It has been about a month since the last earnings report for Fastenal (FAST Quick QuoteFAST - Free Report) . Shares have added about 10.3% in that time frame, outperforming the S&P 500.

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

Fastenal Q3 Earnings Beat on Expense Leverage, Sales Miss Estimates

Fastenal reported mixed third-quarter 2026 results, with earnings beating the Zacks Consensus Estimate and net sales missing the consensus mark. Year over year, however, both metrics grew. Customer contract wins and pricing actions supported growth, while expense leverage helped offset pressure from sales to larger accounts. Contract customer daily sales rose 18.8%, and operating margin expanded 90 basis points (bps) to 21.5%.

Fastenal’s Q3 Earnings & Sales Highlights

Fastenal’s quarterly earnings of 35 cents per share surpassed the Zacks Consensus Estimate by 2.9% and increased 19.8% year over year from 29 cents per share.

Net sales rose 15.5% year over year to $2.46 billion but missed the consensus mark of $2.49 billion by 1%.

FAST's Contract Accounts Drive Sales Gains

Sales benefited from customer contracts signed since the first quarter of 2024 and a modest improvement in industrial production. Product pricing added approximately 240 bps to third-quarter sales growth. Currency movements created a roughly 10-bps headwind. Contract customers accounted for 76.5% of revenues, up from 73.8% a year earlier. Non-contract daily sales increased 7.8%. The number of contracts rose 6.4% to 3,744, with signings weighted toward national multi-site accounts. Average customer sites generating at least $50,000 in monthly sales increased to 3,288 from 2,771. Sales from those sites grew 27.6% to $1.46 billion, highlighting the concentration of growth among larger customers.

Fastenal's Manufacturing Markets Lead Demand

Manufacturing contributed 76.6% of quarterly revenues, with daily sales rising 17.2%. Heavy manufacturing increased 20.2% and accounted for 44.6% of revenues, benefiting from key accounts in aerospace, machined products and industrial equipment. Other manufacturing daily sales advanced 13.2%.

Non-residential construction daily sales grew 12%, marking the sixth consecutive quarter of growth. Other end markets advanced 12.4%, helped by transportation and reseller customers. Total non-manufacturing daily sales increased 12.3%. Direct material daily sales rose 18.6%, outpacing the 14.3% growth in indirect materials. Direct cutting tools and abrasives gained 19.5%, while direct non-fasteners and hardware increased 21.2%.

FAST's Digital Footprint Expands

Digital Footprint sales increased 16.1% to $1.54 billion and represented 61.4% of revenues compared with 61.3% a year ago. This measure includes sales through Fastenal Managed Inventory (FMI) technology and eBusiness transactions excluding overlapping orders. FMI sales grew 14.6% to $1.12 billion, while eBusiness sales climbed 14.8% to $721.5 million. FASTBin and FASTVend sales increased 17.6% to $827.2 million, outpacing overall company growth. Fastenal signed 7,484 weighted FASTBin and FASTVend machine-equivalent units (MEUs), up 6.2%. The installed base reached 143,878 MEUs, up 7.4%, reinforcing its emphasis on automated inventory management.

Fastenal's Expense Leverage Lifts Profitability

Gross profit rose 14.4% to $1.1 billion, but gross margin declined approximately 40 bps to 44.8%. A mix shift toward large customers reduced gross margin by about 50 bps, while pricing relative to costs exerted a roughly 30-bps drag. That price-cost headwind narrowed about 10 bps from the preceding quarter. Sourcing savings, supplier rebates and tariff refunds provided relief. SG&A expenses increased 9.4% to $573.9 million, below revenue growth. As a share of sales, SG&A improved 130 bps to 23.3%, supported by labor productivity and fixed-cost leverage. Operating income climbed 20.2% to $530.8 million, while net income increased 19.7% to $401.6 million.

FAST's Cash Generation Supports Shareholder Returns

Operating cash flow increased 9% year over year to $421.6 million, equaling 105% of net income compared with 115.3% a year ago. Higher receivables and inventory requirements absorbed cash as sales expanded. Year over year, accounts receivable increased 19.9%, inventories rose 3.1% and accounts payable advanced 29.3%.

Free cash flow, a non-GAAP measure, totaled $349.6 million compared with $332.1 million a year earlier. It represented 87.1% of net income, down from 99%. The company returned $328.4 million to shareholders through $298.2 million in dividends and $30.2 million in repurchases. Total debt ended the quarter at $100 million, down from $195 million a year ago.

Fastenal Maintains Capital Plan

Fastenal maintained its fiscal 2026 net capital investment expectation of $310-$330 million compared with $230.6 million in 2025. Spending priorities include replacing the Atlanta hub, improving distribution efficiency, completing delayed IT projects and adding trucking capacity. The company expects an ongoing tax rate of approximately 24.6%, absent discrete tax items or changes to tax law.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, Fastenal has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. 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.