MSC INDUSTRIAL (MSM) issues 'softer' preliminary Q3 results

MSC INDUSTRIAL SUPPLY CO. (NYSE: MSM) provided preliminary unaudited financial results for its fiscal third quarter ended June 1, 2024 and updated its outlook for the full fiscal year 2024. The third quarter results announced today are preliminary and subject to change based on the completion of the Company's quarter-end review process.

Erik Gershwind, President and Chief Executive Officer, said, "Today, we announced softer than expected preliminary third quarter results and are lowering our full year 2024 outlook, primarily driven by two factors. First, while average daily sales improved sequentially, ongoing heavy manufacturing softness and a slower than anticipated ramp in our Core Customer resulted in a lower sequential revenue improvement than anticipated. Second, gross margins were approximately 60 basis points below our expectations primarily due to, in roughly equal proportion, increased product and customer mix headwinds and unexpected dilution from our web price realignment. The latter tracks back to complexities that were not uncovered during the pilot phase of the web price alignment and the time it took to identify the cause of the unexpected dilution."

Gershwind continued, "We are taking decisive actions in response to these results. We are maintaining focus on the areas of the business that are delivering, such as In Plant, Vending and other high touch solutions, making changes to accelerate Core Customer growth initiatives, especially the website rollout, and have taken corrective actions on the web price realignment to improve gross margin trends. We are determined to execute the next chapter of our Mission Critical journey and achieve our long-term goals of growing 400 basis points or more above the Industrial Production Index and achieving adjusted operating margin in the mid-teens."

Conference Call Information
MSC will host a conference call Friday, June 14^th at 8:30 a.m. EDT to review the Company's preliminary third quarter details and updated outlook. The call and accompanying slides may be accessed at: https://investor.mscdirect.com. The conference call may also be accessed at 1-877-443-5575 (U.S.), 1-855-669-9657 (Canada) or 1-412-902-6618 (international).

An online archive of the broadcast will be available until June 28, 2024. The Company's reporting date for its fiscal 2024 third quarter is scheduled for July 2, 2024.

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