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Fastenal Company (FAST - Free Report) reported second-quarter 2022 results, wherein earnings came in line with the Zacks Consensus Estimate but revenues missed the mark. That said, the company’s top and bottom lines improved on a year-over-year basis, given strong demand for manufacturing and construction equipment and supplies, along with higher pricing.
Fastenal’s shares fell more than 5% in the pre-market trading session on Jul 13, after it reported the results.
Earnings & Sales in Detail
The company reported earnings of 50 cents per share, which came in line with the consensus mark but rose 19.7% from the year-ago period.
Net sales totaled $1,778.6 million, missing the consensus mark of $1,792 million but increasing 18% from the year-ago figure of $1,507.7 million.
The company reported daily sales of $27.8 million, reflecting an increase of 18% year over year, in the reported quarter. The upside was mainly due to higher unit sales across most products to traditional manufacturing and construction customers, stemming from improvement in business activity. On a monthly basis, daily sales improved 16%, 17.6% and 20.3% in June, May and April, respectively, year over year.
Daily sales of Fastener products (mainly used for industrial production and accounting for approximately 34.6% of second-quarter sales) rose 21.2% year over year, backed by higher manufacturing and construction demand as well as increased pricing. Sales of safety products (accounting for 20.3% of second-quarter sales) grew 13.8% on a daily basis. The upside was mainly driven by solid growth and higher pricing for traditional manufacturing and construction clients. Sales of the remaining products (accounting for 45.1% of second-quarter sales) grew 17% year over year.
Fastenal Company Price, Consensus and EPS Surprise
Fastenal signed 102 new Onsite locations during the quarter. As of Jun 30, 2022, the company had 1,501 active sites, up 13.5% from the year-ago period. Daily sales through Onsite locations (excluding sales transferred from branches to new Onsites) increased more than 20% from a year ago.
The company continues to expect 375-400 annual Onsite signings in 2022.
Daily sales, through weighted FMI devices, grew 36.8% for the second quarter and represented 35.6% of net sales.
Daily sales to national account customers (representing 57.3% of total quarterly revenues) increased 22.9% on a year-over-year basis for second-quarter 2022. Daily sales to non-national account customers (which include government customers and represent 42.7% of total quarterly revenues) rose 12.2% from the prior-year quarter.
Margins
Gross margin of 46.5% for the reported quarter remained unchanged from the prior-year period. A modest decline in product margin was offset by better leverage of organizational expenses, given solid business activity.
Operating margin improved 50 basis points (bps) to 21.6% from 21.1% a year ago.
Financials
Cash and cash equivalents were $247.9 million as of Jun 30, 2022, up from $236.2 million on Dec 31, 2021. Long-term debt at quarter-end was $310 million, down from $330 million at 2021-end.
During the reported quarter, FAST returned $227.8 million to its shareholders in the form of $178.5 million worth of dividends and $49.3 million worth of share repurchases.
For the first six months of 2022, cash provided by operating activities totaled $381.2 million compared with $446.3 million in the year-ago period.
Builders FirstSource sports a Zacks Rank #1. Shares of BLDR have risen 13.5% in the past month.
The Zacks Consensus Estimate for BLDR’s 2022 earnings per share has moved north to $12.26 from $11.71 over the past 60 days. The estimated figure suggests 18.8% year-over-year growth.
Beacon Roofing Supply sports a Zacks Rank #1. Shares of the company have declined 3.3% in the past month.
The Zacks Consensus Estimate for BECN’s 2022 sales and earnings per share suggests growth of 23.5% and 36.2%, respectively, from the year-ago period’s levels.
GMS carries a Zacks Rank #2 (Buy). Shares of the company have risen 2.4% in the past month.
The Zacks Consensus Estimate for GMS’ current year sales and EPS suggests growth of 8.7% and 2.8%, respectively, from the year-ago period’s levels.
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Fastenal (FAST) Q2 Earnings Meet, Revenues Lag, Shares Dip
Fastenal Company (FAST - Free Report) reported second-quarter 2022 results, wherein earnings came in line with the Zacks Consensus Estimate but revenues missed the mark. That said, the company’s top and bottom lines improved on a year-over-year basis, given strong demand for manufacturing and construction equipment and supplies, along with higher pricing.
Fastenal’s shares fell more than 5% in the pre-market trading session on Jul 13, after it reported the results.
Earnings & Sales in Detail
The company reported earnings of 50 cents per share, which came in line with the consensus mark but rose 19.7% from the year-ago period.
Net sales totaled $1,778.6 million, missing the consensus mark of $1,792 million but increasing 18% from the year-ago figure of $1,507.7 million.
The company reported daily sales of $27.8 million, reflecting an increase of 18% year over year, in the reported quarter. The upside was mainly due to higher unit sales across most products to traditional manufacturing and construction customers, stemming from improvement in business activity. On a monthly basis, daily sales improved 16%, 17.6% and 20.3% in June, May and April, respectively, year over year.
Daily sales of Fastener products (mainly used for industrial production and accounting for approximately 34.6% of second-quarter sales) rose 21.2% year over year, backed by higher manufacturing and construction demand as well as increased pricing. Sales of safety products (accounting for 20.3% of second-quarter sales) grew 13.8% on a daily basis. The upside was mainly driven by solid growth and higher pricing for traditional manufacturing and construction clients. Sales of the remaining products (accounting for 45.1% of second-quarter sales) grew 17% year over year.
Fastenal Company Price, Consensus and EPS Surprise
Fastenal Company price-consensus-eps-surprise-chart | Fastenal Company Quote
Vending Trends & Other Growth Drivers
Fastenal signed 102 new Onsite locations during the quarter. As of Jun 30, 2022, the company had 1,501 active sites, up 13.5% from the year-ago period. Daily sales through Onsite locations (excluding sales transferred from branches to new Onsites) increased more than 20% from a year ago.
The company continues to expect 375-400 annual Onsite signings in 2022.
Daily sales, through weighted FMI devices, grew 36.8% for the second quarter and represented 35.6% of net sales.
Daily sales to national account customers (representing 57.3% of total quarterly revenues) increased 22.9% on a year-over-year basis for second-quarter 2022. Daily sales to non-national account customers (which include government customers and represent 42.7% of total quarterly revenues) rose 12.2% from the prior-year quarter.
Margins
Gross margin of 46.5% for the reported quarter remained unchanged from the prior-year period. A modest decline in product margin was offset by better leverage of organizational expenses, given solid business activity.
Operating margin improved 50 basis points (bps) to 21.6% from 21.1% a year ago.
Financials
Cash and cash equivalents were $247.9 million as of Jun 30, 2022, up from $236.2 million on Dec 31, 2021. Long-term debt at quarter-end was $310 million, down from $330 million at 2021-end.
During the reported quarter, FAST returned $227.8 million to its shareholders in the form of $178.5 million worth of dividends and $49.3 million worth of share repurchases.
For the first six months of 2022, cash provided by operating activities totaled $381.2 million compared with $446.3 million in the year-ago period.
Zacks Rank
Fastenal currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Better-Ranked Stocks in Broader Sector
Better-ranked stocks from the Zacks Retail-Wholesale sector include Builders FirstSource, Inc. (BLDR - Free Report) , Beacon Roofing Supply, Inc. (BECN - Free Report) , and GMS Inc. (GMS - Free Report) .
Builders FirstSource sports a Zacks Rank #1. Shares of BLDR have risen 13.5% in the past month.
The Zacks Consensus Estimate for BLDR’s 2022 earnings per share has moved north to $12.26 from $11.71 over the past 60 days. The estimated figure suggests 18.8% year-over-year growth.
Beacon Roofing Supply sports a Zacks Rank #1. Shares of the company have declined 3.3% in the past month.
The Zacks Consensus Estimate for BECN’s 2022 sales and earnings per share suggests growth of 23.5% and 36.2%, respectively, from the year-ago period’s levels.
GMS carries a Zacks Rank #2 (Buy). Shares of the company have risen 2.4% in the past month.
The Zacks Consensus Estimate for GMS’ current year sales and EPS suggests growth of 8.7% and 2.8%, respectively, from the year-ago period’s levels.