MSC Industrial Supply Co., a major distributor of metalworking and MRO (maintenance, repair, and operations) products, reported a 21% drop in third-quarter profit as sales softened and margins narrowed.
For the fiscal third quarter ending May 31, net income fell to $56.8 million from $71.7 million a year earlier. Revenue dipped less than 1% to $971.1 million from $979.4 million. Operating income dropped more sharply, falling 22.5% to $82.7 million, while the company’s profit margin shrank to 8.5% from 10.9% a year ago.
Year-to-date, MSC has generated $2.79 billion in revenue, a 2.7% decline from the $2.87 billion reported in the first nine months of fiscal 2024. Net income for the period is down 30%, falling to $142.8 million from $202.9 million.
CEO Erik Gershwind said the company’s performance met internal expectations and pointed to early gains in its three strategic focus areas: reengaging core customers, expanding service-driven solutions, and improving cost efficiency.
“While we certainly have plenty of room for improvement, we saw early signs of progress,” Gershwind said in a statement.
Chief financial officer Kristen Actis-Grande said average daily sales fell 0.8% from a year ago, but the result was better than anticipated, helped by stable pricing and steady order volumes.
Looking ahead, MSC expects average daily sales to range between a 0.5% decline and 1.5% growth in the fiscal fourth quarter. The company also forecast an adjusted operating margin between 8.5% and 9%.
Gershwind reiterated MSC’s long-term growth targets, including outpacing the industrial production index and expanding margins into the mid-teens.
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