MSC Industrial Direct Company, Inc. (MSM - Free Report) reported earnings per share of $1.03 in second-quarter fiscal 2021 (ended as of Feb 27, 2021), beating the Zacks Consensus Estimate $1.01. The bottom-line figure improved 1% year over year. The company’s Mission Critical program delivered $9 million of savings in the quarter, leading to earnings improvement despite lower revenues.
Including one-time items, the company reported earnings per share of 32 cents in second-quarter fiscal 2021 compared with $1.00 in the year-ago quarter.
MSC Industrial generated revenues of $774 million, down 1.5% from $786 million reported in the year-ago quarter. The top-line figure missed the Zacks Consensus Estimate of $779.7 million. Improvement in sales levels of non-safety and non-janitorial product lines continued through the quarter. Sales of safety and janitorial products grew in the mid-teens. Average daily sales were $12.7 million for the quarter.
Operational Update
Adjusted cost of goods sold decreased 1% year on year to $449 million. Gross profit slipped 2% to $325 million from the year-earlier quarter. Gross margin came in at 42%, flat compared with the year-ago quarter.
Adjusted operating expenses declined 3% year over year to $244 million during the fiscal second quarter. Adjusted operating income in the reported quarter amounted to $80.5 million, reflecting year-over-year growth of 1%. Operating margin came in at 10.4% in the reported quarter compared with the 10.1% in the prior-year quarter.
Financial Position
MSC Industrial had cash and cash equivalents of $20.2 million at the end of the fiscal second quarter compared with the $125 million at the end of fiscal 2020. The company’s long-term debt stood at $462 million at the end of the fiscal second quarter, down from $497 million at the end of fiscal 2020. The company generated cash flow from operating activities of $119 million in the first half of fiscal 2021 compared with $156 million in the prior-year period.
The company’s Mission Critical program has resulted in cumulative savings of $17 million so far in fiscal 2021 and it is on track to meet its goal of $25 million by the end of this year. It has invested around $5 million in growth programs. The company maintains its goal of achieving $90 million to $100 million of gross cost savings through fiscal 2023.
Price Performance
MSC Industrial’s shares have appreciated 41.6% over the past year compared with the industry’s rally of 95.4%.
Zacks Rank & Stocks to Consider
MSC Industrial currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Industrial Products sector are Deere & Company (DE - Free Report) , AGCO Corporation (AGCO - Free Report) and Crown Holdings, Inc. (CCK - Free Report) . While Deere sports a Zacks Rank #1 (Strong Buy), AGCO and Crown Holdings carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Deere has a projected earnings growth rate of 82.5% for fiscal 2021. Over the past year, the company’s shares have soared 155%.
AGCO has an estimated earnings growth rate of 29.9% for the ongoing year. The company’s shares have surged 182% in the past year.
Crown Holdings has an expected earnings growth rate of 16.2% for 2021. The stock has appreciated 69% in a year’s time.
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MSC Industrial Direct Company, Inc. (MSM - Free Report) reported earnings per share of $1.03 in second-quarter fiscal 2021 (ended as of Feb 27, 2021), beating the Zacks Consensus Estimate $1.01. The bottom-line figure improved 1% year over year. The company’s Mission Critical program delivered $9 million of savings in the quarter, leading to earnings improvement despite lower revenues.
Including one-time items, the company reported earnings per share of 32 cents in second-quarter fiscal 2021 compared with $1.00 in the year-ago quarter.
MSC Industrial generated revenues of $774 million, down 1.5% from $786 million reported in the year-ago quarter. The top-line figure missed the Zacks Consensus Estimate of $779.7 million. Improvement in sales levels of non-safety and non-janitorial product lines continued through the quarter. Sales of safety and janitorial products grew in the mid-teens. Average daily sales were $12.7 million for the quarter.
Operational Update
Adjusted cost of goods sold decreased 1% year on year to $449 million. Gross profit slipped 2% to $325 million from the year-earlier quarter. Gross margin came in at 42%, flat compared with the year-ago quarter.
Adjusted operating expenses declined 3% year over year to $244 million during the fiscal second quarter. Adjusted operating income in the reported quarter amounted to $80.5 million, reflecting year-over-year growth of 1%. Operating margin came in at 10.4% in the reported quarter compared with the 10.1% in the prior-year quarter.
Financial Position
MSC Industrial had cash and cash equivalents of $20.2 million at the end of the fiscal second quarter compared with the $125 million at the end of fiscal 2020. The company’s long-term debt stood at $462 million at the end of the fiscal second quarter, down from $497 million at the end of fiscal 2020. The company generated cash flow from operating activities of $119 million in the first half of fiscal 2021 compared with $156 million in the prior-year period.
The company’s Mission Critical program has resulted in cumulative savings of $17 million so far in fiscal 2021 and it is on track to meet its goal of $25 million by the end of this year. It has invested around $5 million in growth programs. The company maintains its goal of achieving $90 million to $100 million of gross cost savings through fiscal 2023.
Price Performance
MSC Industrial’s shares have appreciated 41.6% over the past year compared with the industry’s rally of 95.4%.
Zacks Rank & Stocks to Consider
MSC Industrial currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Industrial Products sector are Deere & Company (DE - Free Report) , AGCO Corporation (AGCO - Free Report) and Crown Holdings, Inc. (CCK - Free Report) . While Deere sports a Zacks Rank #1 (Strong Buy), AGCO and Crown Holdings carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Deere has a projected earnings growth rate of 82.5% for fiscal 2021. Over the past year, the company’s shares have soared 155%.
AGCO has an estimated earnings growth rate of 29.9% for the ongoing year. The company’s shares have surged 182% in the past year.
Crown Holdings has an expected earnings growth rate of 16.2% for 2021. The stock has appreciated 69% in a year’s time.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
Today, Download Marijuana Moneymakers FREE >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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