Overview

• US industrial distributor's fiscal Q3 sales rose 7.8%, beating analyst expectations

• Adjusted diluted EPS for fiscal Q3 beat consensus

• Company cites core customer strength and margin expansion as drivers of improved results

Outlook

• Company expects Q4 average daily sales growth of 6.5% to 8.5% YoY

• MSC Industrial sees Q4 adjusted operating margin between 10.0% and 10.8%

• Company maintains full-year outlook for depreciation, interest expense, capex, free cash flow conversion, and tax rate

Result Drivers

• PRICE AND VOLUME GROWTH - Co said Q3 sales growth was driven by benefits from price and volumes returning to growth

• CORE CUSTOMER STRENGTH - Management cited continued outperformance in the core customer segment as a key driver

• OPERATING MARGIN EXPANSION - Higher operating margin contributed to EPS growth, supported by strategic initiatives and cost structure improvements

Company press release: ID:nACS10BjSa

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q3 Sales	Beat	$1.05 bln	$1.03 bln (9 Analysts)
Q3 Adjusted EPS	Beat	$1.43	$1.27 (9 Analysts)
Q3 EPS		$1.44
Q3 EBIT		$106.70 mln
Q3 EBIT Margin		10.20%

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 6 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the industrial machinery & equipment peer group is "buy."

• Wall Street's median 12-month price target for Msc Industrial Direct Co., Inc is $95.00, about 20.1% below its June 30 closing price of $118.95

• The stock recently traded at 25 times the next 12-month earnings vs. a P/E of 20 three months ago

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