Financial Analysis

Acquisitions During the thirteen-week period ended May30, 2026, the Company acquired the remaining 25% noncontrolling interest in each of MSC Industrial Supply, S. de R.L. de C.V. and MSC Import Export LLC, resulting in 100% ownership of these entities. The acquisition eliminates the allocation of future earnings or losses to noncontrolling shareholder. The transaction was completed for nominal consideration. …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Debt Debt at May 30, 2026 and August 30, 2025 consisted of the following: May 30, 2026 August 30, 2025 Amended Revolving Credit Facility $ 85,000 $ 65,000 Uncommitted Credit Facilities 217,000 217,000 Long-Term Note Payable 4,750 4,750 Private Placement Debt: 2.90% Senior Notes, Series B, due July 28, 2026 100,000 100,000 2.60% Senior Notes, due March 5, 2027 50,000 50,000 5.73% Senior Notes, due April 18, 2027 50,000 50,000 Financing arrangements 760 38 Obligations under finance leases 541 450 Less: unamortized debt issuance costs (1,277) (1,539) Total debt, including obligations under finance leases $ 506,774 $ 485,699 Less: current portion (417,219) (1) (316,868) (2) Total long-term debt, including obligations under finance leases $ 89,555 $ 168,831 (1) Consists of $217,000 from the Uncommitted Credit Facilities (as defined below), $100,000 from the 2.90% Senior Notes, Series B, due July 28, 2026 , $50,000 from the 2.60% Senior Notes, Series B, due March 5, 2027, $50,000 from the 5.73% Senior Notes, Series B, due April 18, 2027, $383 from financing arrangements, $180 from obligations under finance leases and net of unamortized debt issuance costs of $344 expected to be amortized in the next 12 months. (2) Consists of $217,000 from the Uncommitted Credit Facilities (as defined below), $100,000 from the 2.90% Senior Notes, Series B, due July 28, 2026, $17 from financing arrangements, $200 from obligations under finance leases and net of unamortized debt issuance costs of $34 …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table presents the Companys percentage of revenue by customer end-market for the thirteen- and thirty-nine-week periods ended May 30, 2026 and May 31, 2025: Thirteen Weeks Ended Thirty-Nine Weeks Ended May 30, 2026 May 31, 2025 May 30, 2026 May 31, 2025 Manufacturing Heavy 58 % 58 % 58 % 58 % Manufacturing Light 9 % 9 % 9 % 9 % Public Sector 9 % 9 % 9 % 9 % Retail/Wholesale 7 % 7 % 7 % 7 % Commercial Services 4 % 5 % 4 % 5 % Other (1) 13 % 12 % 13 % 12 % Total 100 % 100 % 100 % 100 % (1) The Other category primarily makes up specific industry classifications that do not individually exceed 3% of net sales. The following table presents the Companys percentage of revenue by customer type for the thirteen- and thirty-nine-week periods ended May 30, 2026 and May 31, 2025: Thirteen Weeks Ended Thirty-Nine Weeks Ended May 30, 2026 May 31, 2025 May 30, 2026 May 31, 2025 National Account Customers 36 % 37 % 36 % 37 % Public Sector Customers 9 % 9 % 9 % 9 % Core and Other Customers 55 % 54 % 55 % 54 % Total 100 % 100 % 100 % 100 % The Companys revenue originating from the following geographic areas was as follows for the thirteen- and thirty-nine-week periods ended May 30, 2026 and May 31, 2025: Thirteen Weeks Ended Thirty-Nine Weeks Ended May 30, 2026 May 31, 2025 May 30, 2026 March 31, 2025 United States 95 % 95 % 95 % 95 % Mexico 1 % 2 % 1 % 2 % Canada 2 % 2 % 2 % 2 % North America 98 % 99 % 98 % 99 % Other foreign countries 2 % 1 % 2 % 1 % Total 100 % 100 % 100 % 100 …

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Stock-Based Compensation The Company accounts for all stock-based payments in accordance with Accounting Standards Codification Topic 718, CompensationStock Compensation, as amended. Stock-based compensation expense included in Operating expenses for the thirteen- and thirty-nine-week periods ended May 30, 2026 and May 31, 2025 was as follows: Thirteen Weeks Ended Thirty-Nine Weeks Ended May 30, 2026 May 31, 2025 May 30, 2026 May 31, 2025 Stock-based compensation expense (1) $ 5,095 $ 3,205 $ 14,423 $ 10,397 Deferred income tax benefit (1,249) (778) (3,534) (2,537) Stock-based compensation expense, net $ 3,846 $ 2,427 $ 10,889 $ 7,860 (1) Includes equity award acceleration costs associated with associate severance and separation, which are included in Restructuring and other costs in the unaudited Condensed Consolidated Statements of Income for the thirty-nine-week period ended May 30, 2026 and for the thirteen- and thirty-nine-week periods ended May 31, 2025. See Note 10, Restructuring and Other Costs for additional information. Restricted Stock Units and Performance Share Units The Company grants restricted stock units (RSUs) and performance share units (PSUs) as part of its long-term stock-based compensation program. RSUs vest over four-years or five-years, depending on the position of the associate, and PSUs cliff vest after a three-year performance period based on the achievement of specific performance goals as set forth in the applicable award agreement. Based on the e …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Fair Value Fair value accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The below fair value hierarchy prioritizes the inputs used to measure fair value into three levels, with Level 1 being of the highest priority. The three levels of inputs used to measure fair value are as follows: Level 1 Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 Include other inputs that are directly or indirectly observable in the marketplace. Level 3 Unobservable inputs which are supported by little or no market activity. The Companys financial instruments include cash and cash equivalents, accounts receivable, accounts payable and outstanding indebtedness. Cash and cash equivalents include investments in a money market fund which are reported at fair value. The fair value of money market funds is determined using quoted prices for identical investments in active markets, which are considered to be Level 1 inputs within the fair value hierarchy. The Company uses a market approach to determine the fair value of its debt instruments, utilizing quoted prices in active markets, interest rates and other relevant information generated by market transactions involving similar instruments. Therefore, the inputs used to measure the fair value of the Companys debt instruments are clas …

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Income Taxes The Companys effective tax rate was 24.5% for the thirty-nine-week periods ended May 30, 2026, as compared to 24.4% for the thirty-nine-week period ended May 31, 2025. The effective tax rate is higher than the federal statutory tax rate primarily due to state taxes. During the third quarter of fiscal year 2026, the Company recognized $5,129 of Employee Retention Credit (ERC) claims to Other income (expense) in the Condensed Consolidated Statement of Income as the relevant statute of limitations lapsed. As of May 30, 2026, no ERC funds remain accrued in the Condensed Consolidated Balance Sheet. In July 2025, the One Big Beautiful Bill Act (OBBBA) was passed in the United States. This act introduces significant changes to United States federal tax law, including making certain provisions of the Tax Cuts and Jobs Act of 2017 permanent and introducing new measures impacting corporate taxation. The OBBBA contains a number of tax provisions including, but not limited to, immediate expensing of domestic research and experimental expenditures and bonus depreciation modifications. These tax provisions apply to our fiscal year 2025 and future periods. The Company is in the process of analyzing its tax elections under the OBBBA however we do not expect these elections to have a material impact on the fiscal year 2026 effective tax rate. During the thirty-nine-week period ended May 30, 2026, there were no material changes in unrecognized tax benefits. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Legal Proceedings In the ordinary course of business, there are various claims, lawsuits and pending actions against the Company incidental to the operation of its business. Management evaluates such matters and records a liability when a loss is both probable and the amount of the loss is reasonably estimable. Although the outcome of these matters, both individually and in aggregate, is currently not determinable, the Company does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Companys consolidated financial position, results of operations or liquidity. In addition to the matters set forth above, on March 14, 2025, a complaint was filed in the Supreme Court of the State of New York, County of New York by Macomb County Retiree Health Care Fund (MCRHC) against the Company and certain officers, directors and shareholders of the Company (the Macomb Litigation). In June 2025, MCRHC filed an amended complaint. The amended complaint alleges, among other things, breaches of fiduciary duties for actions related to the Reclassification and seeks damages, recovery of costs and expenses and such other relief as the court may deem proper. On November 14, 2025, the Company's motion to dismiss the amended complaint was denied. On February 20, 2026, the Company filed an appeal of the trial courts decision with respect to the Companys motion to dismiss. We have incurred, and may be required in the future to incur further, legal fees and …

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Accounting Standards Not Yet Adopted In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures. The ASU primarily enhances and expands both the income tax rate reconciliation disclosure and the income taxes paid disclosure. The ASU is effective for annual periods beginning after December 15, 2024 (MSCs fiscal year 2026) on a prospective basis. The adoption of this guidance is not expected to affect the Companys Consolidated Financial Statements and the Company is currently evaluating the standard to determine the impact of adoption on its disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires public entities to include more detailed disclosures about specific categories of expenses such as inventory purchases, employee compensation, depreciation, amortization and selling costs within the notes to the financial statements. The ASU is effective for fiscal year periods beginning after December 15, 2026 (MSCs fiscal year 2028) and interim periods within fiscal years beginning after December 15, 2027 (MSCs first quarter of fiscal year 2029), with early adoption permitted. The adoption of this guidance is not expecte …

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Restructuring and Other Costs Optimization of Company Operations, Profitability Improvement and Growth Acceleration The Company continues to identify opportunities for improvements in its workforce realignment, strategy and staffing, and its focus on performance management, to ensure it has the right skill sets and number of associates to execute its long-term vision. As such, from time to time the Company extends voluntary and involuntary severance and separation benefits to certain associates in order to facilitate its workforce realignment. During the thirty-nine weeks ended May 30, 2026, the Company reduced its headcount by eliminating various positions as part of its sales optimization efforts as the Company implements its refreshed go to market strategy. Workforce realignment actions related to this restructuring event were complete as of the end of the Companys fiscal second quarter. During the thirty-nine weeks ended May 31, 2025, the Company reduced its headcount by eliminating various positions to optimize its cost structure and improve operational efficiency. As part of the Companys strategic realignment efforts to optimize its supply chain and distribution network and enhance operational efficiency, the Company engaged consultants beginning in fiscal year 2024 and ending in fiscal year 2025. As such, the Company incurred consulting-related costs in order to facilitate its network optimization and workforce realignment that qualify as exit and disposal costs under …

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Revenue Revenue Recognition Net sales include product revenue and shipping and handling charges, net of estimated sales returns and any related sales incentives. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. All revenue is recognized when the Company satisfies its performance obligations under the contract, which is determined to occur when the customer obtains control of the products, and invoicing occurs at approximately the same point in time. The Companys product sales have standard payment terms that do not exceed one year. The Company considers shipping and handling as activities to fulfill its performance obligations. Substantially all of the Companys contracts have a single performance obligation, to deliver products, and are short-term in nature. The Company estimates product returns based on historical return rates. Total accrued sales returns were $6,329 and $7,089 as of May 30, 2026 and August 30, 2025, respectively, and are reported as Accrued expenses and other current liabilities in the unaudited Condensed Consolidated Balance Sheets. Sales taxes and value-added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales. Consideration Payable to Customers The Company offers customers sales incentives, which primarily consist of volume rebates, and upfront sign-on paym …

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"Segment Reporting The Company operates in one operating and reportable segment which aligns with the Companys go to market strategy as a leading North American distributor of a broad range of industrial products and services. The Company serves a large number of customers in diverse industries through the sale of products and services in categories such as metalworking, MRO, Class C Consumables and OEM. Substantially all of the Company's revenues and long-lived assets are from or in the United States. In accordance with FASB ASU 2023-07, operating segments are sections of the business with separate financial information that is regularly reviewed by the chief operating decision maker (""CODM"") in assessing company performance and allocation of resources. As of May 30, 2026, the Company's CODM is the President & Chief Executive Officer. The CODM regularly reviews consolidated operating margin and net income to assess Company performance, drive growth, and allocate resources to strategic priorities. The CODM reviews total assets at the consolidated level to make significant capital expenditure decisions for the Company. The following table presents selected financial information regarding the Company's single reportable segment for the thirteen- and thirty-nine-week periods ended May 30, 2026 and May 31, 2025: Thirteen Weeks Ended Thirty-Nine Weeks Ended May 30, 2026 May 31, 2025 May 30, 2026 May 31, 2025 Net sales $ 1,047,083 $ 971,145 $ 2,930,541 $ 2,791,346 Cost of goo …

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Shareholders Equity Common Stock Repurchases and Treasury Stock In June 2021, the Board of Directors of the Company (the Board) terminated the existing share repurchase plan and authorized a new share repurchase plan (the Share Repurchase Plan) to purchase up to 5,000 shares of Class A Common Stock. There is no expiration date for the Share Repurchase Plan. As of May 30, 2026, the maximum number of shares of Class A Common Stock that were available for repurchase under the Share Repurchase Plan was 1,313 shares. The Share Repurchase Plan allows the Company to repurchase shares at any time and in any increments it deems appropriate in accordance with Rule 10b-18 under the Exchange Act. During the thirteen- and thirty-nine-week periods ended May 30, 2026 , the Company repurchased 2 shares and 162 shares, respectively, of Class A Common stock for $171 and $13,894, respectively. From these totals, 2 shares and 62 shares, respectively, were repurchased by the Company to satisfy the Companys associates tax withholding liability associated with its stock-based compensation program and are reflected at cost as treasury stock in the unaudited Condensed Consolidated Financial Statements for the thirteen- and thirty-nine-week periods ended May 30, 2026 and the remainder were immediately retired. During the thirteen- and thirty-nine-week periods ended May 31, 2025 , the Company repurchased 117 shares and 494 shares, respectively, of Class A Common Stock for $8,597 and $39,138, respective …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing