MSC Industrial Direct Co. (NYSE:MSM) shares declined Wednesday after the industrial distributor reported second-quarter results that fell short of expectations on both earnings and revenue.

Details

The company posted adjusted earnings of 82 cents per share, up 13.9% from a year earlier but below analysts' consensus estimate of 84 cents. Net sales totaled $917.8 million, increasing 2.9% year over year but missing expectations of $931.7 million.

Adjusted operating margin rose to 7.5%, compared with 7.1% in the prior-year period. The company reported cash and cash equivalents of $46.2 million for the quarter.

Outlook

For the third quarter, MSC expects average daily sales growth of 5.0% to 7.0% year over year and an adjusted operating margin between 9.7% and 10.3%. For fiscal 2026, the company projects capital expenditures of $100 million to $110 million and free cash flow conversion of about 90%.

Management Commentary

CEO Martina McIsaac said the company delivered a second straight quarter of operating margin expansion despite weak volumes, with core customer sales outperforming overall results and expected to improve through the year.

CFO Greg Clark noted sales missed expectations, but margins strengthened to 7.5% due to higher gross margins and cost-cutting efforts, with solid incremental margins.

Management remains confident in its strategy, forecasting stronger sales and profitability ahead, including about 6% sales growth and a 10% adjusted operating margin in the third quarter.

MSM Price Action: MSC Industrial Direct shares were down 1.39% at $90.99 at the time of publication on Wednesday, according to Benzinga Pro data.

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