MSC Industrial Inc. directed major capital expenditures to finish upgrades to its ecommerce site during its fiscal second quarter. As the company did so, MSC Industrial ecommerce sales increased their share of total sales. However, sales results overall took a hit.
Totals sales for the second quarter of fiscal 2024 ended March 2, declined 2.7% to $935.3 million from $961.6 million in the prior year. Net income fell to $61.56 million, compared with $71.31 million in the second quarter of fiscal 2023.
MSC Industrial ecommerce sales, including sales made through EDI systems, VMI systems, extensible markup language ordering-based systems, vending, hosted systems and other electronic portals, represented 63.2% of net sales compared to 62% for the same period in the prior fiscal year.
What was invested to boost MSC Industrial ecommerce sales
“As we move past the halfway point of fiscal 2024, our performance to date has been mixed,” said CEO Erik Gershwind, based on a transcript from SeekingAlpha.com. “Our high-touch programs such as vending and implant solutions continue capturing share and they are performing ahead of expectations. On the other hand, growth has not yet inflected in our core customer base in the face of a sluggish macro environment, particularly in our heavy manufacturing end markets.”
In the second quarter, MSC spent about $25 million in capital expenditures. That was up $10 million from the same quarter a year earlier and “primarily driven by investments tied to digital and ongoing solutions growth,” according to Gershwind. The company outlined key objectives in its efforts to strengthen MSC Industrial ecommerce sales and other metrics.
Goals behind MSC’s digital upgrades
Gershwind explained that digital priorities are not limited to MSC Industrial ecommerce sales alone. The company will also focus on improving customer journeys leading up to purchases.
“There are basically two fronts that we’re moving on in terms of our digital experience, our website, in particular,” he said. “And those two fronts are the platform, meaning the transactional engine that customers go through, and the search or product discovery function. We have improvements lined up on both.”
Priorities for the website upgrade include improving user experience, primarily site search and order processing. “They’re really aimed and anchored in two overarching principles,” Gershwind told analysts. “One is continuing to make the website the customer experience more frictionless, more seamless, and just a great — better and better experience as time goes on. And the second thing is to make it more personalized for the customer.”
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