MSC Industrial Direct Q2 Results Surpass Expectations, Clocks 11% Sales Growth

  • MSC Industrial Direct Co Inc MSM reported second-quarter FY22 sales growth of 11.4% year-over-year to $862.5 million, beating the consensus of $855.96 million.
  • Gross margin expanded to 42.5%. Income from operations increased 246.8% Y/Y to $97.2 million, and margin expanded by 770 bps to 11.3%, while adjusted operating margin expanded by 120 bps to 11.6%.
  • Adjusted EPS increased 25.5% Y/Y to $1.29, beating the consensus of $1.22.
  • MSC Industrial generated cash from operating activities YTD of $57.42 million, compared to $118.93 million a year ago.
  • It held cash and equivalents of $41.75 million as of February 26, 2022.
  • The company noted it is already at or above the long-range target of growing sales by at least 400 bps above the Industrial Production Index and well on its way to achieving ROIC in the high-teens by the FY23 end.
  • "Gross margin countermeasures, including a late January price increase, are working well and give us confidence that we can keep gross margins flat or better for full year fiscal 2022 versus fiscal 2021," mentioned CEO Erik Gershwind.
  • Price Action: MSM shares traded higher by 3.85% at $85.81 on the last check Wednesday.
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