Posted April 7, 2016

MSC sees e-commerce growth

by Rich Vurva, Editor, Industrial Supply magazine

Despite a sales decline of 3.2% in its most recent quarter, e-commerce sales improved for MSC Industrial Supply Co.

In a conference call with analysts, CEO Erik Gershwind said e-commerce sales reached 57.8% of sales for the quarter, up from 57% last quarter and from 55.4% a year ago. He added that sales to vending customers contributed roughly 20% to the growth rate.

E-commerce sales reached $395.5 million for the quarter, compared to $391.1 million in the same period in 2015. The run rate for e-commerce sales for the second quarter of fiscal year 2016, which MSC defines as the average daily sales for the quarter multiplied by the number of business days in the fiscal year, was $1.62 million. That compares to a run rate of $1.57 million last year.

He said the company added approximately 5,000 SKUs to its e-commerce offering during the quarter, and is on track to add roughly 150,000 SKUs for the year.

For the company as a whole, Gershwind said the macro environment remains quite challenging but is showing some signs of potential stabilization in the months to come. "As expected, the environment remains difficult and the root causes have not changed. Sustained low oil prices and the strong U.S. dollar with its negative impact on export demand, continue to be a drag on manufacturing activity," he said.

Gershwind said overall demand remains quite weak, but there is a sense that the industrial economy may be stabilizing.