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MSC Industrial (MSM) Earnings & Sales Top Estimates in Q3

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MSC Industrial Direct Company, Inc. MSM reported adjusted earnings per share of $1.42 in third-quarter fiscal 2021 (ended as of May 29, 2021), beating the Zacks Consensus Estimate of $1.37. The bottom-line figure remained flat, year over year.

Including one-time items, the company reported earnings per share of $1.68 in third-quarter fiscal 2021 compared with the year-ago quarter’s $1.40. The company’s Mission Critical program delivered $12 million of savings in the quarter, leading to improvement in earnings.

MSC Industrial generated revenues of $866.3 million, up 3.8% from the $835 million reported in the year-ago quarter. The top-line figure surpassed the Zacks Consensus Estimate of $847.8 million. Sales of non-safety and non-janitorial product lines rose 21% during the quarter.

MSC Industrial Direct Company, Inc. Price, Consensus and EPS Surprise

MSC Industrial Direct Company, Inc. Price, Consensus and EPS Surprise
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

Adjusted cost of goods sold increased 4% year over year to $499.8 million. Gross profit was up 3.4% to $366.5 million from the year-earlier quarter. Gross margin came in at 42.3%, flat year over year.

Adjusted operating expenses flared up 5.7% year over year to $257 million during the fiscal third quarter. Adjusted operating income in the reported quarter amounted to $109.5 million compared with the prior-year quarter’s $111.2 million. Operating margin came in at 12.6% in the reported quarter compared with last year’s 13.3%.

Financial Position

MSC Industrial had cash and cash equivalents of $27.4 million at the end of the fiscal third quarter compared with $125 million at the end of fiscal 2020. The company’s long-term debt stood at $346.5 million at the end of the fiscal third quarter, down from $497 million at fiscal 2020-end. The company generated cash flow from operating activities of $139 million at the end of the first nine months of fiscal 2021 compared with the prior-year period’s $215 million. It repurchased 507,000 shares during the fiscal third quarter.

The company’s Mission Critical program has resulted in cumulative savings of $29 million so far in fiscal 2021, more than its original goal of $25 million. It has reinvested around $7 million in growth programs, which brings total investment of roughly $15 million for fiscal 2021. The company now expects to drive gross savings of $40 million and invest $25 million in fiscal 2021.
Strong execution of Mission Critical initiatives will support the company’s share-repurchase programs and deliver additional savings over the long term.

Price Performance

MSC Industrial’s shares have gained 10.3% so far this year as against the industry’s decline of 0.8%.

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Zacks Rank & Stocks to Consider

MSC Industrial currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the Industrial Products sector are Greif, Inc. GEF, Lindsay Corporation LNN and Pentair plc PNR. All of these stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Greif has an anticipated earnings growth rate of 47.2% for fiscal 2021. The company’s shares have gained around 29.3%, year to date.

Lindsay has an estimated earnings growth rate of 1% for the ongoing fiscal year. Year to date, the company’s shares have rallied 29.1%.

Pentair has a projected earnings growth rate of 26% for the current year. The stock has appreciated around 29%, so far this year.

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Greif, Inc. (GEF) : Free Stock Analysis Report

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