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Fastenal (FAST) to Post Q2 Earnings: What's in the Cards?

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Fastenal Company (FAST - Free Report) is scheduled to report second-quarter 2022 results on Jul 13, before the opening bell.

In the last reported quarter, earnings and revenues topped the Zacks Consensus Estimate by 6.8% and 1.3%, respectively. Earnings and revenues also increased 27.8% and 20.3% from the year-ago figures, respectively. Fastenal’s earnings topped the consensus mark in all the last four quarters, with the average being 5%.

Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has remained unchanged at 50 cents over the past 60 days. The estimated figure indicates 19.1% growth from the year-ago level. The consensus mark for revenues is pegged at $1.79 billion, suggesting an 18.6% increase from the year-ago reported figure of $1.51 billion.

Fastenal Company Price and EPS Surprise

Fastenal Company Price and EPS Surprise

Fastenal Company price-eps-surprise | Fastenal Company Quote

Key Factors to Note

Sales: Higher manufacturing and non-residential construction demand is expected to have generated higher sales on a year-over-year basis for this national wholesale distributor of industrial and construction supplies.

If we go by the latest monthly sales report, May’s average daily sales  (“ADS”) grew 17.6% to $28.1 million, slightly moderating sequentially. In April 2022, daily sales registered 20.3% growth, whereas the same had declined 3.2% in May 2021.

The company has been navigating well through issues like price inflation, supply chain challenges and shortage of labor. It has been gaining from all product categories, end markets and customers.

In terms of end markets/products/customers in May and April, manufacturing sales improved 22.4% and 25.7% from the respective year-ago months. Non-residential construction grew 10.7% and 13.4% for May and April 2022, respectively. Fastener sales were up 20% in May (compared with a 25.5% increase in April). Safety sales increased 15.6% in May compared with 16.7% growth in April. In terms of customer channel, national accounts were up 22% year over year in May (compared with up 26% in April), while non-national accounts grew 12% (compared with up 14% in April 2022).

The Zacks Consensus Estimate for the company’s overall daily sales is pegged at $28.2 million, which indicates an increase from $26.6 million reported in the prior quarter and $23.6 million a year ago.

Margins: Inflationary pressure has been a cause of concern. The company highlighted the fact that it has been experiencing significant material cost inflation, particularly for steel, fuel and transportation. The company has been experiencing the adverse effects of tightening global and domestic supply chains.

However, Fastenal has been successfully raising prices to offset inflationary pressure. The company has been undertaking additional steps to counter cost pressure and incremental tariffs, which are expected to reflect on the bottom line.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for FAST this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) increases the odds of an earnings beat. This is not the case here, as you will see below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Fastenal carries a Zacks Rank #3.

Stocks With the Favorable Combination

Here are some companies which, according to our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Weyerhaeuser Company (WY - Free Report) has an Earnings ESP of +0.69% and a Zacks Rank #3.

WY’s earnings topped the consensus mark thrice but missed the same on one occasion, with the average surprise being 5.9%. Earnings for the to-be-reported quarter are expected to decline 20.4% year over year.

Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +6.44% and a Zacks Rank #3.

BCC’s earnings topped the consensus mark in all the last four quarters, with the average being 38.2%. Earnings for the to-be-reported quarter are expected to decline 38.6% year over year.

Thor Industries, Inc. (THO - Free Report) has an Earnings ESP of +4.46% and a Zacks Rank #3.

THO’s earnings topped the consensus mark in all the last four quarters, with the average being 37.4%. Earnings for the to-be-reported quarter are expected to grow 5.8% year over year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.