MSC Industrial Direct Co. Inc. (NYSE: MSM) handed in better-than-expected fiscal fourth-quarter earnings and revenue Thursday, and the headline numbers were driven by the simple stuff: more sales and better profitability.

The industrial supplies distributor reported adjusted earnings of $1.45 per share, beating analysts' estimate of $1.41 and rising 33% from $1.09 a year earlier. Revenue increased 10.3% year over year to $1.079 billion, topping the $1.072 billion consensus estimate.

Strong Fourth-Quarter Sales

Average daily sales, which measure revenue per selling day, rose 8.6% year over year. GAAP diluted earnings per share fell to 85 cents from $1.01 a year earlier, a gap that highlights the difference between reported and adjusted profitability.

MSC Industrial reported $41.8 million in asset impairment and related charges during the quarter, contributing to a 13.6% decline in operating income to $72.8 million. Strip those out, and adjusted operating income rose 30.5% to $117.8 million, while adjusted operating margin expanded to 10.9% from 9.2% a year earlier.

Margins and Cash Flow

MSC Industrial reported an operating margin of 6.7%, compared with an adjusted operating margin of 10.9%.

For fiscal 2026, net sales increased 6.4% to $4.009 billion. Adjusted earnings rose to $4.69 per share from $3.76 in the previous year. The company generated free cash flow equivalent to 102% of net income during the fiscal year, and cash and cash equivalents totaled $65 million as of Aug. 29.

Forecasting More Sales Growth

For the first quarter of fiscal 2027, MSC Industrial expects average daily sales to grow 9.5% to 10.5% year over year, with an adjusted operating margin of 9.5% to 10.1%.

For the full fiscal year, the company projects free cash flow conversion of 80% to 90% and capital expenditures of $90 million to $100 million. It also expects an effective tax rate of 24.5% to 25.5%.

CEO Points to Record Sales and Strong Demand

CEO Martina McIsaac said the company's turnaround efforts are taking hold, pointing to record quarterly sales, its strongest core customer growth in more than three years and improving profitability as evidence that its strategy is gaining traction.

McIsaac added that sales growth during the early part of the fiscal first quarter was running at a low double-digit pace, signaling continued demand momentum.

MSM Price Action: MSC Industrial Direct Co shares were unchanged at $132.82 during premarket trading on Thursday. The stock is trading near its 52-week high of $133.65, according to market data.