MSC Industrial Shifts to Modular AI Strategy, Ends Digital Core Program

MSC Industrial Direct Co., Inc. is ending its Digital Core program and shifting to smaller, AI-first technology deployments, a move CEO Martina McIsaac expects to lower risk and speed returns.

Discontinuing the program resulted in an asset impairment charge of about $42 million. MSC’s new approach centers on modular technology work and narrower implementations.

The company projected fiscal 2027 first-quarter average daily sales growth of 9.5% to 10.5% year over year and an adjusted operating margin of 9.5% to 10.1%. MSC had included those ranges in its fiscal 2026 fourth-quarter results.

MSC expects first-quarter gross margin to decline slightly more than the usual fourth-to-first-quarter drop of about 10 basis points. Management separately expects adjusted operating expenses to rise slightly from the prior quarter. Material inflation and higher freight and employee costs are expected to pressure gross and operating margins.