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Nov 28, 2020
MSC Q1 2021 Earnings Report
MSC's first quarter of fiscal year 2021 experienced a sales decrease but showed building momentum through strategic initiatives.
Key Takeaways
MSC Industrial Supply Co. reported a decrease in net sales by 6.3% year-over-year, with a net sales of $771.9 million. Diluted EPS was reported at $0.69, with an adjusted diluted EPS of $1.10. The company saw sequential improvement in sales of non-safety and non-janitorial product lines, while sales of safety and janitorial products grew roughly 20%.
Net sales decreased by 6.3% year-over-year, totaling $771.9 million.
Operating income was $53.9 million, or $84.6 million excluding certain charges.
Diluted EPS was $0.69, while adjusted diluted EPS was $1.10.
The company declared a special cash dividend of $3.50 per share on November 17, 2020.
Forward Guidance
MSC Industrial Supply is aiming for significant growth and improved profitability by the end of fiscal year 2023, focusing on outpacing the Industrial Production Index and enhancing operating efficiency.
Positive Outlook
- Targeting growth of at least 400 basis points above the Industrial Production Index by the end of fiscal 2023.
- Aiming to return ROIC back into the high teens by the end of fiscal 2023.
- Executing significant structural cost reductions to improve operating expenses.
- Expecting operating expenses as a percent of sales to improve by at least 200 basis points.
- Momentum is building inside of the company, evidenced by improving operating numbers and an increasing pace of business.
Challenges Ahead
- Uncertainty over securing deliveries of nitrile gloves for which the company prepaid.
- A challenging but improving environment.
- The reported operating margin was significantly impacted by a $26.7 million asset impairment charge.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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