Despite ongoing pressures from supply chains and inflation, MSC Industrial Supply Co. wrapped up its 2022 fiscal year with double-digit sales increases, the company said today.
For the fiscal fourth quarter ended Sept. 3, MSC’s ecommerce sales increased 29.7% year over year to $646.3 million, as total net sales increased 23% to $1.022 billion. (MSC noted that its fiscal Q4 in 2022 included five more days than the prior-year quarter.)
In an earnings call today, CEO Erik Gershwind said Q4 ecommerce sales reached 63% of total net sales, up from 60% in the year-earlier quarter.
For the full fiscal year ended Sept. 3, ecommerce sales increased 16.9% year over year to $2.28 billion, as total net sales increased 13.8% to $3.7 billion. Ecommerce sales for the fiscal year ended Sept. 3 accounted for 61.6% of total net sales, up from 60.0% the prior year.
Gershwind said ecommerce is one of MSC’s priority areas of growth, along with expanding its metalworking products and services and building out its public sector sales. He noted that the company’s first chief digital officer, John Hill, who was appointed in April, has been “quite busy improving our website and our entire digital offering.” Gershwind didn’t go into specifics but added, “So far, the feedback we’ve received from the field is excellent.”
Gershwind added that MSC increased by 21% in Q4 its customer signings for the company’s internet-connected vending machines, “and that vending sales now account for 15% of total company sales.”
Building inventory amid supply chain disruptions
Overall, MSC sells more than 2 million products in its portfolio of metalworking and maintenance, repair and operations (MRO) products. At the end of Q4, the company was carrying 716 million inventory items, up 36 million from Q3. “The inventory build is consistent with our double-digit revenue growth, the ongoing supply chain disruptions, and continuing inflation,” Kristen Actis-Grande, executive vice president and chief financial officer, said on the earnings call.
“We continue to see inflation from our suppliers, particularly on the metalworking side of the business, albeit at a slower pace in the past year,” Gershwind added.
To help improve supply chain and related operations, MSC in September filled the newly created position of executive vice president and chief operating officer with the appointment of Martina McIsaac, a former CEO of manufacturer Hilti Inc. McIsaac oversees sales, pricing, procurement, supply chain and other operations.
In August, MSC acquired Tower Fasteners, a Holtsville, New York-based distributor of original equipment fasteners and components. Tower had about $35 million in 2021 revenue and will continue to operate under its own brand and senior management within MSC’s All Integrated Solutions subsidiary, which focuses on the OEM market, MSC said. Tower doesn’t directly engage in ecommerce but its website links to ecommerce sites operated by such suppliers as RAF Electronic Hardware and Heyco.
MSC’s financial figures
For the fiscal fourth quarter ended Sept. 3, MSC reported:
- Ecommerce sales increased 29.7% year over year to $636.3 million. They accounted for 63% of total net sales, which grew 23% to $1.022 billion.
- Gross profit of $428.2 million resulted in a gross margin of 41.9%, down from 42.0%.
- Net income increased 58.4% to $104.4 million.
For the fiscal year ended Sept. 3, MSC reported:
- Ecommerce sales increased 16.9% year over year to $2.28 billion. They accounted for 61.6% of total sales, which increased 13.8% to $3.7 billion.
- Net income increased 56.3%% to $340.48 million.
MSC’s ecommerce sales include commerce transactions through:
- Its ecommerce site MSCDirect.com,
- internet-connected vending machines,
- vendor-managed inventory systems,
- XML-based ordering systems,
- electronic data interchange,
- and other electronic portals.
MSC’s formal corporate name is MSC Industrial Direct Co. Inc., but it often goes by the name of its primary unit, MSC Industrial Supply Co.
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