Metalworking and MRO supplies distributor MSC Industrial Supply reported its 2024 fiscal third quarter results on July 2, affirming the declines that the company detailed in its preliminary results shared in mid-June.

For its 3Q that spanned March 3 to June 1, MSC posted total sales of $979 million that were down 7.1% year-over-year, with average daily sales down by that same amount.

MSC said the key drivers of the 3Q sales declines were an approximate 300 basis-point headwind from non-recurring public sector orders and ongoing softness in heavy manufacturing verticals.

The company’s 3Q gross margin of 40.9% was up 20 bps year-over-year and down 60 bps sequentially — attributed to issues from MSC’s web price realignment initiative and product mix headwinds.

• Premium: MSC’s Web Pricing Anomalies Expose Omnichannel Icebergs – June 20

MSC’s 3Q operating profit of $107 million was down 21.1% year-over-year, with operating margin of 10.9% down 190 bps year-over-year (-170 bps adjusted). Net profit of $72 million was down 24.7%. On an adjusted basis, operating profit and net profit were down 19.6% and 22.9%, respectively.

“As announced on June 13, we began the second half of our fiscal year with unexpected gross margin pressure and a slower-than-expected recovery in average daily sales, particularly within our core customer base,” MSC Preisdent and CEO Erik Gershwind said in the company’s 3Q earnings release. “As a result, our third quarter performance was below expectations and led to a revised full year outlook. We responded with swift corrective actions to improve gross margin trending and accelerate progress on the rollout of our web enhancements.”

MSC’s preliminary results noted that complexities in the company’s web pricing realignment rollout earlier in 2024 resulted in unexpected price dilution and delays in other digital initiatives. Those issues and MSC’s corrective actions since were detailed in this June 20 MDM Premium piece.

On that front, MSC’s 3Q fiscal presentation noted that the company noted that it saw June gross margin improvement compared to the trough that occurred in April and early May, and that its web pricing realignment is now performing as planned, with no evidence of additional issues. Meanwhile, the company said it continues to make progress on the launch of web enhancements that will begin in the current fiscal 4Q (June 2-Aug. 31).

• MSC Acquires ApTex and Premier Tool Grinding in WI, AZ – June 26

MSC’s 3Q report maintained the fiscal guidance that the company updated in its preliminary release, which substantially was substantially lowered from the previous quarter. MSC lowered its average daily sales projection from the 0% to 5% provided post-2Q to -4.7% to -4.3%, and adjusted operating margin from 12.0%-12.8% to 10.5%-10.7%.

On March 28, MSC announced the acquisition of assets from Knoxville, TN-based Schmitz Manufacturing Research & Technology (SMRT).

The company followed that by announcing a pair of acquisitions on June 28: Waukesha, WI-based ApTex and Goodyear, AZ-based Premier Tool Grinding.

With $4.0 billion in 2023 fiscal revenue, MSC appeared on four of MDM’s 2024 Top Distributors Lists: Industrial Supplies (13th), MRO (6th), Fasteners (4th) and Safety (5th).