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Fastenal's (FAST) Average Daily Sales Increase 5.2% in May

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Fastenal Company (FAST - Free Report) recently released its May sales report, wherein average daily sales grew 5.2% to $29.5 million, moderating from 7.8% growth In April 2023. The metric had witnessed 17.6% growth in May 2022.

Net sales in May 2023 were $649 million, reflecting an increase of 10.2% year over year. May 2023 had 22 business days compared with 21 days in May 2022, which added 4.8% to the sales growth.

Currency fluctuations had a negative impact of 0.4% on May’s daily sales growth. Daily sales on a seasonal basis were up 0.7% compared with the company’s benchmark (historical five-year average) of 2.7%, which is 200 basis points below the company’s historical seasonal benchmark.

Shares of Fastenal lost 2.4% during the trading session on May 6 but gained 1.6% during the after-hour trading session.

End-Market Perspective, Product Lines & Customers

From an end-market perspective, manufacturing sales improved 9.7% for the month, decelerating from 22.4% growth a year ago. Non-residential construction dropped 9.5% versus a 10.7% increase reported in May 2022. The average daily sales growth rate in non-residential and manufacturing end markets also decelerated in May from the prior month.

Fastenal derives sales from Fasteners, Safety and other product lines. Fasteners witnessed a 0.6% decline in sales last month against 20% growth in the year-ago period. Safety products grew 6.8% in May 2023 compared with a rise of 15.6% a year ago. In May 2023, Other categories improved 9% compared with 16.1% increase a year ago.

Geographically, sales in the United States grew 4% (compared with 19.1% a year ago), while Canada/Mexico grew 14% (compared with 14.7%). Rest of World sales declined to 1.7% compared with a 5.8% drop registered in the year-ago period.

In terms of customer/channel, National account daily sales growth advanced 9% in May from a year ago, given the fact that 71% of the top 100 accounts and 52% of public branches are expanding. Yet, non-national accounts showed no growth year over year for the month. In the year-ago period, daily sales growth in non-national accounts was up 12% year over year.

Zacks Investment Research
Image Source: Zacks Investment Research

Shares of the company have outperformed the industry this year so far. Although daily sales have moderated sequentially because of a potentially slower macro environment, we believe this Zacks Rank #2 (Buy) company is well-positioned to navigate through these challenges, given cost-control efforts and focus on e-commerce business.

The company’s industrial markets have been slowing down broadly due to reduced customer spending. Despite tough year-ago comparisons, Fastenal’s decent number of large customers, its leverage in its digital strategy, onsite/offsite mix and market share gains across its product categories are expected to drive growth.

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The Zacks Consensus Estimate for MELI’s 2023 sales and earnings per share (EPS) indicates a rise of 27.6% and 75%, respectively, from the year-ago period’s levels.

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The Zacks Consensus Estimate for ANF’s 2023 sales and EPS indicates a rise of 3.4% and 660%, respectively, from the year-ago period’s levels.

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The Zacks Consensus Estimate for BLDR’s 2023 earnings has increased to $9.62 per share from $7.21 over the past 30 days.

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