MSC Industrial Direct Co Inc filed its 10-K with the SEC, and its figures are now in our data. Revenue over the twelve months to Q4 2026 was $4.01 billion, which rose 6.4% on the year before. That growth rate was up 2.0 percentage points on the rate a quarter earlier.

What stands out

Net income rose 11.7% over the year while free cash flow fell 6.5%. Reported profit and cash are moving at different speeds.

Growth and profit

The trailing gross margin was 40.9%. The trailing operating margin was 8.0%, down 0.0 percentage points from a year earlier. The trailing net margin was 5.6%. Net income over the twelve months was $222.6 million, which rose 11.7% on the year before.

Cash flow

Operating cash flow over the twelve months was $306.5 million, down 8.2% on the year before. Capital spending was $81.3 million, or 2.0% of revenue. Free cash flow, operating cash flow less capital spending, was $225.2 million, down 6.5% on the year before. Free cash flow was 5.6% of revenue (the free-cash-flow margin), down 0.8 percentage points from a year earlier. The average diluted share count rose 0.2% over the year.

In context

Today’s free-cash-flow margin of 5.6% is higher than 17% of the company’s own past quarterly readings, which have ranged from 2.9% to 15.5%. Today’s operating margin of 8.0% is higher than 0% of the company’s own past quarterly readings, which have ranged from 8.0% to 17.7%. Today’s twelve-month revenue growth rate of 6.4% is higher than 55% of the company’s own past quarterly readings, which have ranged from −6.4% to 19.5%.

Guidance

The company gave its First Quarter Fiscal 2027 guidance for ADS Growth (YoY): 9.5% to 10.5%. The company gave its First Quarter Fiscal 2027 guidance for Adjusted Operating Margin: 9.5% to 10.1%. The company gave its Full-Year Fiscal 2027 guidance for Depreciation and amortization expense: $100.0 million to $105.0 million. The company gave its Full-Year Fiscal 2027 guidance for Capital expenditures: $90.0 million to $100.0 million.

What it means for value

In our model, growth 5 percentage points lower would lower the value by 27.1%, and 5 percentage points higher would raise it by 35.3%. A free-cash-flow margin 1 percentage point lower would lower it by 18.0%.

What to watch

The next filing will show whether the divergence between rising net income and falling free cash flow continues. It will also reveal if the operating margin remains at its current level relative to the company’s historical range. Finally, it will indicate if revenue growth sustains its recent acceleration.