Posted December 22, 2021

MSC Q1 sales up 9.9 percent

MSC Industrial Supply reported fiscal 2022 first-quarter sales of $848.5 million, an increase of 9.9 percent from $771.9 million last year.

Net income of $70 million, or $1.25 per diluted share, increased from $61.9 million, or $1.11, in the same quarter last year.

"Our fiscal first quarter was a strong start to the year. Average daily sales grew 9.9 percent as we sustained our market share capture rate by outgrowing the Industrial Production Index by nearly 500 basis points," said Erik Gershwind, president and CEO.

He added that gross margins came in below expectations. "We implemented countermeasures quickly and saw improvement towards the end of the quarter and into December. We expect gross margins to bounce back in our fiscal second quarter and we expect to achieve our goal of keeping gross margins roughly flat for the full year," he said.

Kristen Actis-Grande, executive vice president and chief financial officer, added, "We produced double-digit earnings growth in the first quarter due to strong top line performance and excellent cost controls. Adjusted operating expenses as a percentage of sales dropped 70 basis points year over year fueled by productivity improvements. Our Mission Critical initiatives achieved savings of $10 million and we reinvested $7 million in the quarter. Momentum is building in our business and, as of now, we are trending towards the higher end of our annual operating margin framework. We also see low double-digit ADS growth as a possibility for fiscal 2022. If this happens, operating margins would lift beyond the ranges in our annual operating margin framework."