MSC Industrial Supply Co. (NYSE: MSM) reported a 41.2% increase in diluted earnings per share for its fiscal 2026 third quarter on July 1, posting EPS of $1.44 compared with $1.02 in the prior year period. The results cover the quarter ended May 30, 2026, for the Melville, New York and Davidson, North Carolina based industrial distributor.
Net sales for the quarter rose 7.8% year over year to $1,047.1 million, up from $971.1 million in the same period of fiscal 2025.
The quarterly sales pace marks a step up from the first nine months of the fiscal year as a whole, in which net sales increased 5% to $2,930.5 million. The third quarter EPS gain also outpaced the 22.4% growth in diluted EPS recorded across the nine-month period.
#Average Daily Sales Exceed the High End of MSC's Outlook
Average daily sales grew 7.8% year over year, above the high end of the company's guidance range, according to Greg Clark, Vice President and Interim Chief Financial Officer. Clark said the improvement was driven by pricing benefits and volumes returning to growth in the quarter.
Income from operations reached $106.7 million, up 29% from $82.7 million in the prior year quarter.
Operating margin came in at 10.2%, compared with 8.5% a year earlier. Clark said this represented 170 basis points of operating margin expansion, or 160 basis points on an adjusted basis, above the higher end of the company's outlook range.
On an adjusted basis, income from operations was $111.2 million, for an adjusted operating margin of 10.6%, up from 9% in the prior year quarter.
Adjusted diluted EPS was $1.43, a 32.4% increase from $1.08 a year ago. Clark said the quarter's incremental operating margin was 32%.
Net income attributable to MSC was $80.4 million, up 41.4% from $56.8 million in the prior year quarter.
"We are fundamentally doing more with less and taking the right steps," Martina McIsaac, President and Chief Executive Officer, MSC Industrial, said in the earnings release. McIsaac said the performance was underpinned by strength in the company's Core Customer segment, which continued to outperform the total company, alongside improvement in National Accounts.
#MSC Projects 6.5% to 8.5% Average Daily Sales Growth in Q4
For the fiscal 2026 fourth quarter, the company projected year-over-year average daily sales growth of 6.5% to 8.5% and an adjusted operating margin of 10% to 10.8%.
MSC maintained its full-year fiscal 2026 outlook for certain financial metrics, including capital expenditures of approximately $90 million and free cash flow conversion of approximately 95%.
The maintained full-year outlook also includes depreciation and amortization expense of approximately $100 million, interest and other expense of approximately $30 million, and a tax rate of 24.5% to 25.5%.
#Nine-Month Net Income Rises 22.3% as Dividend Payments Continue
For the first nine months of fiscal 2026, net income attributable to MSC was $174.7 million, up 22.3% from $142.8 million in the comparable prior year period.
The company generated $225.5 million in net cash from operating activities over the nine-month period and paid $145.8 million in regular cash dividends.
MSC distributes metalworking, maintenance, repair and operations, and production fastener and hardware products across North America, offering approximately 2.5 million products alongside inventory management and supply chain services. The company, which has operated for more than 80 years, employs over 7,000 associates serving customers across industrial end markets.
The company's projections constitute forward-looking statements. MSC said actual results could differ materially due to risks including general economic conditions in its markets, changes to trade policies and tariffs, competitive pricing strategies, supply chain disruptions, and customer credit risk.
McIsaac said there is further room to improve and that she is confident the company's progress will continue, which she noted will be critical in coming quarters as MSC begins to lap stronger benefits from price. Economic conditions, trade policy changes, and competitive pressure remain the key risks to that outlook. The company is scheduled to report fiscal 2026 fourth quarter and full-year results on October 22, 2026.