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MSC Industrial Direct Co Inc Class A MSM

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Morningstar’s Analysis

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Strong Growth Returns for MSC Industrial but Operating Environment Remains Challenging

Analyst Note

| Brian Bernard, CFA, CPA |

MSC Industrial Direct enjoyed strong year-over-year revenue growth during its fiscal first quarter ended Nov. 27. Sales increased nearly 10% as the company executed on its growth initiatives and end market demand improved (industrial production has expanded at a steady pace for much of 2021). In terms of the growth initiatives, MSC saw notable growth during the quarter from its industrial vending and in-plant initiatives as well as from its e-commerce platform (MSCDirect.com). We understand MSC's in-plant solution is like Fastenal's on-site program, which has enjoyed significant growth over the last few years (Fastenal's number of on-sites has more than tripled in five years). MSC management said in-plant revenue now accounts for 8% of consolidated sales.

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Company Profile

Business Description

MSC Industrial Direct is a value-added industrial distributor with a focus on metalworking and maintenance, repair, and operations products and services. The company offers 1.9 million products through its distribution network which has 11 fulfillment centers. Although MSC has a presence in Canada, Mexico, and the United Kingdom, it primarily operates in the United States. In fiscal 2021, 94% of the firm’s $3.2 billion of sales was generated in the U.S.

Contact
75 Maxess Road
Melville, NY, 11747
T +1 516 812-2000
Sector Industrials
Industry Industrial Distribution
Most Recent Earnings Nov 30, 2021
Fiscal Year End Aug 31, 2021
Stock Type High Yield
Employees 6,571

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