Fastenal Q3 Earnings: Revenue And EPS Beat, Sets Cautious Tone On 2024 Outlook

Fastenal Company FAST shares are trading higher after the company reported better-than-expected third-quarter results.

Fastenal reported sales growth of 3.5% year-over-year to $1.910 billion, beating the consensus of $1.908 billion. Unit sales increased in the quarter due to growth from larger customers, new Onsite locations, and an extra selling day, despite minor disruptions from Hurricane Helene and stable pricing.

Weighted FASTBin/FASTVend signings (MEUs) rose 22% Y/Y to 7,281; Weighted FASTBin/FASTVend installations rose 11.8% Y/Y.

In the third quarter, FAST’s Digital Footprint represented 61.1% of sales, an increase from 57.1% a year ago.

The gross margin contracted to 44.9% from 45.9%, primarily due to unfavorable customer and product mix, higher import duties, lack of a prior year’s shipper rebate, and lower supplier rebates.

Operating income was $388.1 million (+0.4% Y/Y), and the margin was 20.3%, a decline from 21.0% in the same quarter of 2023.

Related: Fastenal Gears Up For Q3 Print; Here Are The Recent Forecast Changes From Wall Street’s Most Accurate Analysts

The company’s third-quarter EPS was $0.52, above the estimate of $0.51.

Fastenal’s operating cash flow for the quarter was $296.9 million, a decrease of 23.5% year over year. This represented 99.6% of the period’s net income versus 131.3% in the third quarter of 2023.

The company held cash and equivalents of $291.2 million as of September-end.

The company did not repurchase any common stock in the first nine months of 2024 or 2023.

Total debt decreased to $240.0 million (6.3% of total capital) at the end of the quarter from $260 million a year ago.

The company signed 93 new Onsite locations in the third quarter, resulting in 302 year-to-date signings. Active Onsite locations rose 11.7% to 1,986.

Outlook: For 2024, Fastenal’s goal for Onsite signings remains between 375 to 400, although the lower half of this range seems most likely given the pace of signings through the third quarter.

Price Action: FAST shares are trading higher by 4.44% at $73.10 premarket at the last check Friday.

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