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Dec 03, 2022
MSC Q1 2023 Earnings Report
MSC Industrial Supply Co. reported first quarter fiscal 2023 results, with strong sales growth and operating margin expansion.
Key Takeaways
MSC Industrial Supply Co. reported a strong start to fiscal 2023, with net sales increasing by 12.9% year-over-year to $957.7 million. The company's diluted EPS was $1.45, compared to $1.18 in the prior year quarter. The company reaffirmed its fiscal 2023 adjusted operating margin guidance range.
Net sales increased by 12.9% year-over-year to $957.7 million.
Average daily sales growth was roughly 9 percentage points above the Industrial Production Index.
Diluted EPS was $1.45, compared to $1.18 in the prior fiscal year quarter.
The company reaffirms its fiscal 2023 adjusted operating margin guidance range.
Forward Guidance
The Company is reaffirming its fiscal 2023 full year adjusted operating margin and ADS outlook that was communicated last quarter and providing key assumptions for the year.
Positive Outlook
- Adjusted Operating Margin 12.7%-13.3%
- ADS Growth (YoY) 5.0%-9.0%
- Gross Margins 40-70 bps YoY contraction
- Depreciation and Amortization Expense $77M-$82M
- Operating Cash Flow Conversion >100%
Challenges Ahead
- Fiscal 2023 includes 6 fewer selling days than fiscal 2022
- Acquisitions expected to dilute gross margins by 30 to 40 bps
- Acquisitions expected to dilute operating margins by ~20 bps
- Low end of ADS range assumes contracting industrial economy; high end assumes a flat industrial economy
Historical Earnings Impact
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Avg. Return Before/After Earnings
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