MSC Posts 8% Drop in Q4 Sales; Full-Year Revenue Off by 4.7%

MSC Industrial Supply on Thursday reported final numbers for its 2024 fiscal year, including a nearly 5% decline in sales and a 25% slide in earnings.

The Long Island metalworking and MRO distributor — no. 9 on ID’s 2024 Big 50 list — posted $3.8 billion in full-year sales, a decrease of 4.7% compared to the 2023 fiscal year. The company reported $390 million in annual income from operations and $259 million in net income attributable to MSC, down 19.3% and 24.7%, respectively, while earnings per diluted share came in at $4.58, down 25% from last year’s $6.11 per diluted share. The company’s full-year operating margin fell from 12.1% last year down to 10.2%.

MSC wrapped up the year with $952 million in fourth-quarter sales, down 8% compared to the final quarter last year and the company’s fourth consecutive quarterly drop in year-over-year revenue. MSC officials said the Q4 total included a “roughly 300 basis point headwind” attributed to non-repeating orders from public sector customers.

The company’s full-year revenue decline was in line with MSC’s revised outlook issued in June, which came after a problematic “web price realignment" effort and broader softness in the manufacturing sector.

MSC CEO Erik Gershwind said in a statement that the company made “solid progress” on its web enhancements and other initiatives despite “a challenging macro environment.”

“While headwinds in our end markets continue for now, we are laser-focused on realizing our long-term goals of achieving adjusted operating margin in the mid-teens and driving 400 basis points of growth above the Industrial Production index over the cycle,” Gershwind said.

MSC issued a first-quarter forecast for its new fiscal year, which anticipated a decline in sales of between 4.5% and 5.5% on a daily average basis and an adjusted operating margin of 7% to 7.5%. Its full-year outlook was limited to “certain financial metrics,” including select expenses and free cash flow conversion.

“Near-term visibility remains limited underpinned by uncertainty stemming from the upcoming election and sluggish customer activity levels entering the holiday season,” said MSC Executive Vice President and CFO Kristen Actis-Grande. “However, we witnessed various improvements for the fiscal year that are leading indicators for future profitability and growth.”