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Yahoo
a day ago
- Business
- Yahoo
MSC Industrial's (NYSE:MSM) Q2 Earnings Results: Revenue In Line With Expectations
Industrial supplies company MSC Industrial Direct (NYSE:MSM) met Wall Street's revenue expectations in Q2 CY2025, but sales were flat year on year at $971.1 million. Its non-GAAP profit of $1.08 per share was 5.1% above analysts' consensus estimates. Is now the time to buy MSC Industrial? Find out in our full research report. Revenue: $971.1 million vs analyst estimates of $968.5 million (flat year on year, in line) Adjusted EPS: $1.08 vs analyst estimates of $1.03 (5.1% beat) Adjusted EBITDA: $108.8 million vs analyst estimates of $106.6 million (11.2% margin, 2% beat) Operating Margin: 8.5%, down from 10.9% in the same quarter last year Free Cash Flow Margin: 7.8%, down from 11.6% in the same quarter last year Market Capitalization: $4.74 billion Erik Gershwind, Chief Executive Officer, said, "We delivered fiscal third quarter results that were in line with our expectations for both average daily sales and operating margins. While we certainly have plenty of room for improvement, we saw early signs of progress in each of our three critical strategic areas of focus — reenergizing the core customer, maintaining momentum in high-touch solutions, and optimizing our cost to serve." Founded in NYC's Little Italy, MSC Industrial Direct (NYSE:MSM) provides industrial supplies and equipment, offering vast and reliable selection for customers such as contractors A company's long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, MSC Industrial's 2.6% annualized revenue growth over the last five years was sluggish. This fell short of our benchmarks and is a rough starting point for our analysis. We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. MSC Industrial's performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 3.2% annually. MSC Industrial isn't alone in its struggles as the Maintenance and Repair Distributors industry experienced a cyclical downturn, with many similar businesses observing lower sales at this time. This quarter, MSC Industrial's $971.1 million of revenue was flat year on year and in line with Wall Street's estimates. Looking ahead, sell-side analysts expect revenue to grow 2.1% over the next 12 months. While this projection indicates its newer products and services will fuel better top-line performance, it is still below the sector average. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. MSC Industrial's operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 10.6% over the last five years. This profitability was solid for an industrials business and shows it's an efficient company that manages its expenses well. This result isn't surprising as its high gross margin gives it a favorable starting point. Looking at the trend in its profitability, MSC Industrial's operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. In Q2, MSC Industrial generated an operating margin profit margin of 8.5%, down 2.4 percentage points year on year. Since MSC Industrial's operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased. We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. Sadly for MSC Industrial, its EPS declined by 5.6% annually over the last five years while its revenue grew by 2.6%. However, its operating margin didn't change during this time, telling us that non-fundamental factors such as interest and taxes affected its ultimate earnings. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For MSC Industrial, its two-year annual EPS declines of 24.4% show it's continued to underperform. These results were bad no matter how you slice the data. In Q2, MSC Industrial reported EPS at $1.08, down from $1.33 in the same quarter last year. Despite falling year on year, this print beat analysts' estimates by 5.1%. Over the next 12 months, Wall Street expects MSC Industrial's full-year EPS of $3.69 to grow 2.9%. It was encouraging to see MSC Industrial beat analysts' EBITDA and EPS expectations this quarter despite in line revenue. In the quarter, management saw "encouraging data points, such as core customer sequential improvement, continued momentum in our high-touch solutions and a building productivity pipeline." Overall, this print had some key positives. The stock traded up 4.7% to $88.95 immediately after reporting. So do we think MSC Industrial is an attractive buy at the current price? If you're making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
Yahoo
a day ago
- Business
- Yahoo
MSC Industrial stock gains despite Q3 earnings, revenue decline
-- MSC Industrial (NYSE: MSM) shares rose more than 3% in premarket trading on Tuesday after the company reported fiscal third-quarter results that beat earnings expectations despite year-over-year declines in profit and sales. The company posted adjusted earnings per share of $1.08, surpassing the analyst consensus of $1.03. Revenue for the quarter came in at $971.1 million, slightly ahead of expectations for $970.26 million. However, net sales declined 0.8% from the prior year, and adjusted diluted EPS fell 18.8% from $1.33. 'We delivered fiscal third quarter results that were in line with our expectations,' said CEO Erik Gershwind. He added that MSC saw 'early signs of progress' in its efforts to reenergize core customers, grow high-touch solutions, and optimize costs. Operating income was $82.7 million, or $87.2 million on an adjusted basis, while the adjusted operating margin came in at 9.0%, down from 11.4% a year ago. CFO Kristen Actis-Grande noted that the company returned $56 million to shareholders during the quarter through dividends and share repurchases, bringing the year-to-date total to $181 million. For the fourth quarter, MSC expects average daily sales growth of between -0.5% and 1.5% year-over-year. The company also reaffirmed its full-year outlook, including free cash flow conversion of about 120% and capital expenditures of $100 million to $110 million. Related articles MSC Industrial stock gains despite Q3 earnings, revenue decline JPMorgan says Tesla demand weakness likely continued in second quarter BofA adds SAP stock to Top 10 EMEA ideas for Q3
Yahoo
03-04-2025
- Business
- Yahoo
MSC Industrial Delivers Mixed Q2: Sales Slide, EPS Tops Estimates, Outlook Remains Cautious
MSC Industrial Direct Company, Inc. (NYSE:MSM) shares are trading lower premarket on Thursday after the company reported second-quarter financial results. Net sales declined 4.7% year-over-year to $891.7 million, missing the consensus of $899.54 million. Average daily sales declined 4.7% year-over-year. Adjusted gross margin for the quarter was 41.0%, down from 41.5% a year ago. Adjusted operating income for the quarter declined 34.9% to $63.7 million, with an adjusted operating margin of 7.1%, down from 10.5% a year ago. Adjusted EPS of $0.72, down 39.0% Y/Y, topped the consensus of $0.68. As of March 1, the company held $41.276 million in cash and equivalents. Operating cash flow for the six months totaled $156.3 million, down from $159.9 million a year ago. The company returned around $60 million to shareholders in the form of dividends and share repurchases during the second quarter. Erik Gershwind, CEO, noted that the company launched website upgrades and an enhanced marketing campaign. Despite facing a challenging operating environment with industrial demand remaining low, MSC Industrial delivered solid results that fell within its guidance expectations. He further added that the company is concentrating on executing the Mission Critical productivity and growth strategies, which will strengthen MSC's market position and help achieve the long-term goals of delivering at least 400 basis points of growth above the IP Index and expanding operating margins to the mid-teens. Outlook: MSC Industrial expects third-quarter ADS to decline 2%—flat and anticipates an adjusted operating margin of 8.7% – 9.3%. For FY25, the company expects a free cash flow conversion of ~100% and capital expenditures of ~$100 million – $110 million. Investors can gain exposure to the stock via TrueShares Active Yield ETF (NASDAQ:ERNZ) and ALPS O'Shares U.S. Small-Cap Quality Dividend ETF (BATS:OUSM). Price Action: MSM shares are trading lower by 7.09% at $73.66 premarket at the last check Thursday. Image via Shutterstock. UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? MSC INDUSTRIAL DIRECT CO (MSM): Free Stock Analysis Report This article MSC Industrial Delivers Mixed Q2: Sales Slide, EPS Tops Estimates, Outlook Remains Cautious originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
