MSC Industrial Supply on Tuesday reported slightly lower net sales and a double-digit drop in earnings in the first quarter of its new fiscal year.
The Long Island-based metalworking and MRO distributor reported $954 million in sales in the three-month period that ended Dec. 2, down 0.4% from the nearly $958 million posted in the same quarter last year. The company’s income from operations fell 12.4% over that span, from $116 million to $102 million, while net income attributable to MSC slid from $81 million to just shy of $70 million, a drop of 14.7%.
The company’s operating margin fell from 12.1% to 10.6% year-over-year, while diluted earnings dropped by nearly 16% to $1.22 per share.
MSC officials said that sales fell short of internal expectations due to “softening demand” during the latest quarter, but that they remained encouraged by several metrics, including its gross margin, in-plant program growth, and a double-digit rise in vending units. Strong cash generation also enabled the company to repurchase the dilution from a reclassification of its shares during the quarter.
The company — no. 9 on ID's most recent Big 50 list — maintained its earlier outlook for the full fiscal year.
“Our fiscal first quarter results reflect strong execution in a challenging environment,” MSC President and CEO Erik Gershwind said in a statement. “Our team remained focused on executing against the pillars of our updated strategy.”
