MSC Industrial Supply on Thursday posted lower-than-expected financial results in its fiscal second quarter, and said that it now expects its full-year totals to be "at the lower end" of its forecast range.
The Long Island-based distributor — no. 9 on ID’s latest Big 50 — reported a decline in both sales and earnings after what company officials called a sluggish start to the quarter and persistent softness in the heavy manufacturing market.
MSC disclosed $935 million in net sales during the second quarter, down 2.7% compared to the same period a year ago. Net income attributable to the company, meanwhile, was off by nearly 22% year-over-year to $62 million, while its operating margin dropped from 11.9% to 9.7% over that span.
The company broadly maintained its previous full-year forecast of flat to 0.5% growth, but Kristen Actis-Grande, the company’s executive vice president and CFO, conceded that a slow first half and current market conditions meant that final fiscal year results would likely skew toward the low end.
Actis-Grande said in a statement that she was encouraged by an improvement in the company’s gross margin, as well as “the strong cash conversion supported by inventory reductions during the quarter.”
Erik Gershwind, the company’s chief executive, also called the first half of the year "mixed," but said that MSC’s efforts to recapture market share should begin to pay dividends in the second half.
“While there are risks to the timing of these benefits, I am confident in their ability to drive growth,” Gershwind said.
On Wednesday, meanwhile, MSC announced that it had acquired intellectual property assets related to manufacturing technology from Schmitz Manufacturing Research & Technology, a pioneer in machining dynamics and mechanical vibrations located in Tennessee. Gershwind said in the announcement that the deal would help advance innovation "across our best-in-class metalworking products and solutions."
Terms of the deal were not disclosed.
