MSC Industrial Supply Co. (NYSE: MSM), a distributor specializing in metalworking and maintenance, repair, and operations (MRO) products and services, released its financial results for the third quarter on Tuesday. The company reported a 24.7% decline in net income attributable to shareholders, which fell to $71.7 million from $95.2 million in the same period last year.
Earnings per share (EPS) dropped by 25%, coming in at $1.27 compared to $1.69 in the corresponding quarter of the previous fiscal year.
On an adjusted basis, EPS stood at $1.33, down from $1.74 a year earlier. Analysts, on average, expected earnings of $1.34 per share, according to data compiled by Thomson Reuters. These estimates typically exclude special items.
The company's net sales experienced a decline of 7.1%, amounting to $979.4 million, down from $1.05 billion in the previous year. This fell slightly short of the market consensus of $982.22 million.
Looking ahead to fiscal 2024, MSC Industrial Supply revised its financial outlook.
Erik Gershwind, the President and Chief Executive Officer, commented, “As we entered the second half of our fiscal year, we faced unexpected gross margin pressures and a slower-than-anticipated recovery in average daily sales, particularly among our Core customers. Consequently, our third-quarter performance did not meet expectations, prompting us to revise our full-year outlook. In response, we have taken swift corrective measures to improve gross margin trends and expedite the rollout of our web enhancements.”
The company now projects an Adjusted Operating Margin in the range of 10.5% to 10.7%, down from the previously anticipated range of 12.0% to 12.8%.
ADS Growth is forecasted to decline by 4.3% to 4.7%, a revision from the earlier outlook of flat to 5% growth.
