MSC Industrial Supply Co. reported higher sales and profit in its fiscal first quarter, marking a return to earnings growth as the industrial distributor benefited from improved execution and tighter cost control despite uneven demand tied to a federal government shutdown.
For the quarter ending Nov. 29, MSC said revenue rose 4.0% to $965.7 million, up from $928.5 million a year earlier. Net income attributable to the company increased 11.1% to $51.8 million, compared with $46.6 million in the prior year period.
The company said higher volumes and improved operating discipline helped lift results even as demand was pressured early in the quarter by a federal government shutdown, which reduced sales by about 100 basis points.
President and CEO Martina McIsaac said the quarter reflected continued progress from recent growth initiatives rather than a broad recovery in industrial markets. She noted that MSC’s sales growth outpaced overall U.S. industrial production during the period.
“We began the fiscal year on solid footing,” McIsaac said, citing improved execution and a sharper focus on costs as key factors behind the company’s return to profit growth.
Digital capabilities continued to play a larger role in MSC’s operating model. The company said web-based sales increased from a year earlier, extending a longer-term shift toward online ordering, integrated account tools, and automated replenishment. Executives described digital commerce as embedded across customer interactions, supporting repeat purchasing, inventory visibility and account management rather than operating as a separate channel.
Technology-enabled services also expanded during the quarter. MSC reported a 9% increase in its vending machine base and a 13% increase in implant programs compared with a year earlier. Those offerings combine on-site inventory management with real-time usage tracking and automated replenishment and continued to perform well even as demand softened in automotive and heavy truck end markets.
The company also pointed to the growing use of advanced analytics and artificial intelligence across pricing, demand forecasting, inventory planning, and sales prioritization. While MSC did not announce new AI products during the quarter, executives said analytics and automation are now integrated into day-to-day operations rather than treated as pilot initiatives.
Improved execution contributed to higher profitability. Operating income rose to $76.2 million from $72.3 million a year earlier. On an adjusted basis, operating income increased to $81.2 million from $74.6 million. Gross margin for the quarter was 40.7%.
Interim chief financial officer Greg Clark said the company’s performance came near the high end of expectations.
“We delivered year-over-year improvement in profitability and double-digit growth in earnings per share,” Clark said.
Excluding restructuring and other one-time items, MSC reported adjusted net income of $55.5 million, up 14.8% from $48.4 million a year earlier. Adjusted earnings per share increased to $0.99 from $0.86 in the prior-year quarter.
Looking ahead, MSC said it expects sales growth to continue in its fiscal second quarter, though holiday timing has led to a slower start than usual. For the current quarter, the company expects year-over-year daily sales growth of 3.5% to 5.5%.
The distributor reaffirmed its full-year outlook, including planned capital spending of $100 million to $110 million and free cash flow conversion of about 90%. Management said investments will continue to focus on inventory availability, fulfillment operations and digital capabilities while maintaining tight control over expenses.
McIsaac said she remains confident the company can sustain profit growth through fiscal 2026 as execution improvements continue to take hold, even as industrial demand remains uneven.
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