MSC Industrial Direct (MSM) - 2025 Q4 - Annual Results

Financial Performance - Net sales for Q4 FY25 were $978.2 million, an increase of 2.7% year-over-year, while full-year net sales decreased by 1.3% to $3,769.5 million[2]. - Operating income for Q4 FY25 was $84.3 million, with an adjusted operating income of $90.3 million, reflecting a decrease of 7.3% year-over-year[3]. - The operating margin for Q4 FY25 was 8.6%, compared to 9.5% in the prior year, while the adjusted operating margin was 9.2% versus 9.9%[3]. - Diluted EPS for Q4 FY25 was $1.01, up from $0.99 in the prior year, with adjusted diluted EPS increasing to $1.09 from $1.03[3]. - The company reported a decrease in net income attributable to MSC for FY25, totaling $199.3 million, down 22.9% from the previous fiscal year[2]. - Net sales for the fiscal year ended August 30, 2025, were $3,769,521, a decrease of 1.3% compared to $3,820,951 for the fiscal year ended August 31, 2024[15]. - Gross profit for the fiscal year ended August 30, 2025, was $1,536,135, down from $1,572,783 in the previous year, reflecting a gross margin of approximately 40.7%[15]. - Net income attributable to MSC Industrial for the fiscal year ended August 30, 2025, was $199,328, a decrease of 22.9% from $258,594 in the prior year[15]. - Net income for the fiscal year ended August 30, 2025, was $197,836,000, compared to $255,957,000 for the previous year, reflecting a decrease of 22.7%[31]. Cash Flow and Dividends - Free cash flow conversion for FY25 was 122% of net income, exceeding the annual target[4]. - MSC returned approximately $229 million to shareholders through dividends and share repurchases during the fiscal year[4]. - The company paid cash dividends totaling $189,650 during the fiscal year ended August 30, 2025, compared to $187,280 in the previous year[19]. - Free cash flow for the fiscal quarter ended August 30, 2025, was $58,525,000, down from $81,211,000 in the same quarter of the previous year[27]. - The company reported a free cash flow conversion of 104% for the fiscal quarter ended August 30, 2025, compared to 151% in the previous year[27]. Future Outlook - The company plans for first quarter FY26 average daily sales growth of 3.5% to 4.5% and an adjusted operating margin of 8.0% to 8.6%[4]. - The company aims to restore performance consistent with long-term objectives of growing to 400 basis points or more above the IP Index and expanding adjusted operating margins to the mid-teens[4]. Balance Sheet and Liabilities - Cash and cash equivalents increased to $56,228 as of August 30, 2025, compared to $29,588 at the end of the previous fiscal year[19]. - Total current liabilities rose to $729,346 as of August 30, 2025, up from $605,427 a year earlier, indicating increased short-term financial obligations[15]. - Total liabilities increased slightly to $1,065,562 as of August 30, 2025, from $1,061,031 a year earlier, reflecting stable leverage[15]. - The company reported a net cash provided by operating activities of $333,717 for the fiscal year ended August 30, 2025, compared to $410,696 in the previous year[19]. - Free cash flow for the fiscal year ended August 30, 2025, was impacted by capital expenditures of $92,840, compared to $99,406 in the prior year[19]. - The company incurred restructuring and other costs of $10,999 for the fiscal year ended August 30, 2025, down from $14,526 in the previous year[15]. Operating Performance - Average daily sales improved by 2.7% compared to the prior year, indicating a positive trend in sales performance[4]. - Operating expenses as a percentage of sales for the fiscal quarter ended August 30, 2025, were 31.3%, slightly improved from 31.2% in the previous year[29]. - Operating cash flow conversion for the fiscal quarter ended August 30, 2025, was 143%, compared to 199% in the previous year[27]. - Total other expense for the fiscal year ended August 30, 2025, was $(37,985,000), consistent with the previous year[31].