For ecommerce and total net sales, MSC Industrial Supply Co. is looking ahead to a brighter fiscal 2025.

For one thing, it expects to roll out in the fiscal 2025 second quarter, which starts in December, the much-needed upgrades to its flagship ecommerce site, MSCDirect.com.

MSC Industrial does about 60% of its total sales of metalworking and maintenance, repair and operations (MRO) products through ecommerce, and MSCDirect.com accounts for about half of MSC’s more than $2 billion in annual ecommerce revenue.

MSC plans upgrades as Q4 ecommerce sales drop 2%

But the company reported today year-over-year ecommerce sales declined nearly 2% in the fiscal fourth quarter ended August 31, the third consecutive quarter of ecommerce sales declines. For the full fiscal year, ecommerce sales dipped 0.8% to $2.43 billion.

Erik Gershwind, CEO, MSC Industrial Supply Co.

CEO Erik Gershwind said on an earnings call today that MSC has been dealing with a “challenging macro environment, particularly in heavy manufacturing” customer activity that has resulted in a sales downturn.

Still, he and other MSC executives said that the website upgrades — including improved site navigation and a new search algorithm — promised better days ahead and will support new marketing efforts later this year and in early 2025.

“We’re on plan with the upgrade with respect to marketing,”  Gershwind said. He added that website upgrades “are going to continue to roll out” over the next several months.

MSC said it is also pushing operational and supply chain upgrades that the company expects to improve the customer experience and increase revenue and gross profits.

MSC pushes ahead supply chain and inventory upgrades

Martina McIsaac, president and chief operating officer, MSC Industrial Supply Co.

Martina McIsaac, president and chief operating officer, noted several of these improvement plans, including:

⦁ Streamlining the supply chain for MSC’s original equipment manufacturer (OEM) fasteners and other product categories. “We intend to consolidate our demand planning and procurement and simplify the flow of materials to leverage our purchasing power and take costs out of our network,” McIsaac said.

⦁ Upgrading use of technology and system-wide inventory planning and allocation. “We want to ensure that we have the right inventory as close to our customers as possible, to reduce both costs and carbon by upgrading our planning algorithms,” McIsaac said. “We intend to improve service levels to the customer and work more collaboratively with our suppliers.”

⦁ Optimizing management of inbound and outbound freight. “The shift in our business to plan demand, coupled with the more sophisticated demand forecasting and allocation of inventory, will lead to a reduction in split shipments and a lower reliance on air freight,” McIsaac said, adding, “These three actions are expected to be $10 million to $15 million in combined annual savings.”

MSC cites more vending machines with fewer sales per unit

For the fiscal fourth quarter ended Aug. 31, MSC reported:

⦁ Total ecommerce sales of $615.2 million, down 1.9% from the year-earlier quarter.

⦁ Total net sales fell 8.0% to $952.84 million.

⦁ The number of installed internet-connected vending machines increased 9% to more than 27,000, though the average daily sales through internet-connected vending machines were flat, representing 7% of total net sales.

⦁ Net income decreased 38.3% to $53.95 million.

⦁ Gross profit fell 6.9% to $390.61 million, resulting in a Q4 gross margin of 41%.

For the full fiscal year ended Aug. 31, MSC reported:

⦁ Total net sales fell 4.7% to $3.82 billion

⦁ Net income decreased 25.4% to $255.96 million.

⦁ Gross profit dropped 4.3% to $1.57 billion, resulting in a gross margin of 41.2%.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].

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