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Fastenal (FAST) Shares Down Despite Q4 Earnings & Revenue Beat
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Fastenal Company (FAST - Free Report) reported fourth-quarter 2022 results, wherein earnings and revenues topped the Zacks Consensus Estimate. The company’s top and bottom lines also improved on a year-over-year basis, given the strong demand in markets associated with industrial capital goods and commodities amid inflation for products, particularly fasteners and transportation services.
Fastenal’s shares dropped 1.1% in the pre-market trading session on Jan 19, after it reported fourth-quarter 2022 results.
Earnings & Sales in Detail
The company reported earnings of 43 cents per share, which beat the consensus mark of 42 cents and rose more than 7% from the year-ago period.
Net sales totaled $1,695.6 million, beating the consensus mark of $1,675 million and increasing 10.7% from the year-ago figure of $1,531.8 million.
The company reported daily sales of $27.3 million, reflecting an increase of 10.7% year over year in the reported quarter. The upside was mainly due to higher unit sales owing to good demand from industrial capital goods and commodities, which offset softer markets tied to consumer goods and relatively lower growth in construction. The foreign exchange adversely impacted sales by 90 basis points.
On a monthly basis, daily sales improved 8%, 10.2% and 13.6% in December, November and October 2022, respectively, year over year.
Daily sales of Fastener products (mainly used for industrial production and accounting for approximately 33% of fourth-quarter sales) rose 24.2% year over year. Sales of safety products (accounting for 21.3% of fourth-quarter sales) grew 3.5% on a daily basis. Sales of the remaining products (accounting for 45.7% of fourth-quarter sales) grew 12.8% year over year.
On the end-market basis, daily sales of Manufacturing (accounting for approximately 72.9% of fourth-quarter sales) rose 23.8% year over year. Sales of Non-residential construction (accounting for 9.8% of fourth-quarter sales) grew 14.8% on a daily basis. Sales of Other (accounting for 19.3% of fourth-quarter sales) declined 9.9% year over year.
Fastenal Company Price, Consensus and EPS Surprise
Fastenal signed 62 new Onsite locations during the quarter and 356 in 2022. As of Dec 31, 2022, the company had 1,623 active sites, up 14.6% from the year-ago period. Daily sales through Onsite locations (excluding sales transferred from branches to new Onsites) increased at a high-teens rate year over year.
The company expects 375-400 annual Onsite signings in 2023.
Daily sales through weighted FMI devices grew 22.1% for the fourth quarter and represented 38.7% of net sales.
Daily sales to national account customers (representing 58.9% of total quarterly revenues) increased 19.9% on a year-over-year basis for fourth-quarter 2022. Daily sales to non-national account customers (which include government customers and represent 41.1% of total quarterly revenues) rose 7.6% from the prior-year quarter.
Margins
A gross margin of 45.3% for the reported quarter was down from 46.5% a year ago. This was due to lower product margins in other product categories and unfavorable price/cost dynamics. Also, slower demand and more product availability in the marketplace due to supply chain normalization have pressured margins on products that tend to be sold less frequently.
The operating margin remains flat at 19.6% from a year ago.
Financials
Cash and cash equivalents were $230.1 million as of Dec 31, 2022, down from $236.2 million on Dec 31, 2021. The long-term debt at 2022-end was $353.2 million, up from $330 million at 2021-end.
During 2022, FAST returned $949.1 million to its shareholders in the form of $711.3 million worth of dividends and $237.8 million worth of share repurchases.
For 2022, cash provided by operating activities totaled $941 million, up from $770.1 million in 2021. In the fourth quarter of 2022, the metric grew to $301.9 million from $156.4 million a year ago.
Yum China presently carries a Zacks Rank #2 (Buy). YUMC has a long-term earnings growth rate of 11%. Shares of YUMC have gained 24.7% in the past year.
The Zacks Consensus Estimate for Yum China’s 2023 sales and earnings per share (EPS) suggests growth of 14.6% and 58.4%, respectively, from the year-ago period’s reported levels.
McDonald's presently carries a Zacks Rank #2. MCD has a long-term earnings growth rate of 8.2%. Shares of MCD have gained 4.2% in the past year.
The Zacks Consensus Estimate for MCD’s 2023 sales and EPS suggests growth of 3.2% and 5.3%, respectively, from the year-ago period’s reported levels.
Yum! Brands currently carries a Zacks Rank #2. YUM has a long-term earnings growth rate of 11.8%. Shares of YUM have gained 3.4% in the past year.
The Zacks Consensus Estimate for Yum! Brands’ 2023 sales and EPS suggests growth of 6.2% and 15.5%, respectively, from the year-ago period’s reported levels.
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Fastenal (FAST) Shares Down Despite Q4 Earnings & Revenue Beat
Fastenal Company (FAST - Free Report) reported fourth-quarter 2022 results, wherein earnings and revenues topped the Zacks Consensus Estimate. The company’s top and bottom lines also improved on a year-over-year basis, given the strong demand in markets associated with industrial capital goods and commodities amid inflation for products, particularly fasteners and transportation services.
Fastenal’s shares dropped 1.1% in the pre-market trading session on Jan 19, after it reported fourth-quarter 2022 results.
Earnings & Sales in Detail
The company reported earnings of 43 cents per share, which beat the consensus mark of 42 cents and rose more than 7% from the year-ago period.
Net sales totaled $1,695.6 million, beating the consensus mark of $1,675 million and increasing 10.7% from the year-ago figure of $1,531.8 million.
The company reported daily sales of $27.3 million, reflecting an increase of 10.7% year over year in the reported quarter. The upside was mainly due to higher unit sales owing to good demand from industrial capital goods and commodities, which offset softer markets tied to consumer goods and relatively lower growth in construction. The foreign exchange adversely impacted sales by 90 basis points.
On a monthly basis, daily sales improved 8%, 10.2% and 13.6% in December, November and October 2022, respectively, year over year.
Daily sales of Fastener products (mainly used for industrial production and accounting for approximately 33% of fourth-quarter sales) rose 24.2% year over year. Sales of safety products (accounting for 21.3% of fourth-quarter sales) grew 3.5% on a daily basis. Sales of the remaining products (accounting for 45.7% of fourth-quarter sales) grew 12.8% year over year.
On the end-market basis, daily sales of Manufacturing (accounting for approximately 72.9% of fourth-quarter sales) rose 23.8% year over year. Sales of Non-residential construction (accounting for 9.8% of fourth-quarter sales) grew 14.8% on a daily basis. Sales of Other (accounting for 19.3% of fourth-quarter sales) declined 9.9% 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 62 new Onsite locations during the quarter and 356 in 2022. As of Dec 31, 2022, the company had 1,623 active sites, up 14.6% from the year-ago period. Daily sales through Onsite locations (excluding sales transferred from branches to new Onsites) increased at a high-teens rate year over year.
The company expects 375-400 annual Onsite signings in 2023.
Daily sales through weighted FMI devices grew 22.1% for the fourth quarter and represented 38.7% of net sales.
Daily sales to national account customers (representing 58.9% of total quarterly revenues) increased 19.9% on a year-over-year basis for fourth-quarter 2022. Daily sales to non-national account customers (which include government customers and represent 41.1% of total quarterly revenues) rose 7.6% from the prior-year quarter.
Margins
A gross margin of 45.3% for the reported quarter was down from 46.5% a year ago. This was due to lower product margins in other product categories and unfavorable price/cost dynamics. Also, slower demand and more product availability in the marketplace due to supply chain normalization have pressured margins on products that tend to be sold less frequently.
The operating margin remains flat at 19.6% from a year ago.
Financials
Cash and cash equivalents were $230.1 million as of Dec 31, 2022, down from $236.2 million on Dec 31, 2021. The long-term debt at 2022-end was $353.2 million, up from $330 million at 2021-end.
During 2022, FAST returned $949.1 million to its shareholders in the form of $711.3 million worth of dividends and $237.8 million worth of share repurchases.
For 2022, cash provided by operating activities totaled $941 million, up from $770.1 million in 2021. In the fourth quarter of 2022, the metric grew to $301.9 million from $156.4 million a year ago.
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.
Stocks in Broader Sector
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Yum China Holdings, Inc. (YUMC - Free Report) , McDonald's Corporation (MCD - Free Report) and Yum! Brands, Inc. (YUM - Free Report) .
Yum China presently carries a Zacks Rank #2 (Buy). YUMC has a long-term earnings growth rate of 11%. Shares of YUMC have gained 24.7% in the past year.
The Zacks Consensus Estimate for Yum China’s 2023 sales and earnings per share (EPS) suggests growth of 14.6% and 58.4%, respectively, from the year-ago period’s reported levels.
McDonald's presently carries a Zacks Rank #2. MCD has a long-term earnings growth rate of 8.2%. Shares of MCD have gained 4.2% in the past year.
The Zacks Consensus Estimate for MCD’s 2023 sales and EPS suggests growth of 3.2% and 5.3%, respectively, from the year-ago period’s reported levels.
Yum! Brands currently carries a Zacks Rank #2. YUM has a long-term earnings growth rate of 11.8%. Shares of YUM have gained 3.4% in the past year.
The Zacks Consensus Estimate for Yum! Brands’ 2023 sales and EPS suggests growth of 6.2% and 15.5%, respectively, from the year-ago period’s reported levels.