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2025 ANNUAL REPORT
DEAR SHAREHOLDERS, In fiscal year 2025, we built upon our 85-year legacy and harnessed long-term momentum driven by the continued advancement of our strategic initiatives aimed at driving profitable growth. Against a backdrop of ongoing market volatility, we returned to sales growth exiting the fiscal year as momentum began to build with noticeable improvement in our most profitable customer base, the Core customer. We generated another strong year of cash flow from operations of more than $330 million, representing 169% of net income. This continued strength in cash generation supported our sustained commitment to returning capital to shareholders in the form of dividends and share repurchases totaling approximately $229 million during the fiscal year. We strengthened our position to drive long-term profitable growth following further advancement of the initiatives embedded in our Mission Critical strategy. The largest scope of work was improving our E-commerce experience, which underpinned our efforts in reenergizing the Core customer. We launched our enhanced website entering the second half of the fiscal year which included an improved product discovery platform, a streamlined checkout experience and increased personalization throughout our customers buying journey. Complementing the launch of our website was an enhanced marketing campaign focused on increasing awareness of our website upgrades and our more competitive pricing structure that we introduced towards the end of fiscal year 2024. As a result of these actions, we began to see improving average daily sales trends on the website, which contributed to the Core customer improvement we experienced during the second half of the fiscal year. We also made excellent progress in other key operational areas of the business in fiscal 2025. First, we enhanced seller coverage and effectiveness by leveraging an enhanced data-driven territory model, strengthening our onboarding process, and introducing tools that help our sales team more easily identify untapped opportunities. We quickly began to see the fruits of these endeavors as sales per rep per day trends improved during the second MSC INDUSTRIAL DIRECT CO., INC.
half of the fiscal year. Second, we continued to expand our solutions footprint through further share capture, resulting in 10% growth in our installed vending machine units and 20% growth in the number of In-Plant programs. As this progress was being made throughout the fiscal year, the team also managed to mitigate impacts from a choppy economic environment. This included increased uncertainty in the second half of the fiscal year with the introduction of tariffs, just as our growth initiatives were coming online. However, our team took swift action to mitigate the related impacts while maintaining focus on returning the business back to average daily sales growth. This execution serves as a testament to our culture, which is centered on continuous improvement. I would like to thank the entire team for their dedicated focus and hard work in achieving these results in our fiscal 2025, and that will help fuel the next stage of growth for MSC. I have great confidence in MSC s position, outlook and leadership. It is with this confidence as a backdrop that I announced my plans to retire in January 2026 after 30 years with MSC. NET SALES ($B) DILUTED EARNINGS PER SHARE $4.50 CASH FLOW FROM OPERATIONS AS A PERCENTAGE OF NET INCOME $7.00 $6.00 $4.00 $5.00 $3.50 169% $4.00 $3.00 $3.00 $2.00 $2.50 $1.00 2022 2023 2024 2022 2025 OPERATING INCOME ($M) 2023 2024 2025 CASH FLOW FROM OPERATIONS ($M) $500 $800 $400 $600 $300 $400 $200 $200 $100 229M RETURNED CAPITAL IN FORM OF DIVIDENDENDS AND SHARE REPURCHASES $0 2022 2023 2024 2025 2022 2023 2024 2025 MSC INDUSTRIAL DIRECT CO., INC.
I will be succeeded by Martina McIsaac, our current President and Chief Operating Officer. Since joining MSC three years ago, Martina has systematically taken on increasing responsibility, most recently overseeing the entirety of our day-to-day operations. The operational progress and strategic execution detailed in this letter reflect her leadership and the foundation we ve built together. She partnered with me to navigate the challenging post-COVID environment, brought customer service levels to historic highs, restored growth in our Core customer base, and strengthened our operational effectiveness. With her deep understanding of our business, proven track record of operational excellence, and unwavering commitment to our stakeholders, the Board and I have absolute confidence in Martina s ability to lead MSC forward. Our strategic direction is unchanged, and the Jacobson/Gershwind family s commitment remains strong. I look forward to continuing to serve MSC as non-executive Vice Chair of the Board of Directors alongside Mitchell Jacobson, who will continue as Chairman. Our family remains MSC s largest shareholder, fully aligned with stakeholders in driving long-term value creation. Looking ahead, I remain confident in MSC s position to deliver sustained profitable growth. The disciplined execution of our initiatives throughout fiscal 2025 drove a return to growth in the fourth quarter, and we re entering fiscal 2026 with strong momentum. We are laser focused on executing across our productivity pipeline, which, combined with moderating operating expenses, creates compelling incremental margin opportunity. This positions MSC strongly on the path towards our long-term targets of adjusted operating margin in the mid-teens and delivering 400 basis points of growth above the Industrial Production index over the cycle. In closing, it has been a privilege to serve as MSC s CEO and work alongside our exceptional team throughout many periods of transition and growth. I have tremendous pride in the company we are today and confidence in our continued progress under Martina s leadership. Sincerely, Erik Gershwind Chief Executive Officer MSC INDUSTRIAL DIRECT CO., INC.
FORM 10-K
 • shareholder letter icon 12/11/2025 Letter Continued (Full PDF)
 • stockholder letter icon 12/13/2023 MSM Stockholder Letter
 • stockholder letter icon 12/12/2024 MSM Stockholder Letter
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 • Benford's Law Stocks icon MSM Benford's Law Stock Score = 59


MSM Shareholder/Stockholder Letter Transcript:

2025 ANNUAL REPORT

DEAR SHAREHOLDERS,
In fiscal year 2025, we built upon our 85-year legacy and
harnessed long-term momentum driven by the continued
advancement of our strategic initiatives aimed at driving
profitable growth. Against a backdrop of ongoing market
volatility, we returned to sales growth exiting the fiscal year
as momentum began to build with noticeable improvement
in our most profitable customer base, the Core customer. We
generated another strong year of cash flow from operations of more than
$330 million, representing 169% of net income. This continued strength in
cash generation supported our sustained commitment to returning capital
to shareholders in the form of dividends and share repurchases totaling
approximately $229 million during the fiscal year.
We strengthened our position to drive long-term profitable growth
following further advancement of the initiatives embedded in our Mission
Critical strategy. The largest scope of work was improving our E-commerce
experience, which underpinned our efforts in reenergizing the Core
customer. We launched our enhanced website entering the second half of
the fiscal year which included an improved product discovery platform, a
streamlined checkout experience and increased personalization throughout
our customers    buying journey. Complementing the launch of our website
was an enhanced marketing campaign focused on increasing awareness of
our website upgrades and our more competitive pricing structure that we
introduced towards the end of fiscal year 2024. As a result of these actions,
we began to see improving average daily sales trends on the website, which
contributed to the Core customer improvement we experienced during the
second half of the fiscal year.
We also made excellent progress in other key operational areas of the
business in fiscal 2025. First, we enhanced seller coverage and effectiveness
by leveraging an enhanced data-driven territory model, strengthening our
onboarding process, and introducing tools that help our sales team more
easily identify untapped opportunities. We quickly began to see the fruits of
these endeavors as sales per rep per day trends improved during the second
MSC INDUSTRIAL DIRECT CO., INC.

half of the fiscal year. Second, we continued to expand our solutions footprint
through further share capture, resulting in 10% growth in our installed
vending machine units and 20% growth in the number of In-Plant programs.
As this progress was being made throughout the fiscal year, the team also
managed to mitigate impacts from a choppy economic environment. This
included increased uncertainty in the second half of the fiscal year with the
introduction of tariffs, just as our growth initiatives were coming online.
However, our team took swift action to mitigate the related impacts while
maintaining focus on returning the business back to average daily sales
growth. This execution serves as a testament to our culture, which is centered
on continuous improvement. I would like to thank the entire team for their
dedicated focus and hard work in achieving these results in our fiscal 2025,
and that will help fuel the next stage of growth for MSC.
I have great confidence in MSC   s position, outlook and leadership. It is with
this confidence as a backdrop that I announced my plans to retire in January
2026 after 30 years with MSC.
NET SALES
($B)
DILUTED EARNINGS
PER SHARE
$4.50
CASH FLOW FROM
OPERATIONS AS
A PERCENTAGE OF
NET INCOME
$7.00
$6.00
$4.00
$5.00
$3.50
169%
$4.00
$3.00
$3.00
$2.00
$2.50
$1.00
2022
2023
2024
2022
2025
OPERATING
INCOME ($M)
2023
2024
2025
CASH FLOW FROM
OPERATIONS ($M)
$500
$800
$400
$600
$300
$400
$200
$200
$100
229M
RETURNED CAPITAL
IN FORM OF
DIVIDENDENDS
AND SHARE
REPURCHASES
$0
2022
2023
2024
2025
2022
2023
2024
2025
MSC INDUSTRIAL DIRECT CO., INC.

I will be succeeded by Martina McIsaac, our current President and
Chief Operating Officer. Since joining MSC three years ago, Martina has
systematically taken on increasing responsibility, most recently overseeing
the entirety of our day-to-day operations. The operational progress and
strategic execution detailed in this letter reflect her leadership and the
foundation we   ve built together. She partnered with me to navigate the
challenging post-COVID environment, brought customer service levels to
historic highs, restored growth in our Core customer base, and strengthened
our operational effectiveness.
With her deep understanding of our business, proven track record of operational
excellence, and unwavering commitment to our stakeholders, the Board and I
have absolute confidence in Martina   s ability to lead MSC forward.
Our strategic direction is unchanged, and the Jacobson/Gershwind family   s
commitment remains strong. I look forward to continuing to serve MSC
as non-executive Vice Chair of the Board of Directors alongside Mitchell
Jacobson, who will continue as Chairman. Our family remains MSC   s
largest shareholder, fully aligned with stakeholders in driving long-term
value creation.
Looking ahead, I remain confident in MSC   s position to deliver sustained
profitable growth. The disciplined execution of our initiatives throughout fiscal
2025 drove a return to growth in the fourth quarter, and we   re entering fiscal
2026 with strong momentum. We are laser focused on executing across our
productivity pipeline, which, combined with moderating operating expenses,
creates compelling incremental margin opportunity. This positions MSC
strongly on the path towards our long-term targets of adjusted operating
margin in the mid-teens and delivering 400 basis points of growth above the
Industrial Production index over the cycle.
In closing, it has been a privilege to serve as MSC   s CEO and work alongside
our exceptional team throughout many periods of transition and growth.
I have tremendous pride in the company we are today and confidence in our
continued progress under Martina   s leadership.
Sincerely,
Erik Gershwind
Chief Executive Officer
MSC INDUSTRIAL DIRECT CO., INC.

FORM 10-K



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