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MSC Industrial Supply (MSM) seems like it is quietly turning a corner after a prolonged industrial slowdown. With signs of stabilization emerging in its core markets, we wanted to flag the name ahead of its Q4 (Aug) report next month.

• In July, MSM reported Q3 (May) revenue dipped just 0.8% yr/yr to $971.1 mln, marking the best top-line performance in five quarters.
• Core SMB customers (~50% of sales) showed the strongest sequential improvement — a notable shift after years of underperformance.
• ADS declined 0.8% yr/yr in Q3, but jumped 7% sequentially, far outpacing typical seasonal trends.
• Q4 ADS guidance of -0.5% to +1.5% was better than expected, hinting at further stabilization.
• Gross margin hit the high end of guidance, supporting a 190 bps sequential improvement in adjusted operating margin to 9.0%.
• MSM raised prices again post-quarter, following a successful March hike that delivered favorable price/cost dynamics.

Briefing.com Analyst Insight:

While MSM's end markets (auto, fabricated metals) remain sluggish, management's increasingly upbeat tone stands out after nearly two years of industrial malaise. The resurgence in its high-margin SMB base and stronger finish to Q3 are encouraging. It's not a breakout yet — but MSM is setting up as a potential early-cycle recovery story. One to watch heading into the AugQ print. The stock has been trending higher.