Amid strong headwinds crimping its total sales, e-commerce provided a relative bright spot for industrial distributor MSC Industrial Supply Co. in its fiscal second quarter ended Feb. 27.
The macro environment “remains quite challenging,” president and CEO Erik Gershwind said on a conference call with analysts today. He pointed to low oil prices and a strong U.S. dollar, which he said have combined to cut demand from manufacturers for MSC’s industrial products and metalworking services.
Nonetheless, Gershwind said he was pleased with MSC’s performance in light of the difficult conditions.
A good part of that performance comes from MSC’s e-commerce operations, which accounted for 57.8% of total revenue in the quarter, up from 55.4% in the year-earlier quarter. Q2 e-commerce sales inched up 1.0% to $395.42 million as total net sales fell 3.2% year over year to $684.12 million. The company’s e-commerce site, MSDirect.com, is No. 97 in the B2B E-Commerce 300, which ranks companies on their annual Internet sales.
Gershwind said MSC plans to continue investing in e-commerce, including the addition of about 150,000 product SKUs in the current fiscal year, including 5,000 added during the second quarter. MSC now has about 930,000 SKUs available online, and will surpass 1 million by the end of the fiscal year. MSC distributes business and industrial products ranging from metal-cutting tools to electronics equipment and janitorial supplies.
He added that MSC has made progress in cross-selling its product lines and improving productivity.
For the second quarter ended Feb. 27, MSC also reported:
E-commerce sales increased 1.0% to $395.42 million from $391.35 million a year earlier;
Total net sales fell 3.2% to $684.12 million from $706.40 million;
Gross profit of $308.79 million, down 3.8% from $320.87 million;
Net income of $49.53 million, down 3.9% from $51.53 million.
For first half of the fiscal year, MSC reported:
Total net sales of $1.391 billion, down 3.2% from $1.437 billion a year earlier
Gross profit of $627.76 million, down 3.6% from $651.02 million;
Net income of $104.55 million, down 4.0% from $108.94 million.
Sign up for a free subscription to B2BecNews, a twice-weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry. B2BecNews is published by Vertical Web— Media LLC, which also publishes the monthly business magazine Internet Retailer. Follow Paul Demery, editor for B2B e-commerce, on Twitter @pdemery.
Follow us on LinkedIn and be the first to know when new B2BecNews publishes new content.