MSC Industrial Direct (MSM) is moving higher today after reporting in-line second-quarter earnings per share (EPS) of $1.00 vs $1.24 on a 4.5% decline in revenues to $786 million.

Sales were approximately 1% less than forecast, but this was offset by a 0.2% increase in operating margins. It appears that the company’s recent efforts to improve margins are paying off.

The quarter ended in February, so the main concern on the conference call was what happened after the quarter ended and the coronavirus crisis intensified. The company’s management said that sales declined 5% for March, after being up slightly for the first three weeks of the month.

While management also indicated that sales continued to fall in April, this decline did not move in a “straight down” fashion. I believe that this revelation offers some hope as we move through the worst of the crisis.

The company did not give any guidance. Instead, it will report sales on a monthly basis going forward. The shares have hung in well for a small-cap industrial company during the crisis, and today’s results strengthened my convictions that the company will outperform for the remainder of the year.

 I am slightly raising my buy under price on MSM to $62. My target remains $75.