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Fastenal (FAST) Q1 Earnings & Sales Miss Estimates, Shares Down
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Fastenal Company’s (FAST - Free Report) shares lost more than 5.7% in the pre-market trading session on Apr 11, 2024, after it reported first-quarter 2024 results. Earnings and net sales missed the Zacks Consensus Estimate. The adverse weather conditions and the impact of customer and product mix have affected Fastenal's quarterly results.
Earnings & Sales in Detail
The company reported earnings per share (EPS) of 52 cents, which missed the consensus mark by a penny and remained flat from the year-ago period.
Net sales totaled $1,895.1 million, missing the consensus mark of $1,916 million but increasing 1.9% from the year-ago level.
Daily sales of $29.6 million increased 1.9% year over year in the reported quarter. Fastenal's first-quarter sales were influenced by adverse weather conditions, with a more pronounced negative impact compared to the previous year. While adverse weather reduced sales by 35 to 55 basis points (bps), foreign exchange fluctuations had negligible effects on sales, a contrast to the 70 bps reduction observed in 2023.
However, the company saw increased unit sales in 2024, driven by growth with larger customers and recent Onsite locations. While weather conditions posed challenges, Fastenal's strategic initiatives and stable pricing contributed to its sales performance in the first quarter of 2024.
On a monthly basis, daily sales improved 1.8%, 2.6% and 1.6% in March, February and January 2024, respectively, year over year.
Daily sales of Fastener products (mainly used for industrial production and accounted for approximately 31.5% of first-quarter sales) declined 4.4% year over year. Sales of safety products (21.6%) grew 8.3% on a daily basis. Sales of the Other product lines (46.9%) grew 3.9% year over year.
On an end-market basis, daily sales of Heavy manufacturing (which accounted for approximately 43.4% of first-quarter sales) rose 2.7% year over year. Sales of Other manufacturing (31.6%) grew 2.5% on a daily basis. Sales of Non-residential construction (8.5%) fell 6.6% on a daily basis. Sales of Reseller (5.7%) declined 2.5%, while that of Other (10.8%) increased 7.7% year over year.
Daily sales through weighted FMI devices grew 12.4% for the first quarter and represented 41.5% of net sales.
Daily sales to national account customers (which represented 62% of total first-quarter net sales) increased 6.3% on a year-over-year basis. Daily sales to non-national account customers (which include government customers and represent 38% of total quarterly revenues) declined 4.5% from the prior-year quarter.
The company’s digital footprint increased to 59.2% of sales in the first quarter of 2024 from 54.1% of sales in the year-ago period.
Fastenal Company Price, Consensus and EPS Surprise
Fastenal signed 102 new Onsite locations during the first quarter. As of Mar 31, 2024, the company had 1,872 active sites, up 11.8% from the year-ago period. Daily sales through Onsite locations (excluding sales transferred from branches to new Onsite) increased at a low-single-digit rate year over year. This was backed by strong contributions from Onsite locations, which were activated and implemented over the last 12 months and continued growth from older Onsite locations.
For 2024, the company still expects 375-400 annual Onsite signings.
Margins
Gross margin was 45.5% in the reported quarter, down 20 bps year over year. This was due to the negative effect of customer and product mix. This was partly offset by modestly positive price-cost dynamics as well as favorable leverage of organizational/overhead costs.
Operating margin came in at 20.6%, down 60 bps from a year ago.
Financials
As of Mar 31, 2024, cash and cash equivalents were $237.1 million, up from $221.3 million on Dec 31, 2023. The long-term debt at the first-quarter end was $200 million, which remained the same from 2023-end. During the quarter, FAST returned $223.2 million to its shareholders in the form of dividends.
During the quarter, cash provided by operating activities totaled $335.6 million, down 13.6% from the year-ago period.
Zacks Rank
Fastenal currently carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Some other top-ranked stocks in the Zacks Retail-Wholesale sector are:
The Zacks Consensus Estimate for GPS’ fiscal 2024 sales and EPS implies a decline of 0.3% and 4.9%, respectively, from the year-ago levels.
Brinker International, Inc. (EAT - Free Report) carries a Zacks Rank #2, at present. It has a trailing four-quarter earnings surprise of 212.7% on average. Shares of EAT have gained 31.2% in the past year.
The Zacks Consensus Estimate for EAT’s 2024 sales and EPS indicates 4.9% and 30.4% growth, respectively, from the year-ago levels.
Builders FirstSource, Inc. (BLDR - Free Report) currently carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 40.6%, on average. Shares of BLDR have surged 101.4% in the past year.
The Zacks Consensus Estimate for BLDR’s 2024 EPS has increased to $13.84 from $12.95 over the past 60 days.
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Fastenal (FAST) Q1 Earnings & Sales Miss Estimates, Shares Down
Fastenal Company’s (FAST - Free Report) shares lost more than 5.7% in the pre-market trading session on Apr 11, 2024, after it reported first-quarter 2024 results. Earnings and net sales missed the Zacks Consensus Estimate. The adverse weather conditions and the impact of customer and product mix have affected Fastenal's quarterly results.
Earnings & Sales in Detail
The company reported earnings per share (EPS) of 52 cents, which missed the consensus mark by a penny and remained flat from the year-ago period.
Net sales totaled $1,895.1 million, missing the consensus mark of $1,916 million but increasing 1.9% from the year-ago level.
Daily sales of $29.6 million increased 1.9% year over year in the reported quarter. Fastenal's first-quarter sales were influenced by adverse weather conditions, with a more pronounced negative impact compared to the previous year. While adverse weather reduced sales by 35 to 55 basis points (bps), foreign exchange fluctuations had negligible effects on sales, a contrast to the 70 bps reduction observed in 2023.
However, the company saw increased unit sales in 2024, driven by growth with larger customers and recent Onsite locations. While weather conditions posed challenges, Fastenal's strategic initiatives and stable pricing contributed to its sales performance in the first quarter of 2024.
On a monthly basis, daily sales improved 1.8%, 2.6% and 1.6% in March, February and January 2024, respectively, year over year.
Daily sales of Fastener products (mainly used for industrial production and accounted for approximately 31.5% of first-quarter sales) declined 4.4% year over year. Sales of safety products (21.6%) grew 8.3% on a daily basis. Sales of the Other product lines (46.9%) grew 3.9% year over year.
On an end-market basis, daily sales of Heavy manufacturing (which accounted for approximately 43.4% of first-quarter sales) rose 2.7% year over year. Sales of Other manufacturing (31.6%) grew 2.5% on a daily basis. Sales of Non-residential construction (8.5%) fell 6.6% on a daily basis. Sales of Reseller (5.7%) declined 2.5%, while that of Other (10.8%) increased 7.7% year over year.
Daily sales through weighted FMI devices grew 12.4% for the first quarter and represented 41.5% of net sales.
Daily sales to national account customers (which represented 62% of total first-quarter net sales) increased 6.3% on a year-over-year basis. Daily sales to non-national account customers (which include government customers and represent 38% of total quarterly revenues) declined 4.5% from the prior-year quarter.
The company’s digital footprint increased to 59.2% of sales in the first quarter of 2024 from 54.1% of sales in the year-ago period.
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 first quarter. As of Mar 31, 2024, the company had 1,872 active sites, up 11.8% from the year-ago period. Daily sales through Onsite locations (excluding sales transferred from branches to new Onsite) increased at a low-single-digit rate year over year. This was backed by strong contributions from Onsite locations, which were activated and implemented over the last 12 months and continued growth from older Onsite locations.
For 2024, the company still expects 375-400 annual Onsite signings.
Margins
Gross margin was 45.5% in the reported quarter, down 20 bps year over year. This was due to the negative effect of customer and product mix. This was partly offset by modestly positive price-cost dynamics as well as favorable leverage of organizational/overhead costs.
Operating margin came in at 20.6%, down 60 bps from a year ago.
Financials
As of Mar 31, 2024, cash and cash equivalents were $237.1 million, up from $221.3 million on Dec 31, 2023. The long-term debt at the first-quarter end was $200 million, which remained the same from 2023-end. During the quarter, FAST returned $223.2 million to its shareholders in the form of dividends.
During the quarter, cash provided by operating activities totaled $335.6 million, down 13.6% from the year-ago period.
Zacks Rank
Fastenal currently carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Some other top-ranked stocks in the Zacks Retail-Wholesale sector are:
The Gap, Inc. (GPS - Free Report) currently sports a Zacks Rank of 1 (Strong Buy). It has a trailing four-quarter earnings surprise of 180.9%, on average. The stock has risen 141.5% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GPS’ fiscal 2024 sales and EPS implies a decline of 0.3% and 4.9%, respectively, from the year-ago levels.
Brinker International, Inc. (EAT - Free Report) carries a Zacks Rank #2, at present. It has a trailing four-quarter earnings surprise of 212.7% on average. Shares of EAT have gained 31.2% in the past year.
The Zacks Consensus Estimate for EAT’s 2024 sales and EPS indicates 4.9% and 30.4% growth, respectively, from the year-ago levels.
Builders FirstSource, Inc. (BLDR - Free Report) currently carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 40.6%, on average. Shares of BLDR have surged 101.4% in the past year.
The Zacks Consensus Estimate for BLDR’s 2024 EPS has increased to $13.84 from $12.95 over the past 60 days.