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MSC Industrial (MSM) Earnings Top Estimates in Q1, Up Y/Y
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MSC Industrial Direct Company, Inc.MSM reported first-quarter fiscal 2022 (ended on Dec 3, 2022) adjusted earnings per share (EPS) of $1.48, beating the Zacks Consensus Estimate of $1.46. The bottom line improved 18% year over year on the back of double-digit average daily sales growth and productivity gains from its Mission Critical growth initiatives.
Including one-time items, the company reported EPS of $1.45 compared with the year-ago quarter’s EPS of $1.18.
MSC Industrial generated revenues of around $958 million in the quarter under review, up 13% from $849 million reported in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $948 million. Average daily sales grew 12.9% in the quarter under review.
MSM is delivering top-line growth aided by the ongoing execution of its five growth drivers — solidifying metalworking, leveraging portfolio strength, expanding solutions, growing e-commerce and diversifying customers and end-markets.
MSC Industrial Direct Company, Inc. Price, Consensus and EPS Surprise
The cost of goods sold increased 13% year over year to $560 million. Gross profit was up 13% to $398 million. The gross margin came in at 41.5% compared with the year-ago quarter’s 41.6%.
Adjusted operating expenses rose 9% year over year to $279.5 million during the fiscal first quarter. Adjusted operating income amounted to $118 million, up 23% from $96 million. Adjusted operating margin came in at 12.3% in the reported quarter compared with the prior-year quarter’s 11.3%.
Financial Position
MSC Industrial had cash and cash equivalents of $26 million at the end of the fiscal first quarter of fiscal 2023 compared with $44 million at the end of fiscal 2021. The company generated a cash flow of $76 million from operating activities in the first quarter of fiscal 2023, compared with the prior-year quarter’s cash flow of $58 million.
MSM's long-term debt was $454 million at the end of the fiscal first quarter of 2023, down from $469 million at fiscal 2022-end. MSM repurchased more than 200,000 shares during the quarter at an average purchase price per share of $79.60.
Guidance
MSC Industrial anticipates gross margins to contract by 40 to 70 basis points year over year in fiscal 2023. Average daily sales growth is expected in the range of 5% to 9%. Adjusted operating expense as a percentage of sales is expected to improve in the back half of fiscal 2023. Adjusted operating margin is projected in the range of 12.7% to 13.3% in fiscal 2023.
Price Performance
Image Source: Zacks Investment Research
MSC Industrial’s shares have lost 7.5% in the past year compared with the industry’s 22.0% fall.
Zacks Rank & Stocks to Consider
MSC Industrial currently carries a Zacks Rank #3 (Hold).
KnowBe4’s earnings surprise in the last four quarters was 216.7%, on average. The Zacks Consensus Estimate for the company’s 2022 earnings is pegged at 25 cents, indicating a year-over-year increase of 127.3%. The consensus estimate has moved up 25% in the past 60 days. KNBE’s shares have gained 15.5% in a year.
The Zacks Consensus Estimate for Deere & Company’s fiscal 2023 earnings per share is pegged at $27.83, suggesting an increase of 19.5% from the last year. The consensus estimate moved 5.1% upward in the last 60 days. DE has a trailing four-quarter average earnings surprise of 7.1%. Its shares have increased 10.2% in the last year.
Belden has an average trailing four-quarter earnings surprise of 12%. The Zacks Consensus Estimate for BDC’s 2022 earnings is pegged at $6.33 per share. This indicates a 32.4% increase from the prior-year reported figure. The consensus estimate has been revised 2.1% north in the past 60 days. BDC’s shares gained 16.5% in the last year.
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MSC Industrial (MSM) Earnings Top Estimates in Q1, Up Y/Y
MSC Industrial Direct Company, Inc. MSM reported first-quarter fiscal 2022 (ended on Dec 3, 2022) adjusted earnings per share (EPS) of $1.48, beating the Zacks Consensus Estimate of $1.46. The bottom line improved 18% year over year on the back of double-digit average daily sales growth and productivity gains from its Mission Critical growth initiatives.
Including one-time items, the company reported EPS of $1.45 compared with the year-ago quarter’s EPS of $1.18.
MSC Industrial generated revenues of around $958 million in the quarter under review, up 13% from $849 million reported in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $948 million. Average daily sales grew 12.9% in the quarter under review.
MSM is delivering top-line growth aided by the ongoing execution of its five growth drivers — solidifying metalworking, leveraging portfolio strength, expanding solutions, growing e-commerce and diversifying customers and end-markets.
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 13% year over year to $560 million. Gross profit was up 13% to $398 million. The gross margin came in at 41.5% compared with the year-ago quarter’s 41.6%.
Adjusted operating expenses rose 9% year over year to $279.5 million during the fiscal first quarter. Adjusted operating income amounted to $118 million, up 23% from $96 million. Adjusted operating margin came in at 12.3% in the reported quarter compared with the prior-year quarter’s 11.3%.
Financial Position
MSC Industrial had cash and cash equivalents of $26 million at the end of the fiscal first quarter of fiscal 2023 compared with $44 million at the end of fiscal 2021. The company generated a cash flow of $76 million from operating activities in the first quarter of fiscal 2023, compared with the prior-year quarter’s cash flow of $58 million.
MSM's long-term debt was $454 million at the end of the fiscal first quarter of 2023, down from $469 million at fiscal 2022-end. MSM repurchased more than 200,000 shares during the quarter at an average purchase price per share of $79.60.
Guidance
MSC Industrial anticipates gross margins to contract by 40 to 70 basis points year over year in fiscal 2023. Average daily sales growth is expected in the range of 5% to 9%. Adjusted operating expense as a percentage of sales is expected to improve in the back half of fiscal 2023. Adjusted operating margin is projected in the range of 12.7% to 13.3% in fiscal 2023.
Price Performance
Image Source: Zacks Investment Research
MSC Industrial’s shares have lost 7.5% in the past year compared with the industry’s 22.0% fall.
Zacks Rank & Stocks to Consider
MSC Industrial currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are KnowBe4 , Deere & Company (DE - Free Report) , and Belden (BDC - Free Report) . KNBE sports a Zacks Rank #1 (Strong Buy) at present, while DE and BDC hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
KnowBe4’s earnings surprise in the last four quarters was 216.7%, on average. The Zacks Consensus Estimate for the company’s 2022 earnings is pegged at 25 cents, indicating a year-over-year increase of 127.3%. The consensus estimate has moved up 25% in the past 60 days. KNBE’s shares have gained 15.5% in a year.
The Zacks Consensus Estimate for Deere & Company’s fiscal 2023 earnings per share is pegged at $27.83, suggesting an increase of 19.5% from the last year. The consensus estimate moved 5.1% upward in the last 60 days. DE has a trailing four-quarter average earnings surprise of 7.1%. Its shares have increased 10.2% in the last year.
Belden has an average trailing four-quarter earnings surprise of 12%. The Zacks Consensus Estimate for BDC’s 2022 earnings is pegged at $6.33 per share. This indicates a 32.4% increase from the prior-year reported figure. The consensus estimate has been revised 2.1% north in the past 60 days. BDC’s shares gained 16.5% in the last year.