An improving sales environment is driving list price increases among suppliers, and the industrial supplies distributor will ‘follow suit in the near term,’ says CEO Eric Gershwind.

E-commerce sales continued to hover around 60% of total sales for MSC Industrial Supply Co. in the first quarter of fiscal 2018. Total sales grew by double digits, reflecting a brighter economic outlook, MSC president and CEO Erik Gershwind said.

Gershwind told analysts on the company’s quarterly earnings call today that “e-commerce was 59.8% of sales in the quarter, up from 59.6% a year ago.” Based on those percentages, e-commerce sales were $460.0 million in the first quarter of fiscal 2018, compared with $409.0 million in the prior-year quarter.

After several years of a weak pricing environment, many suppliers have now raised list prices, and we expect to follow suit in the near-term.
Erik Gershwind, president and CEO
MSC Industrial Supply

“E-commerce sales includes all forms of automated selling,” Gershwind said on the call. “Product sales that go through our vendor-managed (inventory) sales solutions or our vending machines account for slightly less than half of e-commerce sales.” Under vendor-managed inventory, MSC monitors a client’s inventory and replenishes as necessary.

The economic outlook bodes well for MSC and manufacturers, Gershwind said in a statement. “Looking forward, it is an exciting time for U.S. manufacturing and MSC on multiple fronts. First, after several years of a weak pricing environment, many suppliers have now raised list prices, and we expect to follow suit in the near-term. Second, customer sentiment and industry indices are positive, pointing to continued U.S. manufacturing growth prospects.”

He noted recent tax reform is “a significant tailwind” for the company’s earnings, its customers and “the broader manufacturing economy in the coming years.”


For the first quarter ended Dec. 2, 2017, MSC which distributes maintenance, repair and operations products, reported:

  • Net sales of $768.6 million, up 12.0% from $686.3 million in the same period last year.
  • Gross profit of $335.1 million, up 8.6% from $308.7 million.
  • Net income of $59.6 million, up 9.8% from $54.3 million.

Earnings include e-commerce and catalog sales from Deco Tool Supply Co., which contributed $29.7 million in total revenue for the quarter.

MSC acquired industrial supply distributor Deco for $42 million in August. Deco does $100 million in annual sales. The Davenport, Iowa-based company sells online at and through a catalog.

Deco’s sales are strictly B2B, but an MSC spokesman declined to disclose how much of Deco’s sales came from the web versus its catalog. Data from web traffic monitor SimilarWeb indicated Deco’s online activity is modest. SimilarWeb says attracted fewer than 5,000 visits in July 2017, just before the acquisition was announced, versus 1.55 million for MSC’s main U.S. e-commerce site,

MSC is No. 87 in the 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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