July 25, 2024

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Fastenal’s (FAST) Average Daily Sales Increase 9% in August

Fastenal Company FAST recently released its August sales report, wherein average daily sales or ADS grew 9% to $24.1 million compared with 9.7% growth registered in July 2021 and 2.5% in the year-ago period. Daily sales on a seasonal basis were up 3.1% compared with the company’s benchmark (historical five-year average) of 3.3%. Issues like price inflation, supply chain challenges and shortage of labor are negatively impacting its growth rate.


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Although August sales have moderated sequentially in its major end markets and key product categories, safety products registered improvements.

Meanwhile, Fastenal’s overall August sales of $531.1 million were up 14.2% year over year. For July, net sales growth was 4.7% for the company.

End-Market Perspective, Product Lines & Customers

From an end-market perspective, manufacturing sales improved 19.7% for the month against a 5% decline a year ago. Non-residential construction grew 10.1% versus a 13.7% decrease reported in August 2020. The average daily sales growth rate in non-residential improved sequentially in August, while that of manufacturing end markets declined.

Fastenal derives sales from Fasteners, Safety and other product lines. Fasteners witnessed 18.9% growth in sales last month versus a 7.3% decline registered in the year-ago period. The monthly sales data reflects that fasteners sales trend has decreased. The figure was up 24.4% in June, 22.3% in July and 18.9% in August. Safety products declined 3.8% in August, much narrower than the 5.4% decline in July. In the year-ago period, safety categories improved 35.1%.

In terms of customer/channel, National account daily sales growth advanced 17% in August from a year ago, given the fact that 77% of the top 100 accounts and 65.7% of public branches are expanding. Yet, non-national accounts were down 1% year over year for the month. In the year-ago period, daily sales growth in non-national accounts was 6% year over year.

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Shares of the company have gained 10.4% so far this year, underperforming the industry’s 20.8% growth. The above-mentioned headwinds have been offsetting the benefits from its growth initiatives such as mobility and branch optimization. We believe this Zacks Rank #3 (Hold) company — which shares space with Beacon Roofing Supply, Inc. BECN, Builders FirstSource, Inc. BLDR and Tecnoglass Inc. TGLS in the same industry — is well positioned to navigate through these challenges with the onsite branch business. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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