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MSC Industrial Direct Co Operating Margin %

: 12.75% (As of May. 2019)
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Operating Margin % is calculated as Operating Income divided by its Revenue. MSC Industrial Direct Co's Operating Income for the three months ended in May. 2019 was USD 111 Mil. MSC Industrial Direct Co's Revenue for the three months ended in May. 2019 was USD 867 Mil. Therefore, MSC Industrial Direct Co's Operating Margin % for the quarter that ended in May. 2019 was 12.75%.

Warning Sign:

MSC Industrial Direct Co Inc operating margin has been in 5-year decline. The average rate of decline per year is -2.9%.

NYSE:MSM' s Operating Margin % Range Over the Past 10 Years
Min: 13.04   Max: 17.5
Current: 12.42

13.04
17.5

NYSE:MSM's Operating Margin % is ranked higher than
87% of the 159 Companies
in the Industrial Distribution industry.

( Industry Median: 5.24 vs. NYSE:MSM: 12.42 )

MSC Industrial Direct Co's 5-Year Average operating margin Growth Rate was -2.90% per year.

MSC Industrial Direct Co's Operating Income for the three months ended in May. 2019 was USD 111 Mil. Its operating income for the trailing twelve months (TTM) ended in May. 2019 was USD 417 Mil.


MSC Industrial Direct Co Operating Margin % Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

MSC Industrial Direct Co Annual Data
Aug09 Aug10 Aug11 Aug12 Aug13 Aug14 Aug15 Aug16 Aug17 Aug18
Operating Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 13.75 13.04 13.13 13.12 13.13

MSC Industrial Direct Co Quarterly Data
Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 May18 Aug18 Nov18 Feb19 May19
Operating Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 13.93 12.86 12.39 11.66 12.75

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


MSC Industrial Direct Co Operating Margin % Distribution

* The bar in red indicates where MSC Industrial Direct Co's Operating Margin % falls into.



MSC Industrial Direct Co Operating Margin % Calculation

Operating margin - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.

MSC Industrial Direct Co's Operating Margin for the fiscal year that ended in Aug. 2018 is calculated as

Operating Margin %=Operating Income (A: Aug. 2018 ) / Revenue (A: Aug. 2018 )
=420.553 / 3203.878
=13.13 %

MSC Industrial Direct Co's Operating Margin for the quarter that ended in May. 2019 is calculated as

Operating Margin %=Operating Income (Q: May. 2019 ) / Revenue (Q: May. 2019 )
=110.501 / 866.546
=12.75 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


MSC Industrial Direct Co  (NYSE:MSM) Operating Margin % Explanation

Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.


Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia’s Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.


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