The web represents a growing share of revenue for the industrial supplies distributor, but total sales grew only 1.2% for the quarter.

Total sales edged forward for the fourth quarter and fiscal year at MSC Industrial Supply Co., while e-commerce continues to claim more of total revenue.

“E-commerce and vending including Deco was up from last quarter and up from 59.1% a year ago,” MSC president and CEO Erik Gershwind told analysts on the company’s year-end earnings call yesterday. “It is important to note that our e-commerce sales include all forms of automated selling. Product sales that go through our vendor-managed inventory solutions or our vending machines account for slightly less than half of e-commerce sales.”

Product sales that go through our vendor-managed inventory solutions or our vending machines account for slightly less than half of e-commerce sales.
Erik Gershwind, president and CEO
MSC Industrial Supply

MSC, which distributes maintenance, repair and operations products, acquired industrial supply distributor Deco Tool Supply Co. for $42 million in August, an MSC spokesman says. Deco does $100 million in annual sales. The Davenport, Iowa-based company sells online at Shop.Decotool.com and through a catalog.

Deco’s sales are strictly B2B, MSC’s spokesman says, but he declined to disclose how much of Deco’s sales came from the web versus its catalog. Data from web traffic monitor SimilarWeb indicates Deco’s online activity is modest. SimilarWeb says Shop.Decotool.com attracted fewer than 5,000 visits in July, just before the acquisition was announced, versus 1.55 million for MSC’s main U.S. e-commerce site, MSCDirect.com.

Growth in MSC’s key customer segments in Q4 offers optimism regarding future sales, Gershwind told analysts, according to a transcript of the call from Seeking Alpha. “From an end-market perspective, virtually all improved during the quarter,” he said. “Aerospace, fabricated metals, and oil and gas continued to show strength while other end-markets like heavy truck and agriculture, which had bottomed out several quarters earlier, are improving. In general, as customer sentiment remains positive and the industries hold the current levels, we should continue to see solid sales trends.”

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For the fiscal year ended Sept. 2, MSC reported:

  • Net sales of $2.887 billion, up 0.8% from $2.863 billion a year earlier.
  • Gross profit of $1.286 billion, down 0.2% from $1.288 billion.
  • Net income of $231.43 million, up 0.1% from $231.21 million

For the fourth quarter ended Sept. 2, 2017, MSC reported:

  • Net sales of $753.8 million, up 1.2% from $745.1 million in the same period last year.
  • Gross profit of $333.45 million, down 0.2% from $334.06 million.
  • Net income of $60.7 million, down 1.8% from $61.8 million.

MSC is No. 87 in the new 2018 B2B E-Commerce 300.  The company’s formal corporate name is MSC Industrial Direct Co. Inc., but it generally uses the name of its largest division, MSC Industrial Supply Co.

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