A month has gone by since the last earnings report for Fastenal (FAST Quick QuoteFAST - Free Report) . Shares have lost about 2.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Fastenal due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Fastenal Company before we dive into how investors and analysts have reacted as of late.

Fastenal Q1 Earnings Meet Estimates, Sales Beat

Fastenal Company reported first-quarter 2026 results in which earnings met the Zacks Consensus Estimate, while revenues modestly surpassed expectations. Both metrics increased on a year-over-year basis.

Results were supported by stronger daily sales, driven by customer contract signings and broad-based demand across key end markets, along with favorable contributions from product pricing and foreign exchange.

FAST’s Q1 Revenues & Earnings Performance

Fastenal reported earnings per share (EPS) of 30 cents, in line with the Zacks Consensus Estimate, but up 13.6% year over year from 26 cents in the prior-year quarter. Net income increased 13.8% year over year to $339.8 million.

Net sales rose 12.4% year over year to $2.2 billion in the first quarter of 2026, modestly surpassing the Zacks Consensus Estimate by 0.04%, with both periods reflecting 63 business days. Average daily sales increased to $34.9 million from $31.1 million. Management attributed the performance to improved customer contract signings since the first quarter of 2024, alongside a slight improvement in industrial production during the quarter. Pricing was a notable contributor. Product pricing added roughly 350 bps (basis points) to net sales growth in the period, while foreign exchange provided a benefit of about 60 bps.

Margin Trends: Mixed but Stable

Gross profit increased 11.2% year over year to $982.9 million, but gross margin declined 50 bps to 44.6% from 45.1%. Management cited unfavorable price/cost of about 50 basis points as the primary driver, with additional headwinds from transportation and certain customer rebates. Customer mix also remained a structural pressure as growth skewed toward larger customers with lower gross margins. Selling, general, and administrative expenses were 24.3% of net sales, down from 25% a year ago, supported by productivity-driven leverage, partially offset by higher bonuses and commissions tied to improved business activity. Operating income rose 13.6% year over year to $447.6 million, and operating margin increased to 20.3% from 20.1%.

Segment & Customer Highlights

Fastenal reported solid performance across product categories, with direct materials slightly outpacing indirect materials, supported by strength in manufacturing customers and continued benefits from the fastener expansion project.

Direct materials, which include fasteners, cutting tools and other production-related items, recorded daily sales growth of 13.1% year over year and accounted for 38.8% of net sales, up from 38.7% in the year-ago quarter. Growth was led by direct fasteners and hardware, which rose 13.8% year over year and represented 21% of sales. 

Indirect materials, comprising safety supplies and other MRO-related items, posted daily sales growth of 12.4% and made up 61.1% of net sales, slightly lower than last year.

Fastenal’s manufacturing exposure remained the primary driver. Heavy manufacturing daily sales grew 14.1% year over year and represented 44% of total sales in the first quarter, while other manufacturing grew 9.9% and made up 32.2%. Combined manufacturing end markets accounted for 76.2% of sales during the period.

Outside manufacturing, performance also held up. Non-residential construction daily sales rose 17.2% year over year and represented 8.2% of sales, while other end markets rose 11.3% and contributed 15.6% of the revenue mix.

FAST’s technology-enabled channels continued to scale. Digital Footprint sales rose to $1.37 billion in the quarter, up from $1.21 billion a year ago, and represented 61.5% of total sales. FMI sales increased to $1 billion and accounted for 44.9% of sales, with FASTStock sales of $279.8 million and FASTBin/FASTVend sales of $721.6 million. eBusiness sales were $648.8 million and represented 29.1% of sales.

Balance Sheet & Capital Allocation

FAST ended the first quarter of 2026 with $308.6 million in cash and cash equivalents, up from $276.8 million at the end of 2025. Long-term debt stood at $100 million, unchanged from the prior-year period. Total liquidity remained solid, supported by strong operating cash flow of $378.4 million in the quarter, up 44.3% from the first quarter of 2025 and representing 111.4% of net income compared with 87.8% in the prior-year period. Shareholder returns remained consistent. The company returned $295.7 million through dividends of $275.6 million and share repurchases of $20.1 million during the first quarter.

FAST’s Outlook & Commentary

For 2026, the company expects investment in property and equipment, net of proceeds from sales, to increase year over year. This anticipated growth is driven by higher spending to replace its Atlanta hub facility and enhance picking capacity and efficiency across the hub network, increased investment in trucking and elevated IT spending as previously delayed projects continue into 2026.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

Currently, Fastenal has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Fastenal has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.