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MSC Industrial (MSM) Q2 Earnings Beat Estimates, Revenues Miss
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MSC Industrial Direct Company, Inc. (MSM - Free Report) reported second-quarter fiscal 2024 (ended on Mar 2, 2024) adjusted earnings per share (EPS) of $1.18, beating the Zacks Consensus Estimate of $1.16. The bottom line decreased 18.6% year over year.
Including one-time items, the company reported EPS of $1.10 compared with the year-ago quarter’s $1.41.
MSC Industrial generated revenues of around $935 million in the quarter under review, down 2.7% from $962 million in the year-ago quarter. The top line missed the Zacks Consensus Estimate of $949 million. Net sales were 290 basis points below the IP Index. Average daily sales fell 2.7% year over year in the quarter.
MSC Industrial Direct Company, Inc. Price, Consensus and EPS Surprise
The cost of goods sold decreased 3.2% year over year to $547 million. Gross profit was down 2% to $389 million. The gross margin was 41.5% compared with the year-ago quarter’s 41.3%.
Operating expenses rose 4% year over year to $291 million in the fiscal second quarter. Adjusted operating income amounted to $98 million, down 16.5% from $117 million in the prior-year quarter. The adjusted operating margin was 10.5% in the reported quarter compared with the prior-year quarter’s 12.2%.
Cash & Debt Position
MSC Industrial had cash and cash equivalents of $22.2 million at the end of the fiscal second quarter of 2024 compared with $50 million at the end of fiscal 2023. It generated cash flow from operating activities of $160 million in the first half of fiscal 2024 compared with $416 million in the first half of fiscal 2023.
The company’s long-term debt was $294 million at the end of the reported quarter, up from $224 million at fiscal 2023-end.
Guidance
Backed by lower-than-expected fiscal second-quarter results, MSC Industrial expects its full-year average daily sales outlook to be at the lower end of its previously provided range. It expected average daily sales to see flat to 5% growth year over year for fiscal 2024 . The adjusted operating margin is expected between 12.0% and 12.8%.
Price Performance
MSC Industrial’s shares have gained 19% in the past year compared with the industry’s growth of 27%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
MSC Industrial currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Proto Labs’ 2024 earnings is pegged at $1.62 per share. The consensus estimate for 2024 earnings has moved 11% north in the past 60 days and suggests year-over-year growth of 1.9%. The company has a trailing four-quarter average earnings surprise of 42.2%. PRLB shares have gained 15.7% in the past year.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings is pegged at $1.15 per share. The consensus estimate for 2024 earnings has moved 6% north in the past 60 days and suggests year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have gained 72% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 43.3% in the past year.
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MSC Industrial (MSM) Q2 Earnings Beat Estimates, Revenues Miss
MSC Industrial Direct Company, Inc. (MSM - Free Report) reported second-quarter fiscal 2024 (ended on Mar 2, 2024) adjusted earnings per share (EPS) of $1.18, beating the Zacks Consensus Estimate of $1.16. The bottom line decreased 18.6% year over year.
Including one-time items, the company reported EPS of $1.10 compared with the year-ago quarter’s $1.41.
MSC Industrial generated revenues of around $935 million in the quarter under review, down 2.7% from $962 million in the year-ago quarter. The top line missed the Zacks Consensus Estimate of $949 million. Net sales were 290 basis points below the IP Index. Average daily sales fell 2.7% year over year in the quarter.
MSC Industrial Direct Company, Inc. Price, Consensus and EPS Surprise
MSC Industrial Direct Company, Inc. price-consensus-eps-surprise-chart | MSC Industrial Direct Company, Inc. Quote
Operational Update
The cost of goods sold decreased 3.2% year over year to $547 million. Gross profit was down 2% to $389 million. The gross margin was 41.5% compared with the year-ago quarter’s 41.3%.
Operating expenses rose 4% year over year to $291 million in the fiscal second quarter. Adjusted operating income amounted to $98 million, down 16.5% from $117 million in the prior-year quarter. The adjusted operating margin was 10.5% in the reported quarter compared with the prior-year quarter’s 12.2%.
Cash & Debt Position
MSC Industrial had cash and cash equivalents of $22.2 million at the end of the fiscal second quarter of 2024 compared with $50 million at the end of fiscal 2023. It generated cash flow from operating activities of $160 million in the first half of fiscal 2024 compared with $416 million in the first half of fiscal 2023.
The company’s long-term debt was $294 million at the end of the reported quarter, up from $224 million at fiscal 2023-end.
Guidance
Backed by lower-than-expected fiscal second-quarter results, MSC Industrial expects its full-year average daily sales outlook to be at the lower end of its previously provided range. It expected average daily sales to see flat to 5% growth year over year for fiscal 2024 . The adjusted operating margin is expected between 12.0% and 12.8%.
Price Performance
MSC Industrial’s shares have gained 19% in the past year compared with the industry’s growth of 27%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
MSC Industrial currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Proto Labs, Inc. (PRLB - Free Report) , Cadre Holdings, Inc. (CDRE - Free Report) and Applied Industrial Technologies (AIT - Free Report) - Research Report). PRLB currently sports a Zacks Rank #1 (Strong Buy), and CDRE and AIT carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Proto Labs’ 2024 earnings is pegged at $1.62 per share. The consensus estimate for 2024 earnings has moved 11% north in the past 60 days and suggests year-over-year growth of 1.9%. The company has a trailing four-quarter average earnings surprise of 42.2%. PRLB shares have gained 15.7% in the past year.
The Zacks Consensus Estimate for Cadre Holdings’ 2024 earnings is pegged at $1.15 per share. The consensus estimate for 2024 earnings has moved 6% north in the past 60 days and suggests year-over-year growth of 16.7%. The company has a trailing four-quarter average earnings surprise of 33%. CDRE shares have gained 72% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 43.3% in the past year.