Financial Performance - Net sales for Q1 2025 were $1,959.4 million, a 3.4% increase from $1,895.1 million in Q1 2024[57] - Daily sales increased by 5.0% to $31.1 million in Q1 2025, compared to $29.6 million in Q1 2024, despite one less business day[62] - Gross profit for Q1 2025 was $883.9 million, representing 45.1% of net sales, down from 45.5% in Q1 2024[57] - Total net sales for the first quarter of 2025 were $101,044, a decrease of 7.3% compared to $109,644 in the first quarter of 2024[68] - Net income for Q1 2025 was $298.7 million, a slight increase of 0.3% compared to $297.5 million in Q1 2024, with diluted net income per share remaining at $0.52[86] Expenses and Profitability - SG&A expenses rose to $490.0 million, accounting for 25.0% of net sales, compared to 24.9% in Q1 2024[57] - Gross profit margin decreased to 45.1% in Q1 2025 from 45.5% in Q1 2024, impacted by customer and product mix, higher fleet and transportation costs, and inflation[71] - SG&A expenses as a percentage of net sales increased to 25.0% in Q1 2025 from 24.9% in Q1 2024, with a 3.9% growth in SG&A compared to a 3.4% growth in net sales[73] - Operating income as a percentage of net sales decreased to 20.1% in Q1 2025 from 20.6% in Q1 2024[83] Cash Flow and Investments - Cash flow from operating activities decreased by 21.8% to $262.2 million in Q1 2025 from $335.6 million in Q1 2024[87] - Net cash provided by operating activities decreased by $73.1 million in Q1 2025 compared to Q1 2024[88] - Net cash used in investing activities increased by $5.5 million in Q1 2025, attributed to higher property and equipment purchases[93] - Net capital expenditures were $53.8 million in Q1 2025, up from $48.3 million in Q1 2024, mainly for facility construction and upgrades[94] - Expected net capital expenditures for 2025 are projected to be between $265.0 million and $285.0 million, an increase from $214.1 million in 2024[95] Customer and Market Growth - The number of $50K+ customer sites grew by 7.4% to 2,502 in Q1 2025, up from 2,340 in Q1 2024[59] - Contract sales increased by 8.5% in Q1 2025, making up 73.1% of total sales, compared to 70.6% in Q1 2024[65] - Total FMI sales increased to $859.0 million in Q1 2025, up 9.5% from $796.7 million in Q1 2024[70] - eBusiness sales grew to $607.6 million in Q1 2025, reflecting a 12.9% increase from $549.3 million in Q1 2024[70] Inventory and Accounts Receivable - Accounts receivable increased by $65.5 million (5.4%) to $1,278.7 million as of March 31, 2025, primarily due to sales growth with larger customers[89][90] - Inventories rose by $177.5 million (11.9%) to $1,673.9 million, driven by projected business growth and stock additions for customer support[89][91] - Trade working capital increased by $243.0 million (9.0%) to $2,952.6 million, reflecting higher accounts receivable and inventory levels[89] Debt and Shareholder Returns - Total debt remained at $200.0 million at the end of Q1 2025, representing 5.1% of total capital, down from 5.5% in Q1 2024[98] - Cash returned to shareholders in the form of dividends was $246.7 million in Q1 2025, compared to $223.2 million in Q1 2024[97] - The company did not repurchase any common stock during either period, maintaining authorization for up to 6,200,000 shares[97] Operational Metrics - Total personnel headcount increased by 2.0% to 24,181 in Q1 2025 from 23,695 in Q1 2024[59] - Daily sales were negatively impacted by currency fluctuations, which reduced sales by approximately 0.5% in Q1 2025[62] - Weighted FASTBin and FASTVend signings were 6,418 in Q1 2025, a decrease of 4.6% from 6,726 in Q1 2024[70] - The company experienced a 2.4% increase in weighted Fastenal Managed Inventory (FMI) devices, totaling 129,996 at the end of Q1 2025[59]

Core Insights - Fastenal is navigating challenges in 2025 better than most, driven by execution and technology [1] - The company has a favorable outlook due to its diversified business model and efforts to mitigate tariffs [2] - Fastenal's business growth and capital returns remain on track, with indicators suggesting a bullish trend [3] Financial Performance - Fastenal reported $1.96 billion in revenue, which is below analysts' estimates but shows a 5% increase in daily sales when adjusted for an extra selling day in the prior year [5] - All business segments grew, with Safety up 7.1%, Other up 6.7%, and core Fasteners up 1.1% [5] - Growth in large, contracted clients was 8.5%, offsetting a decline in smaller clients, while three out of four end markets grew [6] Margins and Profitability - Gross profit grew by 2.6% and operating profit by nearly 1%, providing sufficient cash flow to sustain and improve the balance sheet [7] - Gross margin contracted by only 40 basis points and operating margin by 50 basis points, with losses attributed to the number of selling days [6] Future Outlook - The company remains optimistic without specific guidance for Q2 or the year, expecting pricing actions to add 3% to 4% to revenue [8] - Fastenal plans to expand its FMI footprint, targeting a contribution gain of 700 basis points to approximately 68% of revenue by year-end [8] Dividend and Institutional Support - Fastenal's dividend growth has slowed but remains reliable, with a yield near 2.2% and a payout ratio of about 80% [9] - Institutional buying has ramped up, reaching a multi-year high in Q1 2025, which is expected to support the stock's uptrend [10] Analyst Sentiment - Analyst consensus assumes fair value near $77.50, with a high-end range aligning with current all-time high stock prices [11] - Fastenal currently holds a Hold rating among analysts, with some suggesting other stocks may be better buys [12]

Core Insights - Fastenal Company's first-quarter 2025 adjusted earnings met the Zacks Consensus Estimate and remained flat year over year, while net sales exceeded expectations and grew year over year [1][3]. Financial Performance - Earnings per share (EPS) was reported at 52 cents, aligning with the consensus estimate, while net sales reached $1.96 billion, surpassing the consensus mark of $1.95 billion by 0.5% and increasing by 3.4% from the previous year [3]. - Daily sales averaged $31.1 million, reflecting a 5% year-over-year increase despite one less selling day [4]. - The gross margin for the quarter was 45.1%, down 40 basis points year over year, attributed to an unfavorable customer/product mix and higher fleet/freight costs [10]. Sales Breakdown - Daily sales of Fasteners, which accounted for approximately 30.3% of net sales, increased by 1.1% year over year. Sales of Safety Supplies (22% of net sales) grew by 7.1%, while Other Product Lines (47.7%) saw a 6.7% increase [5]. - Daily sales in Heavy Manufacturing, which represented about 43.4% of net sales, rose by 4.8% year over year, while Other Manufacturing (33% of net sales) grew by 9.7% [5]. Customer Engagement - The number of customer sites spending $10K or more per month with Fastenal contributed to unit sales growth, although overall customer sites declined in both manufacturing and non-manufacturing segments [4][8][9]. - The company's Digital Footprint increased to 61% of sales from 59.2% in the previous year, with expectations to reach 66-68% by 2025 [7]. Operational Metrics - Selling, general and administrative expenses as a percentage of net sales rose to 25% from 24.9% year over year, influenced by one less selling day and increased employee compensation [11]. - Operating margin was reported at 20.1%, slightly below the projected 20.4%, down 50 basis points from the previous year [12]. Cash Flow and Shareholder Returns - As of March 31, 2024, Fastenal had cash and cash equivalents of $231.8 million, a decrease from $255.8 million at the end of 2023. The company returned $246.7 million to shareholders in dividends during the quarter [13].

2025 FIRST QUARTER INVESTOR TELECONFERENCE APRIL 11, 2025 1 SAFE HARBOR STATEMENT All statements made herein that are not historical facts (e.g., future operating results, long-term share gains, and business activity, as well as expectations regarding operations, including gross and operating income margin, future inventory levels, pricing, weighted FMI device signings, operating costs (including SG&A), capital expenditures, sales through our digital footprint, cash flow generation, the potential impact of ...

Core Insights - Fastenal reported revenue of $1.96 billion for the quarter ended March 2025, marking a year-over-year increase of 3.4% and a surprise of +0.63% over the Zacks Consensus Estimate of $1.95 billion [1] - The company's EPS for the same period was $0.52, unchanged from the previous year, indicating no EPS surprise [1] Financial Performance Metrics - Fastenal's shares have returned +2.9% over the past month, contrasting with the Zacks S&P 500 composite's -6.1% change, suggesting relative outperformance [3] - The company had 63 business days in the quarter, slightly below the estimated 63.17 days [4] - Daily sales were reported at $31.10, lower than the average estimate of $31.51 [4] - The number of branch locations was 1,587, slightly above the two-analyst average estimate of 1,583 [4] - Weighted FASTBin/FASTVend signings were 6,418, below the estimated 7,281 [4] - Weighted FASTBin/FASTVend installations at the end of the period totaled 129,996, slightly above the average estimate of 129,887 [4]

Financial Data and Key Metrics Changes - Sales in Q1 2025 grew by approximately 3.5%, with daily sales growth at about 5% due to one less selling day [22][54] - Operating margin for Q1 2025 was 20.1%, down 50 basis points year-over-year, while gross margin was 45.1%, down 40 basis points from the previous year [63][64] - Earnings per share (EPS) for Q1 2025 remained flat at 52 cents compared to Q1 2024 [68] Business Line Data and Key Metrics Changes - Fastenal's fastener segment saw its first quarter of growth since Q1 2023, indicating a recovery in manufacturing end markets [56] - The company reported a 12.5% growth in the number of FMI devices deployed, totaling approximately 130,000 devices [45] - Safety sales growth was nearly 10% in March, attributed to effective execution and the FMI process [45] Market Data and Key Metrics Changes - The marketplace remains sluggish, with customer tone shifting to a plateau due to trade policy uncertainties [55] - Approximately 15% of Fastenal's revenue comes from Canada and Mexico, where sourcing strategies are being adjusted to mitigate tariff impacts [34] Company Strategy and Development Direction - Fastenal is focusing on diversifying its supply chain and enhancing direct sourcing capabilities to manage costs and improve customer relationships [60][89] - The company aims to increase its digital sales footprint to 66-68% of total sales by October 2025 [45] - Fastenal is investing in technology and infrastructure to support growth, including higher capital spending for FMI devices and IT projects [71] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about future growth, citing improved sentiment and internal momentum despite external uncertainties [62] - The company anticipates that pricing actions taken in April could contribute 3-4% to revenue in Q2 2025, with potential for further increases in the second half of the year [60][134] - Fastenal's historical ability to gain market share during disruptions is expected to continue, supported by a nimble sales force and strong supply chain resources [62] Other Important Information - The company increased its dividend from 43 to 44 cents, aiming to surpass a billion in regular dividends for the first time [42] - Fastenal's accounts receivable increased by 5.4%, while inventories rose by 11.9% to improve product availability [69][70] Q&A Session Summary Question: Discussion on tariffs and customer contracts - Management confirmed that customer contracts allow for price adjustments in response to tariffs, emphasizing the importance of sourcing options [78][84] Question: Impact of unprecedented tariff increases - Management acknowledged the challenges posed by high tariffs but highlighted their direct sourcing capabilities and inventory buffers to manage costs effectively [95][100] Question: SG&A expenses and freight costs - Management discussed elevated freight expenses and the ongoing vehicle fleet upgrades, indicating expectations for SG&A leverage in upcoming quarters [111][115] Question: Customer site disaggregation between manufacturing and non-manufacturing - Management clarified that the distinction lies more in the services utilized rather than the manufacturing status, with larger customers benefiting more from Fastenal's solutions [124][126]

Company Performance - Fastenal reported quarterly earnings of $0.52 per share, matching the Zacks Consensus Estimate, and unchanged from the previous year [1] - The company posted revenues of $1.96 billion for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 0.63% and up from $1.9 billion a year ago [2] - Over the last four quarters, Fastenal has not surpassed consensus EPS estimates and has topped revenue estimates only once [2] Stock Outlook - Fastenal shares have increased approximately 5.4% since the beginning of the year, contrasting with a -10.4% decline in the S&P 500 [3] - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $0.55 for the coming quarter and $2.16 for the current fiscal year [4][7] - The current Zacks Rank for Fastenal is 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Building Products - Retail industry, to which Fastenal belongs, is currently ranked in the bottom 7% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of Fastenal's stock may be influenced by the overall outlook for the industry [8]

Financial Performance - Net sales for the first quarter of 2025 reached $1,959.4 million, a 3.4% increase compared to $1,895.1 million in the first quarter of 2024[3] - Daily sales increased by 5.0% to $31.1 million in the first quarter of 2025, up from $29.6 million in the same period last year[4] - Gross profit for the quarter was $883.9 million, representing 45.1% of net sales, slightly down from 45.5% in the previous year[3] - Operating income increased to $393.9 million, or 20.1% of net sales, compared to $390.2 million and 20.6% in the first quarter of 2024[3] - Net income rose to $298.7 million, a 0.3% increase from $297.7 million year-over-year[3] Customer Metrics - The number of customer sites spending $10K or more per month increased, contributing to unit sales growth in the first quarter of 2025[5] - Sales from contract customers grew by 8.5%, accounting for 73.1% of total sales, while non-contract sales declined by 3.6%[6] - The fastener product line saw a 1.1% increase in sales, marking the first growth after seven consecutive quarters of flat or declining performance[6] Product and Service Initiatives - Fastenal signed 6,418 weighted FASTBin and FASTVend devices in the first quarter of 2025, with a goal of 28,000 to 30,000 MEUs for the year[10] - Weighted FASTBin/FASTVend installations increased by 12.4% to 129,996 MEUs at the end of Q1 2025 compared to Q1 2024[11] Financial Ratios and Margins - Gross profit margin decreased to 45.1% in Q1 2025 from 45.5% in Q1 2024, impacted by customer mix and increased transportation costs[12] - SG&A expenses as a percentage of net sales increased to 25.0% in Q1 2025 from 24.9% in Q1 2024, with a 3.9% growth in SG&A expenses[14] Cash Flow and Working Capital - Net cash provided by operating activities decreased by 21.8% to $262.2 million in Q1 2025 compared to Q1 2024[22] - Accounts receivable increased by 5.4% to $1,278.7 million as of March 31, 2025, compared to March 31, 2024[23] - Inventories increased by 11.9% to $1,673.9 million as of March 31, 2025, compared to March 31, 2024[23] - Cash and cash equivalents decreased to $231.8 million from $255.8 million at the end of 2024[38] Debt and Equity - Total debt remained at $200.0 million at the end of Q1 2025, representing 5.1% of total capital[30] - Total stockholders' equity increased to $3,690.3 million as of March 31, 2025, compared to $3,616.3 million at the end of 2024[38] Future Investments - The company plans to invest between $265.0 million and $285.0 million in property and equipment in 2025, up from $214.1 million in 2024[28]

Core Viewpoint - Fastenal Company is set to release its first-quarter earnings results on April 11, with expectations of stable earnings per share and revenue growth compared to the previous year [1]. Financial Performance - Analysts anticipate Fastenal will report quarterly earnings of 52 cents per share, unchanged from the same period last year [1]. - The projected quarterly revenue is $1.95 billion, reflecting an increase from $1.9 billion a year earlier [1]. - In a previous report on January 17, Fastenal's sales grew by 3.7% year-over-year to $1.825 billion, which was below the consensus estimate of $1.844 billion [2]. Stock Performance - Fastenal shares experienced a 7.4% increase, closing at $76.47 on Wednesday [3]. Analyst Ratings - William Blair analyst Ryan Merkel upgraded Fastenal from Market Perform to Outperform on March 10, 2025, with a 65% accuracy rate [7]. - Jefferies analyst Stephen Volkmann maintained a Hold rating but raised the price target from $74 to $85 on December 6, 2024, with a 71% accuracy rate [7]. - UBS analyst Amit Mehrotra assumed a Neutral rating and increased the price target from $71 to $88 on November 13, 2024, achieving a 75% accuracy rate [7]. - Morgan Stanley analyst Chris Snyder maintained an Equal-Weight rating and raised the price target from $72 to $76 on October 14, 2024, with a 66% accuracy rate [7]. - Baird analyst David Manthey maintained a Neutral rating and increased the price target from $67 to $80 on October 14, 2024, with a 74% accuracy rate [7].

Core Viewpoint - Analysts project that Fastenal (FAST) will report quarterly earnings of $0.52 per share, indicating no change year over year, with revenues expected to reach $1.94 billion, reflecting a 2.5% increase from the same quarter last year [1] Earnings Estimates - Over the past 30 days, there has been a downward revision of 0.3% in the consensus EPS estimate for the quarter, indicating a collective reconsideration by covering analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions to the stock, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock price performance [3] Key Metrics Forecast - Analysts predict 'Business days' will total 63.00 Days, down from 64 Days a year ago [5] - 'Daily sales' are expected to reach $30.75, compared to $29.60 in the same quarter last year [5] - The 'Number of in-market locations' is forecasted to be 3,676, up from 3,464 a year ago [5] - 'Weighted FASTBin/FASTVend installations (MEUs; end of period)' are estimated at 129,887, compared to 115,653 last year [6] - The 'Number of active Onsite locations' is expected to reach 2,094, up from 1,872 in the same quarter last year [6] - Analysts forecast 'Number of branch locations' to be 1,583, slightly down from 1,592 reported last year [7] - 'Weighted FASTBin/FASTVend signings (MEUs)' are expected to reach 7,281, compared to 6,726 in the same quarter last year [7] Stock Performance - Fastenal shares have decreased by 9.6% over the past month, while the Zacks S&P 500 composite has declined by 12.2% [7] - Fastenal holds a Zacks Rank 3 (Hold), indicating it is expected to closely follow overall market performance in the near term [7]