MSC Industrial’s fourth quarter results met Wall Street’s revenue expectations and delivered adjusted profits ahead of consensus, but the market reacted negatively, with shares declining after the release. Management attributed performance to continued momentum among core customers, effective sales execution, and price actions that offset volume softness, notably in public sector accounts. CEO Martina McIsaac acknowledged that public sector sales were impacted by the federal government shutdown, while national accounts returned to growth. She noted, “Core customers grew approximately 6% in Q1, buoyed by our initiatives around e-commerce marketing and seller optimization.”
Is now the time to buy MSM? Find out in our full research report (it’s free for active Edge members).
MSC Industrial (MSM) Q4 CY2025 Highlights:
- Revenue: $965.7 million vs analyst estimates of $962.5 million (4% year-on-year growth, in line)
- Adjusted EPS: $0.99 vs analyst estimates of $0.95 (4.8% beat)
- Adjusted EBITDA: $106.3 million vs analyst estimates of $102.5 million (11% margin, 3.7% beat)
- Operating Margin: 7.9%, in line with the same quarter last year
- Organic Revenue rose 3.9% year on year vs analyst estimates of 3.8% growth (12.2 basis point beat)
- Market Capitalization: $4.70 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From MSC Industrial’s Q4 Earnings Call
- Ryan Merkel (William Blair) asked about the sustainability of price increases amid ongoing supplier inflation. CEO Martina McIsaac emphasized the need for further price actions, especially in metalworking, due to rising tungsten costs.
- Ken Newman (KeyBanc) questioned the achievability of 20% incremental margins and mid-single-digit growth. Management cited ongoing productivity initiatives and confidence in core customer momentum but acknowledged visibility remains limited.
- Tommy Moll (Stephens Inc.) sought clarity on recent cost measures and their link to service model changes. McIsaac explained that realignment of customer-facing teams produced headcount benefits and greater cost efficiency.
- Chris Dankert (Loop Capital) probed flat volume trends despite strong pricing. Management attributed cautious guidance to macro uncertainty and the impact of the supplier conference, but expressed confidence in core customer growth.
- David Manthey (Baird) asked why sequential growth and margins would not be higher given price-driven gains and cost cuts. Management noted that holiday timing, fixed costs, and event-related expenses would weigh on near-term results, but expected stronger leverage in the second half.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be watching (1) whether MSC Industrial’s pricing actions in metalworking categories can be sustained without further volume decline, (2) the operational impact and sales momentum generated by the supplier growth forum, and (3) the pace of cost optimization and productivity gains across sales and service teams. Execution on these fronts, along with the company’s ability to navigate supplier-driven inflation, will be crucial for meeting margin and growth targets.
MSC Industrial currently trades at $84.18, in line with $84.94 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
Our Favorite Stocks Right Now
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.