Studio City(MSC) ZACKS·2025-03-27 17:06Core Viewpoint - MSC Industrial Direct Co., Inc. (MSM) is expected to report a decline in revenues and earnings for the second quarter of fiscal 2025, with a consensus estimate of 900.9 million, indicating a year-over-year decline of 3.7% [2]. - The estimate for earnings per share is 68 cents, implying a year-over-year plunge of 42.4% [2]. - MSM's earnings surprise history shows that the company beat the Zacks Consensus Estimate in two of the last four quarters, matched in one, and missed in one, with an average earnings surprise of 3.5% [3][4]. Earnings Prediction - The Zacks model predicts an earnings beat for MSM this season, supported by a positive Earnings ESP of +2.61% and a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [5]. Industry Context - Approximately 70% of MSC Industrial's revenues are derived from the manufacturing sector, which saw a 0.7% increase in industrial production in February 2025, following increases of 1.1% and 0.3% in the previous months [6]. - The Institute for Supply Management's manufacturing index expanded in January and February 2025, with readings of 50.9% and 50.3%, respectively, after being in contraction for 26 months [7]. - However, the New Orders Index showed contraction at 48.6% in February, down from 55.1% in January, indicating a significant decline in new orders due to tariff uncertainties [8]. Operational Insights - MSM projected an operating margin in the range of 6.5-7.5%, down from an adjusted operating margin of 10.5% in the same quarter last year, primarily due to higher operating and personnel-related expenses [10]. - The company indicated that average daily sales growth in December was negatively impacted by holiday and fiscal calendar timing, with a guidance of a 3-5% decline in average daily sales for the second quarter [9]. Stock Performance - Over the past year, MSM's shares have decreased by 17.7%, compared to a 14.8% decline in the industry [11].