Why Industrial And Construction Supplies Distributor Fastenal's Shares Are Gaining Today

Fastenal Company FAST reported third-quarter FY23 sales growth of 2.4% Y/Y to $1.845 billion, marginally missing the consensus of $1.85 billion.

The company's net daily sales growth increased 4% YoY. The company experienced higher unit sales primarily due to growth at its Onsite locations, particularly those opened in the last two years.

The impact of product pricing on net sales in the quarter was modestly positive, consistent with historical trends, versus the impact of product pricing on net sales in the 2022 third quarter of 550 to 580 basis points.

Q3 EPS was $0.52, beating the consensus of $0.50.

The gross margin remained unchanged at 45.9% due to the negative impact of customer and product mix on the company's gross profit percentage.

Operating income was $386.7 million (+2% Y/Y), and the margin was 21%.

Q3 Weighted FASTBin/FASTVend signings (MEUs) rose 15.1% Y/Y to 5,969.

Fastenal's operating cash flow for the quarter was $388.1 million, compared to $257.9 million a year ago.

Total debt was $260 million at the end of the quarter, or 7% of total capital. It held cash and equivalents of $297.5 million as of September 30, 2023.

Dividend: The company declared a dividend per share of $0.35, payable November 24, 2023, to shareholders of record on October 26, 2023.

The company signed 93 new Onsite locations in the quarter, resulting in 268 year-to-date signings. FAST had 1,778 active sites on September 30, 2023, which represented an increase of 13.5% YoY. It expects 350 annual signings for 2023.

For 2023, the company's goal for weighted FASTBin and FASTVend device signings remains at 23,000 to 25,000 MEUs.

Price Action: FAST shares are trading higher by 4.12% at $58.32 premarket on Thursday.