Fastenal Sales Growth Hits Five-Quarter High
The industrial distributor reported 14.7% year-over-year daily sales growth in the second quarter.
The industrial-distribution supplier Fastenal (FAST) posted its strongest sales growth in five quarters, as demand from heavy-manufacturing customers accelerated and contract accounts expanded. Daily sales rose 14.7% year-over-year in the period ended June 30.
The result marked a second consecutive quarter of accelerating growth, extending a rebound that began in late 2023. Revenue climbed 14.7% to $2.39 billion, up from 12.4% growth in the prior quarter and 11.1% in the fourth quarter of 2023. Pricing contributed approximately 290 basis points to the top line, down from roughly 350 basis points in the first quarter.
Direct materials sales continued to outpace indirect, rising 16.5% year-over-year compared with 14.1% for indirect products. Fasteners and hardware led the direct category with 16.8% growth, while the heavy-manufacturing end market surged 18.1%, up from 14.1% in the first quarter. Contract-customer sales jumped 17.6%, accelerating from 14.6% in the prior quarter, and the number of high-volume manufacturing sites grew 6.0% year-over-year to 2,568.
Gross margin narrowed 75 basis points year-over-year to 44.6%, pressured by unfavorable price-cost spreads, customer mix, and higher transportation costs. Operating margin held steady at 21.0%, however, as selling, general, and administrative expenses improved 80 basis points to 23.5% of sales.
Net income rose 15.9% to $382.8 million, and diluted earnings reached $0.33 a share, up from $0.29 in the year-earlier period. Operating cash flow fell 4.6% year-over-year to $266 million, as accounts receivable climbed 17.6% to $1.56 billion.
Shareholder returns totaled $305 million, including $29.7 million in share repurchases, and total debt declined to $120 million, or 2.9% of capital. The company did not update its full-year outlook for vending-device signings, which remain below the revised 2024 target range of 27,000 to 29,000 machine-equivalent units.