Fastenal (NASDAQ:FAST), a wholesale distributor based in Winona, Minnesota, reported better-than-expected third-quarter profit, leading to a more than 7% increase in its stock price in morning trading. The company’s strong performance is attributed to increased demand for onsite industrial supplies, including safety gloves, fasteners, and power tools.
Construction companies and other clients maintained a strong demand for onsite industrial supplies during the quarter, as they aimed to complete projects quickly. Fastenal reported a net income of 52 cents per share for the quarter ending on September 30, surpassing analysts’ estimates of 50 cents per share, according to LSEG data.
UBS analyst Chris Snyder noted that the results exceeded expectations, signaling positive momentum in the U.S. industrial sector as September performed better than anticipated, surpassing both July levels and consensus expectations.
Fasteners, which are a core segment of the wholesale distributor’s business, represented 32.1% of the company’s total sales, down from 34.1% in the previous year. In contrast, the heavy manufacturing segment contributed 43.2% of sales, up from 41.3% in the previous year. The company attributed the higher unit sales in the third quarter of 2023 to growth in onsite locations, particularly those opened within the last two years.
Total quarterly revenue for Fastenal reached $1.84 billion, marking a 2.4% increase from the previous year. Analysts had, on average, expected revenue of $1.85 billion for the third quarter. Despite the slight revenue miss, the company’s overall performance exceeded profit expectations, reflecting strong demand for its onsite industrial supplies.
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