of the price increases yet. Ryan Mills: Just going back to your first question on pricing in 3Q — it came in a little bit better than anticipated. A couple of things drove that. We saw cutting tool volumes inflect positively, and the inflation there contributed. We also talked about being more strategic with pricing in certain categories and streamlining some discounting templates — that occurred more later in 3Q, so not too much of an impact in the quarter, but we're pleased with the pricing and more encouraged that we saw volume inflect positively. Operator: Your next question is coming from Nigel Coe with Wolfe Research. Nigel Coe: Can you comment on how the price-cost gap is trending in 3Q into 4Q? And when we look at the monthly sales performance, May was weaker and June was stronger — it looked like a possible prebuy ahead of price increases. Any comments? Martina McIsaac: I can see how if you look at April, May, June, you'd wonder if it's going in the right direction. We had a couple of structural things impacting that — Easter moved, which inflated our April. And then June, typically for us is a 250 basis point drop because of our 5-week month and the holiday timing. Actually this year, it's about a 50 basis point increase. So we've seen some shifting, but no real concern. We're pretty happy with where sales are. And price/cost positive contributed 20 to 30 basis points to margin in the quarter. Nigel Coe: Does that still look similar in 4Q? And could you break out SG&A between payroll, freight, et cetera? And how should we think about SG&A growth relative to sales in '27? Martina McIsaac: The one thing I'm most happy about is what we tried to achieve with our variable compensation redesign is being felt. One of the issues that MSC struggled with in the past is that we didn't have a responsive commission program — sales might be down, but we wouldn't see the benefit in our SG&A. The new comp design, this is the first quarter we see it fully working the way it should. I'll pass it to Greg for the SG&A breakdown. Gregory Clark: I'm encouraged to see the evidence that we're making progress on our cost structure as seen by the 150 basis points decline in operating expenses as a percentage of sales. On the $9 million step-up year-over-year in operating expenses — it was driven primarily by increases related to personnel-related expenses, continued investments in-plants and advertising, a little incremental D&A pickup, and an unexpected year-over-year step-up of a few million dollars in bad debt expense driven by a couple of isolated customers, not reflective of the current environment. Partially offsetting that was lower freight from our network initiatives, and some early benefits from our sales force optimization work eliminating duplicative commissions despite higher sales volumes. On payroll and payroll-related costs as a percentage of sales — it's an improvement year-over-year of about 250 basis points, going to 53.7% versus 56.1% in the prior year. Martina McIsaac: On volume, which is on everybody's mind including ours — volumes returned to growth across all customer types in April and May, and we see it again in June. We were flat on volumes in Q1, we dug ourselves to about negative 4% in Q2, and we're back to just above flat and positive in all customer types for Q3. We expect that to continue to grow. We have very weak volume comps coming up, and as we start lapping price, we're very confident we'll start to see that impact in volume. Our growth forum pipeline has $500 million in opportunities and we converted about 10% of that on an annualized basis. The pipeline management and sales coaching will continue to drive volumes. We're optimistic. On '27 — we've got a good solutions footprint, we're starting to see ADS up mid-teens for vending and in-plant and high single digits through machines. We have to optimize the volume through machines, and the industrial recovery is the wind in those sails. Sales excellence continues to develop. I think a combination of those things will see our volumes start to accelerate — we're out of the hole that we dug. Operator: Your next question is coming from Tommy Moll with Stephens Inc. Thomas Moll: All the commentary around demand and volumes returning to growth sounds pretty positive. But on the guide for Q4, where the midpoint implies in July and/or August another trend above your typical month-over-month progression — June is a pretty high bar. What gives you the confidence to make that assumption? Ryan Mills: We just feel confident in what we're seeing. Whether it's the macro or the pipeline, we're continuing to see benefits from our sales force work grow. The sales excellence program is starting to take hold. We feel like we're on good footing and feel confident that trend will continue. There might be a little more price in the quarter depending on what we see from suppliers. But as we sit here today, we don't feel like we've gotten ahead of our skis. And just to dive a little deeper on July and August — if you look at July and August ADS combined versus June, historically we're up around 50 basis points. The midpoint of our outlook implies a little more than 1%, so we're not implying a lot more volume improvement. Martina McIsaac: Selling for MSC today represents something very different compared to a year ago. We're still a short-cycle business and will still have limited insight into what's coming. But the pipeline management, the white space steering, the conversion on the growth forum pipeline — those are becoming very real and starting to have teeth in our planning. The change in onboarding has put about 120 sellers through a new program to get them to money faster. We're measuring that time and intervening when it's stretching out. These are muscles we're building, and I don't have all the proof points for you today that I'll have 6 months from now, but I'm very confident in the infrastructure and the ecosystem. Thomas Moll: As a follow-up on incremental margins — you've addressed the benefits from prior restructuring actions and the internal benchmark to continue improving employee productivity. Is mid-20s a fair base case for fiscal 2027? Martina McIsaac: We have not updated the algorithm that Ryan mentioned. So mid-single digits — 20% higher than that — we do the math. There probably will be a moment that we could sharpen that algorithm and give you a more aggressive direction. In terms of the 4Q outlook, where gross margin is entirely based on historical performance, our mix typically changes, we're starting to lap some price actions — there could be some upside there. We've also got some onetime things we're comping in Q4 in terms of some personnel actions. Otherwise, I think the incremental would be stronger for the fourth quarter. Ryan Mills: I just want to say one more thing — it's clear we're fundamentally doing more with less. We're beginning to grow volumes. Full-time headcount is down 360 year-over-year and billed sales force is down 225. That's the one thing we're most encouraged about. Operator: Your next question is coming from Steve Volkmann with Jefferies. Stephen Volkmann: Just to come back to the 1,000 heads relative to volume — is that still the right number? Because you also said you were down 225 on sales heads in the field. Are we starting from 1,000 or are we already below that? Martina McIsaac: The clock resets. Take the starting point at the beginning of the third quarter. The sales actions and previous actions that we've taken — that's not in the benchmark. The benchmark of $650,000 to $670,000 per head is based on the starting point of today. Stephen Volkmann: And as you've gotten further into this process, if you can get back to a 15% EBIT margin, where is gross margin roughly in that scenario? Martina McIsaac: One of the things we are convicted of is we would really not like to expand gross margin above that 40% to 41% range, because volume is our priority. We didn't mention gross margin in those KPIs on purpose — we really want to drive volume. You should think about that 40% to 41% range as a steady level, and anything that we achieve because of our own efficiencies or because of our pricing professionalization, we'd like to take those proceeds and turn them into price for our customers so that we can continue to grow volume. There's a competitiveness opportunity there as we continue to improve our gross margin. Operator: Your next question is coming from David Manthey with Baird. David Manthey: I'd like to discuss the 6.8% growth in manufacturing specifically. I assume pricing in manufacturing, because of tungsten, is greater than the company average of 7.2%. Are you disappointed you haven't seen a resurgence in manufacturing volume growth at this point in the cycle, or is it your expectation we'll see that next quarter and beyond? Ryan Mills: One thing driving that is if you think about our smallest to small core customers — uncovered core customers that transact on the web — web average daily sales were up double digits. Those are characterized in the other bucket and fall into nonmanufacturing. So on a mix basis, it's showing 6.8%, but in all other purposes, I would say that number is a little depressed just because of how we characterize the smallest to small core customers. Martina McIsaac: Are we blowing it out of the water on volume yet? We're not. We've completed Phase 1 of our restructuring. Now what we expect to see is the volume growth. There is volume underlying everything we're doing as we're covering new customers now with the new segmentation. When I see vending up high teens, that's coming from manufacturing growth. We see it across different customer segments. David Manthey: If you strip out price, it seemed like contribution margin ex price would have been negative. Guiding Q4 lower, are there other lingering cost factors before we get to operational contribution margins in that 20% range? There seems to be an implied price-to-volume handoff upcoming, and I wonder what your confidence level is there. Ryan Mills: If you look at 2Q, we had a 25% incremental margin, low 30s here in 3Q and then 4Q implying about 23% at the midpoint. A portion of that is driven by the timing of some of our headcount actions in the prior year and some moving pieces year-over-year — freight was a good guy in 3Q and will be a bad guy in 4Q. D&A will also step up a little year-over-year. Our long-term growth algorithm remains intact — mid-single digits, at least 20% incremental margins. Martina McIsaac: We've been here before. When we were in the post-COVID period and there was a lot of price inflation, we had attractive numbers that weren't sustained by operational change. That's not where we are right now. Those freight savings are absolutely real. We're taking the same fuel increases as everyone else but we've optimized the network and we're paying less. We're down 360 headcount and still absorbing the volume that we need. We are finding productivity in a lot of small processes. Not all cylinders are firing yet, but there's progress everywhere, and that momentum is real. Operator: This now concludes the question-and-answer session. I would now like to turn the floor back over to Ryan Mills for closing remarks. Ryan Mills: Thank you, everyone, for joining today's call. Our fiscal fourth quarter earnings call will be on October 22. Operator: Thank you, everyone. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation. Before you buy stock in MSC Industrial Direct, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and MSC Industrial Direct wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $385,055!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,228,089!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of July 1, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. MSC Industrial (MSM) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

MSC Industrial Direct Company, Inc. MSM reported adjusted earnings per share of $1.43 for the third quarter of fiscal 2026, beating the Zacks Consensus Estimate of $1.28 by 11.72%. The bottom line increased 32.4% from the year-ago quarter’s adjusted earnings of $1.08 per share.Including one-time items, the company reported EPS of $1.44 compared with the year-ago quarter’s earnings of $1.02. Net sales were $1.05 billion, surpassing the consensus estimate of $1.03 billion by 1.74%. Sales increased 7.8% year over year, driven by stronger average daily sales, price benefits and a return to volume growth. Average daily sales increased 7.8% year over year and came in above the company’s quarterly outlook range. MSC Industrial Direct Company, Inc. price-consensus-eps-surprise-chart | MSC Industrial Direct Company, Inc. Quote The cost of goods sold increased 7.5% year over year to $617 million. Gross profit moved up 8.2% to $430 million. The gross margin was 41.1% compared with the year-ago quarter’s 41%. Operating expenses rose 3.6% year over year to $324 million in the fiscal third quarter. Adjusted operating income amounted to $111 million, up 27.5% from the prior-year quarter. The adjusted operating margin expanded 160 basis points to 10.6%, supported by higher sales, gross margin gains and savings from headcount actions taken over the past 12 months. Core and Other Customers grew 8% year over year, while Public Sector sales were also up 8%. National Accounts increased 7%, reflecting improvement in a channel that the company highlighted as showing notable progress. Solutions-related sales also gained momentum. Sales to customers with an In-Plant program increased 16% and represented 21% of the total sales. Sales through vending machines rose 15% and accounted for 20% of sales, underscoring continued traction in MSC’s embedded customer solutions. MSM had cash and cash equivalents of $74 million at the end of the fiscal third quarter of 2026 compared with $56 million at the end of fiscal 2025. It generated cash flow from operating activities of $225.5 million in the first nine months of fiscal 2026 compared with $253.5 million in the first nine months of fiscal 2025. The company’s long-term debt was $90 million at the end of the reported quarter, down from $169 million at the end of fiscal 2025. For the fourth quarter of fiscal 2026, MSC Industrial expects average daily year-over-year sales growth of 6.5-8.5%. The mid-point assumes July and August average daily sales improving around 8% year over year, implying volume improvement. The company expects an adjusted operating margin of 10-10.8% in the fiscal fourth quarter. The company’s shares have gained 43% in the past year compared with the industry’s growth of 5.8%. Image Source: Zacks Investment Research MSM currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. W.W. Grainger, Inc. GWW is expected to release second-quarter 2026 results soon. The Zacks Consensus Estimate for Grainger’s earnings per share is pegged at $11.16 for the second quarter, implying growth of 11.9% from the year-ago reported figure. The consensus estimate for Grainger’s total sales is pinned at $4.94 billion, indicating a year-over-year increase of 8.5%. Hudson Technologies, Inc. HDSN is anticipated to release second-quarter 2026 results soon. The Zacks Consensus Estimate for Hudson’s earnings per share is pegged at 17 cents for the second quarter, implying a decline of 26% from the year-ago reported figure. The consensus estimate for Hudson Industrial’s total sales is pinned at $73.7 million, indicating a year-over-year increase of 1.1%. SiteOne Landscape Supply, Inc. SITE is expected to release second-quarter 2026 results soon. The Zacks Consensus Estimate for SiteOne Landscape Supply’s earnings per share is pegged at $3.39 for the fiscal second quarter. The company reported earnings of $2.86 in the year-ago quarter. The consensus estimate for SiteOne Landscape Supply’s total sales is pinned at $1.55 billion, indicating a year-over-year increase of 5.9%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MSC Industrial Direct Company, Inc. (MSM) : Free Stock Analysis Report W.W. Grainger, Inc. (GWW) : Free Stock Analysis Report Hudson Technologies, Inc. (HDSN) : Free Stock Analysis Report SiteOne Landscape Supply, Inc. (SITE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. MSC Industrial Direct Co., Inc. will release its third-quarter earnings report before the opening bell on Wednesday, July 1. Analysts expect the company to report quarterly earnings of $1.26 per share, up from $1.08 per share in the year-ago period. The consensus estimate for MSC Industrial Direct’s quarterly revenue is $1.03 billion. It reported $971.14 million last year, according to Benzinga Pro. DA Davidson analyst Chris Dankert, on June 16, initiated coverage on MSC Industrial Direct with a Buy rating and announced a price target of $145. Don’t Miss: The Average Family’s Finances Are More Complicated Than Ever. These Tools Aim To Make Them Easier To Manage. Think Your ‘Safe’ Stocks Protect You? You’re Ignoring the Real Growth Triggers — Here’s What to Add Now With the recent buzz around MSC Industrial Direct, some investors may be eyeing potential gains from the company’s dividends too. As of now, MSC Industrial Direct has an annual dividend yield of 2.98%, which is a quarterly dividend amount of 87 cents per share ($3.48 a year). So, how can investors use its dividend yield to pocket a regular $500 per month? To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $201,139 or around 1,724 shares. For a more modest $100 per month or $1,200 per year, you would need $40,251 or around 345 shares. To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($3.48 in this case). So, $6,000 / $3.48 = 1,724 ($500 per month), and $1,200 / $3.48 = 345 shares ($100 per month). Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time. Trending: Caught With Nothing Saved for Retirement? These 5 Game‑Changing Tips Could Still Save You How that works: The dividend yield is computed by dividing the annual dividend payment by the stock’s current price. For example, if a stock pays an annual dividend of $2 and is currently priced at $50, the dividend yield would be 4% ($2/$50). However, if the stock price increases to $60, the dividend yield drops to 3.33% ($2/$60). Conversely, if the stock price falls to $40, the dividend yield rises to 5% ($2/$40). Similarly, changes in the dividend payment can impact the yield. If a company increases its dividend, the yield will also increase, provided the stock price stays the same. Conversely, if the dividend payment decreases, so will the yield. Photo via Shutterstock Read Next: Think you’re saving enough for your kids? You might be dangerously off — see why Still Learning the Market? 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Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. MSC Industrial Direct stock has delivered a 63.1% total return over the past five years, yet the company currently screens as expensive on broad valuation checks. This sets up a clear question over how much of its recent strength is already reflected in the price. A 63.1% return over five years highlights that long term shareholders have already seen a solid payoff, which can reduce the margin of safety for new capital going in at today’s levels. Recent sales growth and margin improvement may support expectations for further earnings strength. However, any slowdown in industrial demand or pressure on pricing could challenge the current valuation. MSC Industrial Direct scores 0 out of 6 on Simply Wall St’s broader valuation checks, which suggests the stock does not screen as a clear bargain overall and instead leans on the expensive side 0/6. The issue now is whether MSC Industrial Direct’s current share price leaves enough potential upside to justify that richer valuation profile. MSC Industrial Direct delivered 43.1% returns over the last year. See how this stacks up to the rest of the Trade Distributors industry. The P/E ratio is a useful way to see how much you are paying for each dollar of MSC Industrial Direct’s earnings. Right now, MSC Industrial Direct trades on a P/E of 33.2x, compared with an average of about 24.1x for the Trade Distributors industry and a peer group average of 22.5x. This indicates the stock carries a clear premium to both its sector and closer peers. The fair P/E multiple implied by broader factors such as the company’s size, industry, and risk profile is 21.8x, which sits well below the current 33.2x. That gap indicates investors are currently willing to pay a higher price than this framework would support. Despite recent quarterly beats on sales and earnings lifting sentiment, the valuation remains well ahead of what the fair multiple would indicate. On the P/E multiple, MSC Industrial Direct currently appears overvalued compared with both its fair ratio and sector benchmarks. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for MSC Industrial Direct pick up where this valuation puzzle leaves off by spelling out which combinations of future growth, margins and earnings would need to play out for the stock to be worth materially more or less than today's price on the Community page. Each narrative links a specific catalyst and risk mix to an implied fair value, so you can track over time which version of MSC Industrial Direct's story is actually unfolding. One of the top community narratives on MSC Industrial Direct: 20% overvalued Read one of the top narratives on MSC Industrial Direct Do you think there's more to the story for MSC Industrial Direct? Head over to our Community to see what others are saying! For MSC Industrial Direct, the current message from the market-multiple view is clear: the stock screens as overvalued relative to sector benchmarks and a fair P/E estimate. With broader valuation checks also coming through as weak, the market is already baking in a generous outlook for earnings power. From here, the key question for you is whether MSC Industrial Direct can sustain the kind of growth and margin profile that keeps this higher multiple intact, or whether a reset in expectations pulls the valuation closer to peers. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include MSM. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

MSC Industrial Direct Co., Inc. MSM used its fiscal third-quarter earnings call to argue that its turnaround is moving past disruption and into execution. Management pointed to improving volume trends, firmer national account performance and better operating leverage as signs that recent structural changes are beginning to translate into cleaner results.The central message was less about the quarter itself and more about what comes next. Executives said the company is now positioned to use a better industrial backdrop, tighter sales discipline and a leaner cost base to push toward stronger growth and a mid-teens operating margin over time. President and CEO Martina McIsaac said MSC Industrial is now managing the business against a narrower set of targets: sales per rep per day, sales per total headcount, year-over-year volume improvement, adjusted operating margin expansion, adjusted incremental margin and return on invested capital. She framed those measures as the clearest way for investors to judge whether the turnaround is gaining traction.McIsaac kept her tone measured. She said MSC Industrial is not yet producing breakout results, but described the quarter as a collection of smaller operational wins that indicate the company is heading in the right direction.That matters because management is asking investors to focus less on one quarter’s headline numbers and more on whether productivity, volume and margin discipline are improving together. McIsaac said the sales force optimization completed in December created noise in fiscal second quarter results, but that headwind is now largely behind the company. She cited improving average daily sales among affected customers and an inflection in national accounts as evidence that coverage and execution are stabilizing.McIsaac also said sales per rep per day improved by the high teens year over year, even with 225 fewer field heads. That was presented as proof that MSC Industrial is generating more productivity from a smaller commercial footprint.The remaining task, by management’s account, is to close the gap between customers least affected by the redesign and those still rebuilding relationships after rep changes or vacancies. Third-quarter sales increased 7.8% year over year to $1.05 billion, beating the Zacks Consensus Estimate of $1.03 billion by 1.74%. Adjusted EPS rose to $1.43 from $1.08 a year earlier, surpassing the Zacks Consensus Estimate of $1.28. MSC Industrial Direct Company, Inc. price-consensus-eps-surprise-chart | MSC Industrial Direct Company, Inc. Quote Interim CFO Greg Clark said price remained the main growth driver, contributing 720 basis points to sales growth, while volume added 50 basis points. Even so, management repeatedly stressed that volume improved through the quarter and turned positive across customer types.McIsaac also made clear that MSC Industrial does not want the story to remain price-led. She told analysts the company would prefer to keep gross margin around the 40% to 41% range and use efficiency gains and pricing discipline to support competitiveness and volume growth. Clark said adjusted operating margin reached 10.6%, up from 9% a year ago, while adjusted operating expenses fell 150 basis points as a percentage of sales. He attributed the improvement to productivity and headcount actions, lower freight expense and reduced duplicate commission costs under the new sales structure.McIsaac said the bigger internal benchmark remains headcount efficiency. She told analysts that MSC Industrial is still about 1,000 heads heavy relative to peer benchmarks at current revenue levels and said progress should be tracked through sales per head and absolute non-sales headcount.That benchmark turned into one of the call’s most important themes because management tied future margin expansion to AI, automation and process redesign rather than to gross margin expansion alone. Management said industrial demand is improving, though still unevenly. McIsaac described the recovery as being around the third inning and pointed to changing summer shutdown patterns, especially in automotive, as one of the clearest behavioral signals that conditions are getting better.Clark also highlighted stronger solutions activity. Vending machine installations rose 7% to about 30,800, in-plant programs increased 7% to 426, and average daily sales through vending and in-plant customers rose 15% and 16%, respectively.In Q&A, management added that automotive turned positive in June and that vending and in-plant sales per unit were up high single digits, reinforcing the argument that volume is improving underneath the pricing tailwind. For the fiscal fourth quarter, MSC Industrial guided to average daily sales growth of 6.5% to 8.5% and an adjusted operating margin of 10% to 10.8%. Clark said the outlook assumes a normal 40 to 50 basis point sequential gross margin decline and mid-20s adjusted incremental margin.A D.A. Davidson analyst asked how much of the guide depends on pricing versus volume. Ryan Mills, head of investor relations, said price should run in the 6.5% to 7% range in the fiscal fourth quarter, implying volume improvement at the midpoint despite tougher comparisons.A Stephens analyst also challenged whether the outlook assumes too much momentum after a strong June. Mills responded that the midpoint implies only a modest step-up versus June and said the company feels confident in the current demand and execution backdrop. By the end of the call, management’s posture was clear: the restructuring phase is mostly complete, and the next phase is proving that improved sales execution and lower structural cost can produce sustained volume and margin gains. McIsaac sounded confident, but she did not overreach on the pace of that payoff.MSM currently carries a Zacks Rank #2 (Buy), with a Value Score of C, Growth Score of B, Momentum Score of C and VGM Score of B. The rank remains the primary signal, while A and B Style Scores are the more favorable combinations, especially with a Zacks Rank #1 (Strong Buy) or #2. The current mix points to a constructive near-term profile, although the Zacks Rank can change as earnings estimate revisions shift after the quarter. You can see the complete list of today’s Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MSC Industrial Direct Company, Inc. (MSM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

In its recently reported third quarter ended May 30, 2026, MSC Industrial Direct posted sales of US$1,047.08 million and net income of US$80.36 million, with basic earnings per share from continuing operations of US$1.44, all higher than the same period a year earlier. This earnings beat, supported by stronger average daily sales and improved operating margins from productivity initiatives, points to meaningful progress in MSC Industrial Direct’s efforts to enhance efficiency and profitability. Next, we’ll examine how this margin improvement and earnings beat influence MSC Industrial Direct’s existing investment narrative and future expectations. Capitalize on the AI infrastructure supercycle with our selection of the 52 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. To stay invested in MSC Industrial Direct, you need to believe its focus on productivity, salesforce optimization and higher value solutions can offset cyclical industrial softness and cost pressures. The latest quarter’s stronger sales, margin expansion and earnings beat help the near term catalyst of improved profitability feel more tangible, although macro demand and tariff risks remain key swing factors. Overall, the news supports rather than transforms the existing thesis and does not remove the main risks. Among recent announcements, the affirmation of the US$0.87 quarterly dividend on June 16, 2026, stands out alongside the earnings beat. Together, they highlight management’s willingness to return cash to shareholders while reporting higher sales, net income and earnings per share versus a year earlier. For investors focused on income plus operational improvement, this mix of dividend continuity and margin progress is likely to be particularly relevant when thinking about the near term setup. Yet behind the strong quarter, investors should still be aware of how softer industrial demand or tariff driven cost pressures could... Read the full narrative on MSC Industrial Direct (it's free!) MSC Industrial Direct's narrative projects $4.5 billion revenue and $322.6 million earnings by 2029. This requires 5.3% yearly revenue growth and about a $115 million earnings increase from $207.7 million today. Uncover how MSC Industrial Direct's forecasts yield a $103.14 fair value, a 16% downside to its current price. Some of the lowest ranked analysts were assuming revenue of about US$4.4 billion and earnings of roughly US$311 million by 2029, which is far more cautious than the consensus, especially when you factor in concerns about salesforce restructuring ramp time and potential pricing pushback that the latest earnings beat may or may not fully address. Explore 2 other fair value estimates on MSC Industrial Direct - why the stock might be worth as much as $103.14! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your MSC Industrial Direct research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision. Our free MSC Industrial Direct research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate MSC Industrial Direct's overall financial health at a glance. Every day counts. These free picks are already gaining attention. See them before the crowd does: Invest in the nuclear renaissance through our list of 89 elite nuclear energy infrastructure plays powering the global AI revolution. Uncover the next big thing with 21 elite penny stocks that balance risk and reward. The future of work is here. Discover the 29 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include MSM. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Average Daily Sales Growth: 7.8% year-over-year growth. Adjusted Operating Margin: 10.6%, with an incremental operating margin of 32%. Fiscal Third Quarter Sales: $1.047 billion, a 7.8% increase year over year. Gross Margin: 41.1%, a 10 basis point improvement year over year. Adjusted Operating Expenses: $319 million, with a 150 basis point reduction as a percentage of sales year over year. Adjusted EPS: $1.43, a 32% improvement from the prior year. Net Debt: Approximately $433 million, representing roughly 1 times EBITDA. Free Cash Flow Conversion: 94% fiscal year to date, with a target of 95% for the fiscal year. Vending Machine Installations: Increased 7% year over year to approximately 30,800 machines. Implant Program Growth: 7% year over year to a total of 426 programs. Capital Returned to Shareholders: $49 million in fiscal 3Q and $160 million fiscal year to date. Warning! GuruFocus has detected 8 Warning Sign with MSM. Is MSM fairly valued? Test your thesis with our free DCF calculator. Release Date: July 01, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Average daily sales exceeded expectations with year-over-year growth of 7.8%, driven by core customers and national accounts. Adjusted operating margin improved to 10.6%, surpassing expectations and resulting in an incremental operating margin of 32%. Sales per rep per day improved by high teens year over year, indicating increased efficiency with fewer sales heads. The company achieved a 150-basis-point reduction in adjusted operating expenses as a percentage of sales. MSC Industrial Direct Co Inc (NYSE:MSM) was awarded the Verint Global Customer Award for its efforts in AI implementation. Despite improvements, there remains a gap in average daily sales between customers least impacted by changes and those more affected. The company is relatively heavy by 1,000 heads compared to public peers, indicating a need for further efficiency improvements. Freight expenses are expected to be a headwind in the fourth quarter due to lapping network optimization savings. The company faces a tougher volume comparison in the fourth quarter, with a 300 basis point tougher comp relative to the third quarter. There was an unexpected increase in bad debt expense during the quarter, driven by a few isolated customer issues. Q: Can you help us understand the breakdown of the fourth-quarter guidance in terms of core volume improvement versus pricing? A: Martina McIsaac, CEO, explained that while they began some pricing actions in the fourth quarter last year, they are seeing continuing volume improvement. Ryan Mills, Head of Investor Relations, added that price was about 7.2% year over year in the third quarter, and they expect it to be in the 6.5% to 7% range in the fourth quarter, implying volume improvement at the midpoint despite tougher comps. Q: How is the salesforce realignment progressing, and are you satisfied with the execution? A: Martina McIsaac, CEO, stated that they are exactly where they expected to be. The structure phase is complete, and they are now focusing on sales excellence, including compressing time to hire, filling vacancies, and implementing new sales management processes. This is expected to drive growth and volume through day-to-day activities. Q: How should we track your progress on productivity initiatives into next year, considering you mentioned being 1,000 heads heavy at current revenue levels? A: Martina McIsaac, CEO, explained that they are committed to achieving a mid-teens operating margin and have benchmarked themselves against public peers. They aim to either grow without adding heads or make processes more efficient. The focus is on improving associate experience, customer experience, and using AI and automation to absorb growth without increasing headcount. Q: Why might operating leverage step down from 3Q to 4Q despite ADS growth? A: Ryan Mills, Head of Investor Relations, noted that the decrease in operating leverage is mainly due to timing of actions and moving pieces in the prior year, such as freight costs and headcount actions. Despite this, the profitable growth algorithm remains intact, with mid-single digits incremental margins expected to be at least 20%. Q: What inning do you think we are in for the industrial recovery, and have you seen customers adding more shifts or restocking inventory? A: Martina McIsaac, CEO, believes they are in the third inning of the industrial recovery. They are starting to see changes in behavior, such as altered summer shutdown patterns in automotive, indicating a positive trend. Ryan Mills added that top end markets saw strong growth, and automotive turned positive in June, suggesting an industrial recovery is underway. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

MSC Industrial (MSM) came out with quarterly earnings of $1.43 per share, beating the Zacks Consensus Estimate of $1.28 per share. This compares to earnings of $1.08 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +12.10%. A quarter ago, it was expected that this distributor of industrial tools and supplies would post earnings of $0.84 per share when it actually produced earnings of $0.82, delivering a surprise of -2.38%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. MSC Industrial, which belongs to the Zacks Industrial Services industry, posted revenues of $1.05 billion for the quarter ended May 2026, surpassing the Zacks Consensus Estimate by 1.74%. This compares to year-ago revenues of $971.15 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. MSC Industrial shares have added about 41.4% since the beginning of the year versus the S&P 500's gain of 9.6%. While MSC Industrial has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for MSC Industrial was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.29 on $1.05 billion in revenues for the coming quarter and $4.36 on $3.95 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Industrial Services is currently in the bottom 22% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Hudson Technologies (HDSN), another stock in the same industry, has yet to report results for the quarter ended June 2026. This refrigerant services company is expected to post quarterly earnings of $0.17 per share in its upcoming report, which represents a year-over-year change of -26.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Hudson Technologies' revenues are expected to be $73.66 million, up 1.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MSC Industrial Direct Company, Inc. (MSM) : Free Stock Analysis Report Hudson Technologies, Inc. (HDSN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research