Preliminary Q3 2024 MSC Industrial Direct Co Inc Earnings Call Transcript
Key Points
- Technical and high-touch portions of the business, including in-plant, vending, national accounts, public sector, and OEM, are performing well.
- Gross margin improved slightly year over year.
- Cash flow generation remained strong, with an expectation of achieving greater than 125% operating cash flow conversion for the full fiscal year.
- Public sector showed notable sequential improvement in average daily sales.
- OEM fastener business and cross-selling formula resulted in new wins and double-digit sequential ADS improvement.
- Average daily sales declined over 7% year over year.
- Gross margin is expected to be below second-quarter levels by approximately 60 basis points.
- Revenue growth in core customers is slower than anticipated due to delays in the rollout of the new website and search functions.
- Missed gross margin plan due to complexities in the web price realignment project.
- Lowered full-year outlook for average daily sales and adjusted operating margin due to recent performance.
Good morning, and welcome to the MSC Industrial supply fiscal 2024 preliminary third-quarter results and annual outlook update conference call. (Operator Instructions) Please note, this event is being recorded.
I would now like to turn the conference over to Ryan Mills, Head of Investor Relations.
Good morning. Thank you for joining us for MSC's preliminary third-quarter fiscal 2024 earnings results conference call. Erik Gershwind, our Chief Executive Officer; and Kristen Actis-Grande, our Chief Financial Officer, are both on the call with me today.
During today's call, we will refer to various preliminary financial data in the presentation that accompany our comments, which can be found on our Investor Relations webpage. Please note that the estimates announced today are subject to change based on the completion of the company's quarter-end review process.
Let me reference our Safe Harbor statement, a summary of which is on slide 2 of today's presentation. Our
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