MSC Industrial Direct (MSM) - 2025 Q2 - Quarterly Results

Financial Performance - Net sales for Q2 FY25 were $891.7 million, a decrease of 4.7% compared to $935.3 million in Q2 FY24[2] - Income from operations was $62.2 million, down 31.7% from $91.2 million in the prior year quarter[2] - Operating margin decreased to 7.0% from 9.7% year-over-year[2] - Net income attributable to MSC was $39.3 million, a decline of 36.4% from $61.8 million in Q2 FY24[2] - Diluted EPS for Q2 FY25 was $0.70, compared to $1.10 in the same quarter last year, reflecting a 36.4% decrease[3] - Average daily sales declined 4.7% year-over-year, but January and February showed improved performance[2] - Gross profit for the twenty-six weeks ended March 1, 2025, was $743.4 million, down 5.0% from $781.7 million in the prior year[14] - Net income attributable to MSC Industrial for the thirteen weeks ended March 1, 2025, was $39.3 million, a decline of 36.6% from $61.8 million in the same period last year[14] - The company reported a diluted net income per share of $0.70 for the thirteen weeks ended March 1, 2025, compared to $1.10 for the same period in 2024[14] - Comprehensive income attributable to MSC Industrial for the twenty-six weeks ended March 1, 2025, was $79.6 million, down from $131.6 million in the prior year[16] - For the twenty-six weeks ended March 2, 2024, net sales reached $1.89 billion, with a gross margin of 41.4%[30] - Operating income for the same period was $192.8 million, with an operating margin of 10.2%[30] - The company reported a net income of $130.7 million for the twenty-six weeks, with diluted earnings per share of $2.32[30] Shareholder Returns - The company returned approximately $60 million to shareholders through dividends and share repurchases during Q2 FY25[2] - The company repurchased $30.5 million of Class A Common Stock during the twenty-six weeks ended March 1, 2025[18] Future Outlook - The outlook for Q3 FY25 anticipates average daily sales growth between -2.0% and 0.0%[4] - MSC aims to achieve long-term objectives of 400 basis points or more of growth above the IP Index and expand operating margins to the mid-teens[2] - The company expects continued growth in net sales and improvements in operating margins in the upcoming quarters[27] - MSC Industrial is focusing on market expansion and new product development to drive future growth[27] Operating Expenses - Operating expenses were $291.2 million, representing 31.1% of sales[28] - Total other expenses for the second quarter were $11.2 million[28] - The company incurred restructuring and other costs of $1.4 million for the thirteen weeks ended March 1, 2025[24] - Restructuring and other costs amounted to $7.1 million for the twenty-six weeks[30] - Total other expense for the thirteen weeks ended March 1, 2025, was $(10.5) million, compared to $(11.2) million in the same period last year[14] Cash Flow - Cash flows from operating activities for the twenty-six weeks ended March 1, 2025, were $156.3 million, slightly down from $159.9 million in the prior year[18] - Cash and cash equivalents at the end of the period were $41.3 million, an increase from $22.2 million at the end of the same period last year[18]