MSC Industrial beats Q3 sales and adjusted EPS estimates

Overview

• MSC Industrial fiscal Q3 net sales fell 0.8% year-over-year to $971.1 mln

• Adjusted EPS of $1.08 beat analyst expectations, per LSEG data

• EBIT misses analyst estimates, reflecting operational challenges, per LSEG data

Outlook

• Company expects Q4 average daily sales growth of -0.5% to 1.5%

• MSC Industrial anticipates Q4 adjusted operating margin of 8.5% to 9.0%

• Company maintains full-year depreciation and amortization expense of ~$90M-$95M

• MSC Industrial forecasts full-year capital expenditures of ~$100M-$110M

Result Drivers

• CORE CUSTOMER IMPROVEMENT - Sequential improvement in core customer performance noted, per CEO Erik Gershwind

• HIGH-TOUCH SOLUTIONS - Continued momentum in high-touch solutions driving sales, per CEO Erik Gershwind

• COST OPTIMIZATION - Efforts to optimize cost to serve contributed to operational performance

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the industrial machinery & equipment peer group is "buy."

• Wall Street's median 12-month price target for MSC Industrial Direct Co Inc is $84.00, about 1.2% below its last closing price of $85.02

• The stock recently traded at 22 times the next 12-month earnings vs. a P/E of 20 three months ago

Press Release: ID:nPn4qDpT1a