MRO and metalworking supplies distributor MSC Industrial Supply reported double-digit sales growth for the fifth consecutive quarter during its 2023 third-quarter fiscal results, which covered March 4 to June 3 of this year. 

MSC posted 3Q sales of $1,054.5 million, a 10% increase year-over-year, and an increase from 2Q’s $962 million in sales.

President and CEO Erik Gershwind said in the June 29 earnings release that the 3Q sales growth was aided by a robust public sector performance and the execution of several growth initiatives, including diversifying end markets.

“We delivered average daily sales growth of nearly 12% [11.7%] and outperformed the [Industrial Production] index by double digits for the second consecutive quarter,” Gershwind said. “ Looking ahead and despite macro uncertainty, we expect to continue outperforming the IP index as we leverage MSC-specific momentum and strengthen our market position through strategic investments.” 

MSC posted a 3Q gross margin of 40.7%, down from 41.3% in 2Q. 

Operating income of $135.4 million (or $138.6 million adjusted to exclude share reclassification proposal costs and restructuring and other costs), down year-over-year from $136.8 million and up from 2Q’s $114 million.

The company’s 3Q operating margin was 12.8%, down from 14.3% in the same quarter last year. 

Melville, New York-based MSC is the No. 6 MRO distributor, No. 5 fastener distributor and No. 13 industrial distributor on MDM’s 2023 Top Distributors list.

MSC updated its fiscal 2023 full-year outlook, assuming additional mix headwinds related to public sector growth.  The adjusted operating margin is about 12.7%. The company expected to achieve double-digit ADS growth of between 10 and 11% year-over-year. 

“Another quarter of above-market sales growth provides clear evidence that MSC continues to take market share,” said Kristen Actis-Grande, the company’s Executive Vice President and Chief Financial Officer. “This drove meaningful cash generation during the quarter, despite the impact on gross margin from a significant Public Sector contract win and overall customer mix. As a result of our ongoing execution, we are raising fiscal 2023 sales guidance and remain confident in future profitable growth.”

Earlier this month, MSC announced it would reclassify the company’s equity structure, including the elimination of the company’s Class B Common Stock, which is held by the Jacobson/Gershwind family and entities affiliated with the family.

The company also added Ryan Mills as Head of Investor Relations.