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Fastenal reported first-quarter revenue and profit in-line with Wall Street's estimates on Friday, as higher-value contracts for its fasteners and other industrial supplies helped it offset weaker demand from manufacturing and construction sectors.
The company said more customers — factories, warehouses and construction sites among others — crossed the threshold of $10,000 per month in purchases; its lower-spending customers also showed modest improvement.
The threat of President Donald Trump's tariffs prompted businesses to front-load goods in the first quarter to bypass duties. But it also made them refrain from big investments in sectors such as construction, affecting demand for Fastenal's products.
The Winona, Minnesota-based company makes fasteners — one of its biggest revenue generators — and other industrial supplies such as protective wear and communication equipment.
Fastenal's gross profit margin fell to 45.1% of total sales from 45.5% a year earlier, driven by a higher proportion of sales to larger, lower-margin customers and increased transportation costs.
Shares of the company, which holds a market value of $43.5 billion, fell 1% to $75.1 in premarket trading.
It reported net sales of $1.96 billion in the quarter ended March 31, marginally above analysts' estimates of $1.95 billion, according to data complied by LSEG.
The nuts and bolts maker posted a profit of 52 cents per share, in line with Wall Street estimates.
Sales of fasteners fell to 30.3% of the company's total sales, compared with 31.5% a year earlier. Its non-fasteners sales grew to 69.7% of total sales from 68.5% previously.
(Reporting by Abhinav Parmar in Bengaluru; Editing by Sahal Muhammed)