MSC Industrial (MSM) Q1 Earnings & Revenues Miss, Dip Y/Y
MSC Industrial Direct Company, Inc. MSM reported first-quarter fiscal 2024 (ended on Dec 2, 2023) adjusted earnings per share (EPS) of $1.25, missing the Zacks Consensus Estimate of $1.30. The bottom line fell 16% year over year.
Including one-time items, the company reported an EPS of $1.22 compared with the year-ago quarter’s $1.45.
MSC Industrial generated revenues of around $954 million in the quarter under review, down 0.4% from the $958 million reported in the year-ago quarter. The top line missed the Zacks Consensus Estimate of $970 million. Average daily sales declined 0.4% year over year, reflecting soft demand in the quarter. However, the average daily sales were slightly better than the Industrial Production Index.
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
The cost of goods sold increased 0.2% year over year to $561 million. Gross profit was down 1.2% to $393 million. The gross margin was 41.2% compared with the year-ago quarter’s 41.5%.
Operating expenses rose 3.9% year over year to $291 million in the fiscal first quarter. Adjusted operating income amounted to $104 million, down 12.3% from $118 million in the prior-year quarter. The adjusted operating margin was 10.9% in the reported quarter compared with the prior-year quarter’s 12.3%.
The downside was driven by the challenging environment faced during the quarter. However, the negative impacts were partially mitigated or offset by strong strategy execution.
Financial Position
MSC Industrial had cash and cash equivalents of $25.8 million at the end of the fiscal first quarter of 2024 compared with $50 million at the end of fiscal 2023. The company generated a cash flow from operating activities of $81 million in the first quarter of fiscal 2024, reflecting an improvement from $76 million in the first quarter of fiscal 2023.
The company’s long-term debt was $294 million at the end of the reported quarter, up from $224 million at the end of fiscal 2023.
Guidance
MSC Industrial expects average daily sales growth of flat to 5% for fiscal 2024. The adjusted operating margin is expected between 12.0% and 12.8%.
Price Performance
MSC Industrial’s shares have gained 19.9% in the past year compared with the industry’s growth of 22.2%.
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Zacks Rank & Stocks to Consider
MSC Industrial currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the Industrial Products sector are Alarm.com Holdings, Inc. ALRM, Applied Industrial Technologies AIT and A. O. Smith Corporation AOS. ALRM currently sports a Zacks Rank #1 (Strong Buy), and AIT and AOS carry a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Alarm.com’s 2023 earnings per share is pegged at $1.91. The consensus estimate for 2023 earnings has moved north by 3% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 35%. ALRM shares have rallied 16.1% in a year.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2023 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have moved up 2% in the past 60 days. The company’s shares have gained 36.6% in a year.
The Zacks Consensus Estimate for A. O. Smith’s 2023 earnings is pegged at $3.77 per share. The consensus estimate for 2023 earnings has moved 1% north in the past 60 days and suggests year-over-year growth of 20.4%. The company has a trailing four-quarter average earnings surprise of 14%. AOS shares have gained 30.9% in a year.
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A. O. Smith Corporation (AOS) : Free Stock Analysis Report
Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
MSC Industrial Direct Company, Inc. (MSM) : Free Stock Analysis Report
Alarm.com Holdings, Inc. (ALRM) : Free Stock Analysis Report
