On July 12, 2024, Fastenal Co (FAST, Financial) released its 8-K filing for the quarter ended June 30, 2024. Fastenal, a leader in the wholesale distribution of industrial and construction supplies, reported earnings per share (EPS) of $0.51, matching analyst estimates, and revenue of $1,916.2 million, slightly exceeding the estimated $1,915.12 million.
Fastenal opened its first fastener store in 1967 in Winona, Minnesota. Today, it serves 400,000 active customers through approximately 1,600 branches, over 1,800 on-site locations, and 15 distribution centers. Fasteners remain its largest category, accounting for about 30%-35% of sales, while the company also offers supply-chain solutions such as vending and vendor-managed inventory.
Performance and Challenges
Fastenal Co (FAST, Financial) reported a 1.8% increase in net sales for Q2 2024 compared to Q2 2023, reaching $1,916.2 million. However, the company faced challenges such as a decline in fastener pricing due to lower transportation costs and reduced pricing in certain safety and other product categories. The divergence in performance between fastener and non-fastener product lines was notable, with fasteners experiencing a 3.0% decline in daily sales rate (DSR) while non-fasteners grew by 4.2%.
Financial Achievements
Despite the challenges, Fastenal Co (FAST, Financial) achieved several financial milestones. The company signed 107 new Onsite locations in Q2 2024, contributing to a total of 1,934 active sites, an 11.9% increase from the previous year. Additionally, daily sales through eBusiness grew by 25.5%, representing 28.7% of total sales for the period.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Net Sales | $1,916.2 million | $1,883.1 million | 1.8% |
| Gross Profit | $863.5 million | $857.5 million | 0.7% |
| Net Income | $292.7 million | $298.0 million | -1.8% |
| Diluted EPS | $0.51 | $0.52 | -2.0% |
Balance Sheet and Cash Flow
Net cash provided by operating activities was $258.0 million in Q2 2024, a decrease of 14.6% from Q2 2023. The decrease was primarily due to a shift in operating assets and liabilities, particularly inventory, which swung to a modest use of cash. Fastenal Co (FAST, Financial) returned $223.3 million to shareholders in the form of dividends during the quarter.
Analysis
Fastenal Co (FAST, Financial)'s performance in Q2 2024 reflects a balanced mix of growth and challenges. The company's ability to slightly exceed revenue expectations while matching EPS estimates demonstrates resilience in a competitive market. However, the decline in fastener pricing and the modest decrease in net income highlight areas that require strategic focus. The growth in Onsite locations and eBusiness sales indicates strong potential for future expansion.
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Explore the complete 8-K earnings release (here) from Fastenal Co for further details.
