MSC Industrial Direct Co., Inc. | $MSM Stock | Shares Slip After Q3 Revenue Misses Expectations

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MSC Industrial Direct Co., Inc. (NYSE: MSM) 


MSC Industrial Direct shares dipped in early trade on Wednesday, after third-quarter revenue of the Melville, New York-based company missed the estimates of Wall Street analysts.

Despite the revenue miss, chief executive officer Erik Gershwind insisted that manufacturing and margins looked healthy during the quarter ended June 2, 2018. MSC stock was trading at $82.10 after losing $2.78, or 3.28% at 10:40 AM.

MSM Earnings & Outlook

MSC Industrial Direct announced net income of $79.1 million, or $1.39 per share, which was in line with analyst estimate of $1.39. In last year’s third quarter, the company had net income of $62.8 million, or $1.09 per share.

The industrial supplies and tools distributor missed the mark on sales, which came in at $828.3 million, compared with Thompson Reuters estimate of $834.2 million. This compares with $62.8 million, or $1.09 per share, in the year-earlier period.

Looking ahead, the company sees fourth-quarter earnings falling between $1.24 to $1.30 per share on revenue of $829 million to $844 million. Analysts expect fourth-quarter earnings of $1.35 per share on sales of $834.5 million.

MSC Industrial Direct CEO Comments

The manufacturing environment in the third fiscal quarter was healthy, and the pricing environment sustained, with positive price/cost in the quarter. We continued to deliver gross margin stability, and our ongoing productivity efforts resulted in operating margin expansion. This was despite sales growth that was somewhat below my expectations due to the impact of our sales effectiveness initiatives and the related lower sales headcount,” said, president and chief executive officer of MSC, Erik Gershwind.

While our fourth quarter organic growth guidance falls short of my expectations for performance in this environment, I expect a return to more typical organic growth levels after a couple of quarters as we complete our sales force effectiveness initiatives and expand our sales team. As we do so, we will benefit from the leverage inherent in our business model, and we expect to continue achieving our long-term annual incremental margin target range. We will maintain our focus on growing areas that are technical and high-touch, creating a deeper moat around our business. All of these are critical to our long-term success, and I am confident in our ability to deliver,” concluded Gershwind.

MSC Industrial Direct Company Profile

MSC Industrial Direct is engaged in the distribution of various types of metalworking products mainly in the US, UK, and Canada.

The company distributes its products primarily through a network of 12 customer fulfillment centers and 93 branch offices.

Its products consist of tooling components, cutting tools, fasteners, measuring instruments, abrasives, metalworking products, machinery tools, flat stock, raw materials, janitorial and safety supplies, electrical supplies, plumbing supplies, power transmission components, and materials handling products.

The company offers about 1,565,000 stock-keeping units (SKUs) through its online channels, brochures, catalogs, and branches.

It sells its products to manufacturing firms, government agencies, and individual machine shops. MSC Industrial Direct Co., Inc. was founded in 1941 by Sidney Jacobson. Its headquarters are located in Melville, New York. -Reuters