Posted January 9, 2020

MSC Q1 sales down slightly

MSC Industrial Supply reported net sales of $823.6 million for the first quarter of fiscal 2020, a 1.0 percent decrease from the same period last year.

Net income of $65.4 million, or $1.18 per share, was down 11.9 percent from $74.2 million, or $1.33, in the first quarter of 2019.

"Softness in industrial demand was broad-based and we continued to see customers and suppliers eliminate shifts and, in some pockets, announce layoffs and restructurings," said Erik Gershwind, president and chief executive officer.

Gershwind attributed much of December's weakness to holiday timing, shutdown schedules, and end of year purchasing decisions by customers. "As it is too early to conclude if underlying trends have worsened, our forecast assumes that January and February follow the typical lift in average daily sales from November. In terms of pricing, we anticipate taking a mid-year price increase towards the end of the quarter as we have seen some continued supplier list price movement," he said.

E-commerce sales were relatively flat for the quarter at $499.9 million, compared to $499.8 million last year.

In a first-quarter conference call with investment analysts, Gershwind noted that he’s less concerned now about increasing ecommerce as a percent of total sales as MSC focuses more on providing vendor-managed inventory and other services as a “mission-critical partner” to manufacturers in its customer base. This will reposition MSC from being a “spot-buy-only supplier to a mission-critical partner to manufacturers” in its customer base, he said.