MSC Industrial Supply on Wednesday posted a dip in sales and a sharp drop in earnings in its latest fiscal quarter, although company officials noted that the numbers were in line with expectations.
The Long Island metalworking and MRO distributor — no. 9 on ID’s latest Big 50 — reported net sales of $971.1 million during its third quarter, a decline of 0.8% compared to the same three-month window last year.
The company’s gross profit also edged down year-over-year — from $400.4 million in the previous Q3 down to $397.7 million in the latest period — but its income from operations dropped by 22.5% down to $82.7 million over that span.
Net income attributable to MSC fell 20.7% to $56.8 million, and diluted earnings came in at $1.02 per share — a decline of 19.7% compared to last year.
The company’s operating margin dropped from 10.9% to 8.5%.
MSC CFO Kristen Actis-Grande noted that average daily sales came in just ahead of the midpoint of the company’s Q3 outlook, while CEO Erik Gershwind highlighted sequential improvement among core customers in the quarter, along with “continued momentum” in its “high-touch solutions.”
“While we certainly have plenty of room for improvement, we saw early signs of progress in each of our three critical strategic areas of focus — re-energizing the core customer, maintaining momentum in high-touch solutions, and optimizing our cost to serve,” Gershwind said in a statement.
MSC once again issued only a sales and margin outlook for the current quarter — a pattern that began after problems with website and pricing changes led to an unexpected drop in revenues last year. The company anticipates fourth-quarter sales to range between a decline of 0.5% and an increase of 1.5% compared to the previous Q4, as well as an adjusted quarterly operating margin of between 8.5% and 9%.
The company maintained its earlier full-year outlook for “certain financial metrics,” including capital expenditures and free cash flow conversion.
