Fastenal Company’s FAST first-quarter 2025 adjusted earnings came in line with the Zacks Consensus Estimate and on par year over year. On the other hand, net sales surpassed the consensus mark and grew year over year.
The top-line growth was attributable to improved customer contract signings over the past 12 months, which were partially offset by sluggish underlying business activity. The bottom line was adversely impacted by higher fleet and transportation costs, along with increased labor costs.
FAST stock lost 0.03% in the pre-market trading session on Friday, after the results’ announcement.
Fastenal’s Earnings & Sales in Detail
The company reported earnings per share (EPS) of 52 cents, which met the Zacks Consensus Estimate and remained flat year over year.
Net sales totaled $1.96 billion, topping the consensus mark of $1.95 billion by 0.5% and increasing 3.4% from the year-ago level.
Fastenal Company Price, Consensus and EPS Surprise
Fastenal Company Price, Consensus and EPS Surprise
Fastenal Company price-consensus-eps-surprise-chart | Fastenal Company Quote
Daily sales of $31.1 million increased 5% year over year in the quarter despite one less selling day. Foreign exchange rates negatively impacted sales by 50 basis points (bps) compared with an immaterial impact in the year-ago quarter.
Unit sales growth in the quarter was driven by the growth in the number of customer sites spending $10K or more per month with Fastenal and, to a lesser degree, growth in average monthly sales per customer site across all customer spend categories.
Daily sales of Fasteners (mainly used for industrial production and accounted for approximately 30.3% of net sales) increased 1.1% year over year. Sales of Safety Supplies (22%) grew 7.1% daily. Sales of the Other Product Lines (47.7%) also increased 6.7% year over year.
On an end-market basis, the daily sales rate of Heavy Manufacturing (which accounted for approximately 43.4% of net sales) rose 4.8% year over year. The daily sales rate of Other Manufacturing (33%) grew 9.7% compared with the prior year.
Furthermore, the daily sales of Non-Residential Construction declined 3.4% compared with the prior-year quarter, while the same for Other End-Markets grew 0.8% in the same time frame.
Daily sales through weighted FMI devices grew 9.5% for the first quarter, representing 43.3% of net sales. Daily sales through eProcurement and eCommerce were up 17.2% and 0.2%, respectively.
The company’s Digital Footprint increased to 61% of sales from 59.2% in the year-ago period. Fastenal anticipates that 66- 68% of its sales volume will flow through Digital Footprint at some point in 2025.
Customer Sites Detail of FAST
Customer sites represent the number of customer locations served by the company’s in-market network. In terms of manufacturing sales, customer sites declined in the first quarter to 43,259 from 44,710 in the year-ago quarter. Manufacturing sales increased to $1.49 billion, up year over year from $1.44 billion.
In terms of non-manufacturing sales, customer sites declined to 57,785 from 64,934 reported a year ago. Non-manufacturing sales increased to $466.4 million, up year over year from $454 million.
Margin Discussion of Fastenal
The gross margin was 45.1% in the reported quarter, down 40 bps year over year. This downside was due to an unfavorable customer/product mix and higher fleet/freight costs, with offsets related to increased supplier spend and incentives. The company expects a narrower gap to the full year based on easier comparisons and benefits from inventory investments in the back half of 2025.
Selling, general and administrative expenses – as a percentage of net sales – increased to 25% from 24.9% reported in the year-ago quarter due to one less selling day and increased employee-based compensation and occupancy expenses. Our model predicted SG&A expenses of 24.9% of net sales for the quarter.
Operating margin was 20.1% (lower than our projection of 20.4%), down 50 bps from a year ago.
FAST’s Financials
As of March 31, 2024, Fastenal had cash and cash equivalents of $231.8 million, down from $255.8 million as of Dec. 31, 2023. The long-term debt in the first quarter of 2025-end was $125 million, in line with 2024-end. During the quarter, FAST returned $246.7 million to its shareholders in the form of dividends.
In the first quarter of 2025, net cash provided by operating activities totaled $262.2 million, down from the year-ago period’s reported value of $335.6 million.
FAST’s Zacks Rank & Key Picks
Fastenal currently carries a Zacks Rank #3 (Hold).
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