MSC Industrial Supply Q3 Profit Down, Misses Estimates; Cuts FY24 Outlook

(RTTNews) - MSC Industrial Supply Co. (MSM), a distributor of metalworking and maintenance, repair and operations or MRO products and services, reported Tuesday that its third-quarter net income attributable dropped 24.7 percent to $71.7 million from last year's $95.2 million.

Earnings per share were $1.27, down 25 percent from $1.69 in the prior fiscal year quarter.

Adjusted earnings per share were $1.33, compared to prior year's $1.74. On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $1.34 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales of $979.4 million decreased 7.1 percent from prior year's $1.05 billion, while the Street was looking for $982.22 million.

Looking ahead for fiscal 2024, the company revised its outlook.

Erik Gershwind, President and Chief Executive Officer, said, "... we began the second half of our fiscal year with unexpected gross margin pressure and a slower than expected recovery in average daily sales, particularly within our Core customer base. As a result, our third quarter performance was below expectations and led to a revised full year outlook. We responded with swift corrective actions to improve gross margin trending and accelerate progress on the rollout of our web enhancements."

Adjusted Operating Margin is now expected to be 10.5 percent to 10.7 percent, lower than previously expected margin of 12.0 percent to 12.8 percent.

ADS Growth is now expected to be down 4.3 percent to 4.7 percent, while previous view was for flat to a growth of 5 percent.

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