MSC Industrial (MSM) Earnings & Sales Top Estimates in Q1

MSC Industrial Direct Company, Inc. MSM reported first-quarter fiscal 2022 (ended as of Nov 27, 2021) adjusted earnings per share of $1.25 beating the Zacks Consensus Estimate of $1.18. The bottom-line figure improved 13% year over year on the back of strong top-line performance and its cost control measures. The company’s Mission Critical program delivered savings worth $10 million in the quarter.

Including one-time items, the company reported earnings per share of $1.188 in quarter compared with the year-ago quarter’s 69 cents.

MSC Industrial generated revenues of around $849 million in the quarter under review, up 10% from $772 million reported in the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $837 million. The company delivered average daily sales growth of nearly 500 basis points above the Industrial Production Index.

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

Cost of goods sold increased 11% year over year to $496 million. Gross profit was up 9% to $353 million from the year-earlier quarter. Gross margin came in at 41.6%, down 30 basis points year over year.

Adjusted operating expenses rose 8% year over year to $256.6 million during the fiscal first quarter. Adjusted operating income in the reported quarter amounted to $96 million, up 13% from the prior-year quarter’s $85 million. Operating margin came in at 11.3% in the reported quarter compared with last year quarter’s 11.0%.

Financial Position

MSC Industrial had cash and cash equivalents of $63 million at the end of the fiscal first quarter of 2022 compared with $40 million at the end of fiscal 2021. The company generated cash flow from operating activities of $58 million in the first quarter of fiscal 2022 compared with the prior-year quarter’s $103 million.

The company’s long-term debt was $558 million at the end of the quarter, down from $584 million at fiscal 2021-end.

Price Performance

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MSC Industrial’s shares have fallen 0.5% so far this year compared with the industry’s decline of 39.6%.

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the Industrial Products sector are Greif, Inc. GEF, SPX Flow FLOW and Emerson Electric Co. EMR. While GEF and FLOW currently flaunt a Zacks Rank #1 (Strong Buy), EMR carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Greif has an estimated earnings growth rate of 11.4% for the current year. In the past 30 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 2%.

So far this year, the company’s shares have gained 22.1%. Greif has a trailing four-quarter earnings surprise of 16.8%, on average.

SPX Flow has an expected earnings growth rate of 102% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised upward by 1% in the past 30 days.

SPX Flow’s shares have risen 48.3% year-to-date. FLOW has a trailing four-quarter earnings surprise of 40%, on average.

Emerson Electric has a projected earnings growth rate of 19.9% for 2021. The Zacks Consensus Estimate for current-year earnings has been revised upward by 1% in the past 30 days.

EMR’s shares have appreciated 13.6% so far this year. Emerson Electric has a trailing four-quarter earnings surprise of 10.7%, on average.

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