Benzinga | Oct 20, 2021 08:09AM EDT

MSC Industrial Direct Clocks 11% Sales Growth In Q4, Misses Consensus

* MSC Industrial Direct Co Inc (NYSE:MSM) reported fourth-quarter FY21 sales growth of 11.1% year-over-year to $831 million, missing the consensus of $837.62 million.

* The average daily sales growth rate of 12.9% was ~500 basis points above the Industrial Production Index.

* Adjusted EPS improved to $1.26 from $1.09 in 4Q20, in line with the consensus of $1.26.

* The gross margin expanded by 40 bps to 42%. Adjusted operating income increased by 15.2% Y/Y to $96.9 million, and margin expanded by 50 bps to 11.7%.

* Darning the quarter MSC Industrial repurchased 231,000 shares. MSC Industrial generated cash from operating activities for the fiscal year of $224.46 million, compared to $396.74 million a year ago.

* "Looking ahead to fiscal 2022, we target growing at least 300 basis points above the Industrial Production Index and holding gross margins roughly flat once again. For our Mission Critical program, we expect to save an additional $25 million and invest an additional $15 million. Despite the additional supply chain and labor challenges, we still expect to achieve incremental margins of 20% in our likely growth scenarios," commented CEO Erik Gershwind.

* "Furthermore, we remain on track to achieve our longer-term goals of growing sales 400 basis points above the Industrial Production Index and returning ROIC to the high teens by the end of fiscal 2023," he added.

* Price Action: MSM shares closed higher by 0.98% at $85.90 on Tuesday.