MSC Industrial Direct (MSM) - 2025 Q3 - Quarterly Results

Financial Performance - Net sales for Q3 FY25 were $971.1 million, a decrease of 0.8% year-over-year[2]. - Operating income was $82.7 million, down 22.5% from the previous year, with an adjusted operating income of $87.2 million[2][3]. - Operating margin decreased to 8.5%, compared to 10.9% in Q3 FY24, with an adjusted operating margin of 9.0%[2][3]. - Net income attributable to MSC was $56.8 million, a decline of 20.7% year-over-year, with adjusted net income of $60.2 million[2][3]. - Diluted EPS was $1.02, down from $1.27 in the prior fiscal year quarter, with adjusted diluted EPS of $1.08[2][3]. - Average daily sales declined by 0.8% year-over-year, slightly ahead of the midpoint of the company's outlook[4]. - Net sales for the thirteen weeks ended May 31, 2025, were $971.145 million, a decrease of 0.2% compared to $979.350 million for the same period in 2024[15]. - Gross profit for the same period was $397.739 million, resulting in a gross margin of 41.0%[25]. - Net income attributable to MSC Industrial for the thirteen weeks ended May 31, 2025, was $56.845 million, down 20.8% from $71.705 million in the prior year[15]. - The diluted net income per common share was $1.02, compared to $1.27 for the same period last year, reflecting a decrease of 19.7%[25]. - Net sales for the thirty-nine weeks ended May 31, 2025, were $2,791,346, with a gross profit of $1,141,156, resulting in a gross margin of 40.9%[26]. - Net income attributable to MSC Industrial for the thirty-nine weeks ended May 31, 2025, was $142,782, with diluted earnings per share of $2.55[26]. - The net income for the thirteen weeks ended June 1, 2024, was $71,705, with diluted earnings per share of $1.27[28]. Operating Expenses - Operating expenses increased to $312.324 million from $288.991 million, representing a rise of 8.1% year-over-year[15]. - The operating expenses for the thirty-nine weeks ended June 1, 2024, were $870,859, representing 30.4% of net sales[30]. - The company incurred restructuring and other costs of $2.680 million during the quarter[25]. - The company incurred restructuring and other costs of $11,787 for the thirty-nine weeks ended June 1, 2024[30]. Cash Flow and Shareholder Returns - Approximately $56 million was returned to shareholders through dividends and share repurchases during the fiscal third quarter[2]. - Cash flows from operating activities for the thirty-nine weeks ended May 31, 2025, were $253.461 million, down from $303.433 million in the previous year[19]. - Cash and cash equivalents at the end of the period were $71.692 million, an increase from $25.928 million at the end of the previous year[19]. - Free cash flow conversion is projected to be approximately 120%[10]. Future Outlook - The company aims to restore performance consistent with long-term objectives of growing to 400 basis points or more above the IP Index and expanding operating margins to the mid-teens[2]. - Full-year fiscal 2025 outlook for certain financial metrics has been maintained, with adjusted operating margin guidance of 8.5% to 9.0%[5][6].