MSC Industrial Direct (US:MSM)2025-10-23 12:30Financial Performance - Q4 2025 - Net sales increased from $952.3 million in Q4 2024 to $978.2 million in Q4 2025[8], but gross margin decreased by 60 bps year-over-year[6, 16] - Reported operating profit decreased from $90.9 million in Q4 2024 to $84.3 million in Q4 2025, while adjusted operating profit decreased from $94.2 million to $90.3 million[12] - Reported earnings per diluted share increased slightly from $0.99 in Q4 2024 to $1.00 in Q4 2025, and adjusted earnings per diluted share increased from $1.03 to $1.09[14] Financial Performance - FY 2025 - Net sales decreased from $3.821 billion in FY 2024 to $3.7695 billion in FY 2025[22], with a 1.3% decline in average daily sales[6, 29] - Reported operating profit decreased from $390.4 million in FY 2024 to $301.6 million in FY 2025, and adjusted operating profit decreased from $407.2 million to $315.8 million[25] - Reported earnings per diluted share decreased from $4.58 in FY 2024 to $3.57 in FY 2025, and adjusted earnings per diluted share decreased from $4.81 to $3.76[27] - Free cash flow reached $241 million in FY 2025, representing 122% of net income[6] Sales and Customer Segments - Average daily sales grew by 2.7% year-over-year in Q4 2025, driven by growth initiatives and price increases[6, 16] - Average daily sales for Core and Other Customers increased by 4.1% year-over-year in Q4 2025[6] - Sales to customers with an In-Plant program increased by 11% in Q4 2025, representing 20% of total sales[16] - Sales through vending machines increased by 10% in Q4 2025, representing 19% of total sales[16] Capital Allocation - The company repurchased approximately 496,000 shares in FY 2025 and returned approximately $229 million to shareholders through dividends and share repurchases[6] - Net debt decreased by approximately $50 million, resulting in a net debt to EBITDA ratio of 1.10x[36] Outlook - The company expects average daily sales to increase by 3.5% to 4.5% year-over-year in Q1 2026[55] - Adjusted operating margin is expected to be between 8.0% and 8.6% in Q1 2026[55]