MSC Industrial (NYSE: MSM) reported stronger-than-expected fiscal Q1 results. Driven by robust top-line performance as well as efficient cost controls, MSM exceeded both earnings and revenue estimates .
MSC Industrial is one of the largest industrial equipment distributors in the United States, distributing metalworking and maintenance, repair and operations, and products and services.
Notably, adjusted earnings of $1.25 per share grew 12.6% year-over-year and beat analysts’ expectations of $1.20 per share. The company reported earnings of $1.11 per share for the prior-year period.
Meanwhile, net sales jumped 9.9% year-over-year to $848.5 million and exceeded consensus estimates of $839.43 million. The revenue growth reflects a surge in average daily sales growth of approximately 500 basis points above the Industrial Production Index.
Furthermore, adjusted operating margin grew 30 bps to 11.3% during the quarter.
Management Weighs In
Looking ahead, CEO Erik Gershwind, stated, “I am encouraged by the recent progress I see in the Company. Looking beyond this fiscal year, we are on track to achieve our goals of growing sales by at least 400 basis points above the Industrial Production Index and returning ROIC to the high-teens by the end of fiscal 2023.”
MSM CFO, Kristen Actis-Grande, stated, “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.”
The Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 2 Buys and 1 Hold. The average MSC Industrial price target of $94.75 implies 13.32% downside potential to current levels.
Bloggers Weigh In
TipRanks data shows that financial blogger opinions are 100% Bullish on MSM stock, compared to a sector average of 67%.