MSC Industrial Direct Co Inc (NYSE:MSM), a distributor of Metalworking and Maintenance, Repair and Operations supplies to industrial customers throughout North America, stock fell 2.52% (As on July 3, 11:22:19 AM UTC-4, Source: Google Finance) after the company slashed its full-year average daily sales outlook, as lower public sector orders dragged down the company’s fiscal third-quarter revenue on a yearly basis. The company has acquired ApTex Inc. and Premier Tool Grinding Inc. Under the purchase agreements, both companies will continue to operate under their current names as MSC companies. Combined, the two companies had estimated revenues of slightly over $20 million in 2023 and have 58 associates. Both acquisitions are expected to be net neutral to MSC’s fiscal year 2024 net income.

MSM in the third quarter of FY 24 has reported the adjusted earnings per share of $1.33, which is inline with the analysts’ estimates for the adjusted earnings per share of $1.33. The company had reported the adjusted revenue decline of 7.1 percent to $979.4 million in the third quarter of FY 24, missing the analysts’ estimates for revenue of $982.22 million. This includes a roughly 300 basis point headwind from non-repeating Public Sector orders in the prior year. This quarter, MSC Industrial generated an operating profit margin of 10.9%, down 1.9 percentage points year on year. Net income was USD 71.71 million compared to USD 95.18 million a year ago. Average daily sales fell 7.1%, impacted by a headwind of roughly 300 basis points from non-repeating public sector orders in the prior year, as well as continued softness in heavy manufacturing verticals. By customer type, public sector daily sales dropped 25% and national accounts ticked down 1.1%, while core and other customers moved 7% lower. Gross margin in the quarter totaled 40.9%, compared with 40.7% in the prior-year quarter, but down 60 basis points sequentially due to web price realignment initiative issues and mix headwinds

The distributor of industrial tools and supplies now expects average daily sales to decline 4.3% to 4.7% for fiscal 2024, compared with its previous guidance range of flat to up 5%. Adjusted operating margin is expected in the range of 10.5% to 10.7%, down from prior projections of 12% to 12.8%. The stock fell 2.6% in premarket activity.

Additionally, the company kept quarterly dividend at $0.83 a Share, which will be payable on July 23 to shareholders of record July 9.