TradingView Do you have a news tip for Investopedia reporters? Please email us at tips@investopedia.com Key Takeaways FAST Fastenal's revenue got a lift even as the distributor of fasteners and other commercial products' CEO said market activity was "challenging." The daily sales rate for non-fastener products increased 4.2% year-over-year. A drop in the daily sales rate for fasteners was less than in the previous quarter. The company said it was encouraged by its efforts to add new customers. Shares of Fas ...

Core Viewpoint - Fastenal's recent earnings report showed a slight miss in earnings per share and revenues, raising concerns about its future performance in the market [1][2][8]. Company Performance - Fastenal reported earnings of $0.51 per share, which was in line with the Zacks Consensus Estimate, but a decrease from $0.52 per share a year ago [8]. - The company's revenues for the quarter ended June 2024 were $1.92 billion, slightly below the Zacks Consensus Estimate by 0.29%, and an increase from $1.88 billion year-over-year [2]. - Fastenal has only surpassed consensus revenue estimates once in the last four quarters [2]. Stock Performance - Fastenal shares have declined approximately 0.9% since the beginning of the year, contrasting with the S&P 500's gain of 17.1% [3]. - The stock currently holds a Zacks Rank of 4 (Sell), indicating expectations of underperformance in the near future [12]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.52 on revenues of $1.93 billion, and for the current fiscal year, it is $2.07 on revenues of $7.61 billion [5]. - The trend of estimate revisions for Fastenal has been unfavorable leading up to the earnings release [12]. Industry Context - Fastenal operates within the Zacks Building Products - Retail industry, which is currently ranked in the bottom 13% of over 250 Zacks industries [13]. - The performance of Fastenal's stock may be influenced by the overall outlook of the industry, as historically, the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [13].

[Performance Summary](index=1&type=section&id=PERFORMANCE%20SUMMARY) For the second quarter of 2024, Fastenal reported a 1.8% year-over-year increase in both net sales and daily sales However, profitability metrics declined, with operating income decreasing by **2.0%** and diluted net income per share falling by **2.0%** to **$0.51** Gross margin contracted from **45.5%** to **45.1%** | | Six-month Period 2024 | Six-month Period 2023 | Change | Three-month Period 2024 | Three-month Period 2023 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net sales** | **$3,811.3 M** | **$3,742.2 M** | **1.8%** | **$1,916.2 M** | **$1,883.1 M** | **1.8%** | | **Gross profit** | **$1,725.1 M** | **$1,707.5 M** | **1.0%** | **$863.5 M** | **$857.5 M** | **0.7%** | | *% of net sales* | **45.3%** | **45.6%** | | **45.1%** | **45.5%** | | | **Operating income** | **$777.1 M** | **$788.1 M** | **-1.4%** | **$386.9 M** | **$394.9 M** | **-2.0%** | | *% of net sales* | **20.4%** | **21.1%** | | **20.2%** | **21.0%** | | | **Net income** | **$590.4 M** | **$593.1 M** | **-0.5%** | **$292.7 M** | **$298.0 M** | **-1.8%** | | **Diluted net income per share** | **$1.03** | **$1.04** | **-0.7%** | **$0.51** | **$0.52** | **-2.0%** | [Quarterly Results of Operations](index=1&type=section&id=QUARTERLY%20RESULTS%20OF%20OPERATIONS) This section details the operational performance for Q2 2024 While sales saw modest growth driven by large customers and Onsite locations, profitability was compressed A lower gross margin, combined with SG&A expenses growing faster than sales, led to a decrease in both operating and net income compared to the prior-year period [Sales](index=1&type=section&id=Sales) Q2 2024 net sales rose **1.8%** to **$1,916.2 million**, driven by higher unit sales to large customers and new Onsite locations This growth was tempered by a **30-60 basis points** decline from product pricing, particularly in fasteners Performance diverged across segments, with manufacturing, non-fastener products, and national accounts showing relative strength compared to non-manufacturing, fasteners, and non-national accounts - Net sales increased **$33.1 million**, or **1.8%**, in Q2 2024, primarily due to unit growth with larger customers and Onsite locations opened in the last two years[1](index=1&type=chunk) - Product pricing negatively impacted net sales by **30-60 basis points**, a reversal from the prior year's **190-220 basis point** increase, reflecting lower fastener and transportation costs[1](index=1&type=chunk) | End Market | DSR Change Q2 2024 vs Q2 2023 | % of Sales Q2 2024 | | :--- | :--- | :--- | | Total manufacturing | **2.7%** | **75.5%** | | Total non-manufacturing | **-1.0%** | **24.5%** | | Product Line | DSR Change Q2 2024 vs Q2 2023 | % of Sales Q2 2024 | | :--- | :--- | :--- | | Total fasteners | **-3.0%** | **31.0%** | | Total non-fasteners | **4.2%** | **69.0%** | | Customer Type | DSR Change Q2 2024 vs Q2 2023 | % of Sales Q2 2024 | | :--- | :--- | :--- | | National accounts | **5.8%** | **62.4%** | | Non-national accounts | **-4.3%** | **37.6%** | [Gross Profit](index=4&type=section&id=Gross%20Profit) The gross profit margin for Q2 2024 decreased to **45.1%** from **45.5%** in Q2 2023 The decline was primarily caused by an unfavorable customer and product mix (stronger growth in lower-margin large accounts and non-fastener products) and short-term supply chain inefficiencies related to warehousing customers - Gross profit margin fell by **40 basis points** to **45.1%** YoY[6](index=6&type=chunk) - Key negative impacts were an unfavorable mix from stronger growth of large customers and non-fastener products, and temporary supply chain inefficiencies Price-cost impact was not meaningful[6](index=6&type=chunk) [SG&A Expenses](index=4&type=section&id=SG%26A%20Expenses) SG&A expenses increased **3.0%** in Q2 2024, representing **24.9%** of net sales compared to **24.6%** in the prior year, indicating cost deleveraging The increase was driven by higher employee base pay, vehicle lease costs, and significant expenses related to a larger-than-expected Customer Expo - SG&A as a percentage of sales increased to **24.9%** from **24.6%** YoY as expense growth outpaced sales growth[52](index=52&type=chunk) - Employee-related expenses, representing **70-75%** of total SG&A, rose **2.4%** due to higher average FTE and wages, partly offset by lower bonuses[52](index=52&type=chunk) - Other SG&A expenses rose **10.1%**, driven by higher vehicle lease costs, Customer Expo expenses, and general insurance[52](index=52&type=chunk) [Operating Income](index=4&type=section&id=Operating%20Income) Operating income margin contracted to **20.2%** in Q2 2024 from **21.0%** in Q2 2023 This decrease was a direct result of the combined impact of lower gross margins and the deleveraging of SG&A expenses | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Operating Income | **$386.9 M** | **$394.9 M** | **-2.0%** | | % of net sales | **20.2%** | **21.0%** | **-80 bps** | [Net Interest, Taxes, and Net Income](index=4&type=section&id=Net%20Interest,%20Taxes,%20and%20Net%20Income) Net interest expense fell sharply to **$0.5 million** from **$2.3 million** YoY, due to higher interest income on cash balances and lower average borrowings The effective tax rate was stable at **24.2%** Consequently, net income decreased by **1.8%** to **$292.7 million**, with diluted EPS at **$0.51** versus **$0.52** in the prior year - Net interest expense decreased to **$0.5M** in Q2 2024 from **$2.3M** in Q2 2023, due to higher interest income and lower interest expense[12](index=12&type=chunk) - The effective tax rate was **24.2%** in Q2 2024, compared to **24.1%** in Q2 2023 The company anticipates an ongoing tax rate of approximately **24.5%**[13](index=13&type=chunk) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Net Income | **$292.7 M** | **$298.0 M** | **-1.8%** | | Diluted EPS | **$0.51** | **$0.52** | **-2.0%** | [Growth Drivers](index=3&type=section&id=Growth%20Drivers) The company's growth is propelled by its digital initiatives and Onsite expansion The Digital Footprint, which includes FMI technology and eBusiness, now constitutes **59.4%** of sales, up from **55.3%** YoY eBusiness sales grew **25.5%**, while Onsite locations increased by **11.9%** to **1,934** active sites The company remains on track with its 2024 signing goals for both Onsites and FMI devices - The Digital Footprint (FMI sales + non-FMI eBusiness sales) represented **59.4%** of sales in Q2 2024, an increase from **55.3%** in Q2 2023[5](index=5&type=chunk) - Daily sales through eBusiness grew **25.5%** in Q2 2024 and represented **28.7%** of total sales eProcurement grew **30.9%** and eCommerce grew **11.6%**[5](index=5&type=chunk) - The company signed **107** new Onsite locations in Q2 2024, reaching a total of **1,934** active sites, an **11.9%** YoY increase The 2024 goal remains **375-400** signings[50](index=50&type=chunk) | FMI Technology | Three-month Period 2024 | Three-month Period 2023 | Change | | :--- | :--- | :--- | :--- | | Weighted FASTBin/FASTVend signings (MEUs) | **7,188** | **6,794** | **5.8%** | | FMI daily sales | **$12.7 M** | **$11.8 M** | **7.0%** | | FMI as % of sales | **41.8%** | **39.8%** | | [Balance Sheet and Cash Flow](index=5&type=section&id=BALANCE%20SHEET%20AND%20CASH%20FLOW) The company maintained a strong balance sheet, reducing total debt by **32.9%** year-over-year to **$235.0 million** Q2 operating cash flow decreased **14.6%** to **$258.0 million**, primarily due to changes in working capital, specifically inventory becoming a use of cash The full-year 2024 capital expenditure forecast was raised to a range of **$235.0M** to **$255.0M** to support strong FMI device signings | Working Capital (as of June 30) | 2024 | 2023 | Dollar Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Accounts receivable, net | **$1,204.8 M** | **$1,171.6 M** | **$33.2 M** | **2.8%** | | Inventories | **$1,504.6 M** | **$1,565.4 M** | (**$60.8 M**) | **-3.9%** | | Accounts payable | **$292.6 M** | **$262.0 M** | **$30.6 M** | **11.7%** | - Total debt was reduced to **$235.0M** at Q2 2024 end (**6.3%** of total capital), compared to **$350.0M** (**9.4%** of total capital) a year prior[11](index=11&type=chunk) - Q2 net cash from operating activities was **$258.0M**, a **14.6%** decrease from Q2 2023, mainly because inventory was a modest use of cash versus a significant source of cash in the prior year[33](index=33&type=chunk)[55](index=55&type=chunk) - The full-year 2024 capex forecast was increased to a range of **$235.0M** to **$255.0M**, up from the original range, driven by higher expected investment in vending devices[10](index=10&type=chunk) - Returned **$223.3M** to shareholders via dividends in Q2 2024 No stock was repurchased in the first half of 2024[11](index=11&type=chunk) [Additional Information (Headcount & Locations)](index=7&type=section&id=ADDITIONAL%20INFORMATION) Total FTE headcount grew **3.0%** year-over-year to **21,249**, with increases focused on supporting Onsite expansion, distribution, and IT The network of in-market locations grew **5.1%** to **3,533** This growth reflects the company's strategic shift towards Onsite locations (up **11.9%** YoY) while the traditional branch network has stabilized after a period of rationalization (down **2.2%** YoY) | Metric (as of Q2 end) | 2024 Q2 | 2023 Q2 | Change Since Q2 2023 | | :--- | :--- | :--- | :--- | | Total personnel - FTE headcount | **21,249** | **20,631** | **3.0%** | | Number of branch locations | **1,599** | **1,635** | **-2.2%** | | Number of active Onsite locations | **1,934** | **1,728** | **11.9%** | | Number of in-market locations | **3,533** | **3,363** | **5.1%** | - The strategic rationalization of the branch network has concluded Future growth in in-market locations is expected to accelerate, driven by continued Onsite openings and a stable or moderately growing branch network[16](index=16&type=chunk) | Activity (Three-month Period) | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Branch openings | **3** | **3** | | Branch closures, net | **4** | (**28**) | | Onsite activations | **96** | **89** | | Onsite closures, net | (**34**) | (**35**) | [Condensed Consolidated Financial Statements](index=9&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section provides the unaudited condensed consolidated balance sheets, statements of income, and statements of cash flows for the three and six-month periods ended June 30, 2024, and 2023 [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2024, the company reported total assets of **$4.60 billion**, supported by **$3.50 billion** in total stockholders' equity Key current assets include **$1.20 billion** in net trade accounts receivable and **$1.50 billion** in inventories | Assets | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total current assets | **$3,146.7 M** | **$3,020.9 M** | | Total assets | **$4,603.5 M** | **$4,462.9 M** | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | **$717.0 M** | **$661.3 M** | | Total liabilities | **$1,107.9 M** | **$1,114.1 M** | | Total stockholders' equity | **$3,495.6 M** | **$3,348.8 M** | | Total liabilities and stockholders' equity | **$4,603.5 M** | **$4,462.9 M** | [Condensed Consolidated Statements of Income](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the three months ended June 30, 2024, the company reported net sales of **$1,916.2 million** and net income of **$292.7 million** For the six-month period, net sales were **$3,811.3 million** and net income was **$590.4 million** | (Amounts in millions) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net sales | **$1,916.2** | **$1,883.1** | | Gross profit | **$863.5** | **$857.5** | | Operating income | **$386.9** | **$394.9** | | Net income | **$292.7** | **$298.0** | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2024, net cash provided by operating activities was **$593.6 million** Net cash used in investing activities was **$101.1 million**, primarily for property and equipment purchases Net cash used in financing activities was **$452.9 million**, dominated by **$446.5 million** in dividend payments | (Amounts in millions) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | **$593.6** | **$690.6** | | Net cash used in investing activities | (**$101.1**) | (**$85.2**) | | Net cash used in financing activities | (**$452.9**) | (**$592.2**) | | Net increase in cash and cash equivalents | **$34.2** | **$13.5** | | Cash and cash equivalents at end of period | **$255.5** | **$243.6** |

Core Insights - Analysts project that 'Weighted FASTBin/FASTVend installations' will reach 118,313, an increase from 107,115 a year ago [1] - The consensus EPS estimate for the quarter has been revised down by 3.1% over the last 30 days, indicating a collective reassessment by analysts [2] - Fastenal is expected to report quarterly earnings of $0.51 per share, reflecting a year-over-year decline of 1.9%, while revenues are anticipated to be $1.93 billion, a 2.4% increase from the previous year [6] Sales and Revenue Metrics - Analysts forecast 'Daily sales' to reach $30.15, up from $29.40 in the same quarter last year [4] - 'Weighted FASTBin/FASTVend signings' are expected to total 7,194, compared to 6,794 in the same quarter of the previous year [5] - The consensus estimate for 'Number of in-market locations' is 3,495, an increase from 3,363 reported last year [8] Branch and Location Metrics - The average prediction for 'Number of branch locations' is 1,578, down from 1,635 a year ago [9] - Analysts expect 'Business days' to be 64.00 days, consistent with the year-ago figure of 64 days [11] - The estimate for 'Number of active Onsite locations' is projected at 1,916, up from 1,728 last year [12] Market Performance - Over the past month, Fastenal shares have returned -1.6%, while the Zacks S&P 500 composite has increased by 5.1% [10]

Group 1: Hockey Stocks Overview - A Canadian team has not won the Stanley Cup since 1993, and the last Canadian team to play in the final was the Montreal Canadiens in 2021, highlighting a long drought for Canadian teams [1] - The article focuses on selecting three hockey-related stocks for long-term investment, specifically companies that are sponsors or benefit from the NHL [1] Group 2: PepsiCo (PEP) - PepsiCo is the official sponsor of the NHL in the U.S. and Canada for various product categories, having extended its sponsorship through 2026, marking nearly two decades of partnership [3] - Over the past three years, PepsiCo's revenue and operating income grew by 9.1% and 8.6%, respectively, with a return on invested capital of 15.9% [4] - The company has a dividend yield of 3.2%, making it an attractive option for dividend investors [5] - In Q1 2024, PepsiCo reported a 1.9% increase in net sales to $1.90 billion, while operating income fell by 0.8% to $390.2 million [6] - Despite slower demand, PepsiCo expects 4% organic growth in 2024, a return to more normal growth rates [15] - Over the past five years, PepsiCo's stock gained only 28%, underperforming the S&P 500 index, which returned 86% [14] Group 3: Madison Square Garden Sports (MSGS) - MSGS's enterprise value is $5.62 billion, which is 43% less than the combined estimated value of its teams, the New York Rangers and the New York Knicks, valued at $9.88 billion [8] - The Dolan family controls 71% of MSGS stock, which contributes to a discount in share price, although the executive chairman has been recognized for enhancing shareholder value [23][20] - MSGS owns the New York Rangers and the New York Knicks, as well as Madison Square Garden, where these teams play [19] Group 4: Fastenal (FAST) - Fastenal has delivered a five-year gain of 97%, outperforming the S&P 500 by 12 percentage points [17] - The company became a Dividend Aristocrat in February, indicating a strong track record of dividend growth [18] - Fastenal is the Official Supply Chain Solutions Partner of the NHL, providing products and services to enhance the game experience [21] - Following its Q1 2024 earnings report, Fastenal's shares dropped by 12%, prompting a director to purchase $229,100 in stock [22]

PM Images Introduction I have good and bad news. The bad news is that a lot of cyclical companies are currently showing stock price weakness, as it seems that the market is recognizing that cyclical growth is unlikely to rebound soon. While we're far from a steep sell-off, industrial stocks have weakened and are now trading roughly 4% below their 52-week highs. Cyclical transportation stocks (XTN), for example, have sold off 15%. VAL Industrial Select Sector SPDR® ETF (XLI) Price % Off High -3.78% SPDR® S&P ...

Did you analyze how Fastenal (FAST) fared in its international operations for the quarter ending March 2024? Given the widespread global presence of this maker of industrial and construction fasteners, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities.In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth pa ...

Fastenal (FAST) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.Over the past month, shares of this maker of industrial and construction fasteners have returned -11.8%, compared to the Zacks S&P 500 composite's -1.7% change. During this period, the Zacks Building Products - Retail industry, which Fastenal falls in, has lost 9.2%. The key question now is: What could be the stock' ...

PART I — FINANCIAL INFORMATION This section provides detailed financial statements and management's analysis of the company's financial condition and operational results for the period [Financial Statements](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for the three months ended March 31, 2024. It includes the Balance Sheets, Statements of Income, Comprehensive Income, Stockholders' Equity, and Cash Flows, along with accompanying notes. The statements show a slight increase in total assets, stable net income and earnings per share year-over-year, and a decrease in cash from operations [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, detailing assets, liabilities, and equity as of March 31, 2024 and December 31, 2023 | Assets & Liabilities (in millions) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total current assets** | $3,083.5 | $3,020.9 | | **Total assets** | **$4,532.7** | **$4,462.9** | | **Total current liabilities** | $637.9 | $661.3 | | **Long-term debt** | $200.0 | $200.0 | | **Total stockholders' equity** | $3,429.2 | $3,348.8 | | **Total liabilities and stockholders' equity** | **$4,532.7** | **$4,462.9** | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Details the company's revenues, expenses, and net income for the three months ended March 31, 2024 and 2023 | Income Statement (in millions, except per share) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net sales | $1,895.1 | $1,859.1 | | Gross profit | $861.6 | $850.0 | | Operating income | $390.2 | $393.2 | | Net income | $297.7 | $295.1 | | Diluted net income per share | $0.52 | $0.52 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Reports comprehensive income, including net income and other comprehensive income items, for the three months ended March 31, 2024 and 2023 - Comprehensive income for Q1 2024 was **$285.8 million**, a decrease from **$299.4 million** in Q1 2023 The decline was primarily due to a negative foreign currency translation adjustment of **$11.9 million** in 2024 compared to a positive adjustment of **$4.3 million** in the prior year[14](index=14&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Outlines changes in stockholders' equity, including net income and dividends, for the three months ended March 31, 2024 and 2023 - Total stockholders' equity increased to **$3,429.2 million** at the end of Q1 2024 from **$3,270.6 million** in Q1 2023 The company paid cash dividends of **$0.39 per share** in Q1 2024, an increase from **$0.35 per share** in Q1 2023[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2024 and 2023 | Cash Flow Activity (in millions) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $335.6 | $388.5 | | Net cash used in investing activities | ($48.4) | ($31.0) | | Net cash used in financing activities | ($267.4) | ($348.9) | | Net increase in cash and cash equivalents | $15.8 | $9.7 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides additional details and explanations for the financial statements, including revenue breakdowns and debt information Revenue by Geography (Q1 2024) | Geography | Revenue (in millions) | % of Total | | :--- | :--- | :--- | | United States | $1,578.9 | 83.3% | | Canada and Mexico | $255.6 | 13.5% | | All other foreign | $60.6 | 3.2% | Revenue by End Market (Q1 2024) | End Market | % of Sales | | :--- | :--- | | Manufacturing | 75.0% | | Non-residential construction | 8.5% | | Other | 16.5% | - On April 10, 2024, the board of directors declared a quarterly dividend of **$0.39 per share**, payable on May 23, 2024[28](index=28&type=chunk) - As of March 31, 2024, the company had **$200.0 million** in aggregate principal amount of senior unsecured promissory notes outstanding[39](index=39&type=chunk)[42](index=42&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=14&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the financial results for Q1 2024, highlighting a 1.9% increase in net sales driven by higher unit sales, particularly with larger customers and Onsite locations. The report details performance by product line and end market, noting a divergence between fastener and non-fastener products. Gross margin slightly decreased to 45.5% due to customer and product mix, while SG&A expenses increased as a percentage of sales. The discussion also covers growth drivers like FMI and eCommerce, and provides an analysis of liquidity and capital resources [Executive Overview](index=14&type=section&id=Executive%20Overview) Summarizes key financial and operational highlights for Q1 2024, including sales growth, profit margins, and operational footprint expansion Q1 2024 Performance Summary | Metric | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales (in millions) | $1,895.1 | $1,859.1 | 1.9% | | Gross Profit % | 45.5% | 45.7% | -20 bps | | Operating Income (in millions) | $390.2 | $393.2 | -0.8% | | Operating Income % | 20.6% | 21.2% | -60 bps | | Diluted Net Income per Share | $0.52 | $0.52 | 0.6% | - The company's operational footprint continued to expand, with active Onsite locations increasing by **11.8%** year-over-year to **1,872**, and weighted FMI (Fastenal Managed Inventory) devices growing by **10.5%** to **115,653**[52](index=52&type=chunk) [Results of Operations](index=16&type=section&id=Results%20of%20Operations) Analyzes the drivers of net sales, gross profit, and operating expenses for Q1 2024 compared to the prior year - Net sales increased **1.9%** in Q1 2024, driven by higher unit sales, as the impact from product pricing was not material This compares to a pricing impact of **290 to 320 basis points** in Q1 2023[57](index=57&type=chunk)[58](index=58&type=chunk) Daily Sales Rate (DSR) Change by Product Line (Q1 2024 vs Q1 2023) | Product Line | DSR Change | | :--- | :--- | | Total fasteners | -4.4% | | Safety supplies | 8.3% | | Other product lines | 3.9% | - Gross profit margin decreased slightly to **45.5%** from **45.7%** in Q1 2023, primarily due to a negative customer and product mix, as sales grew faster with large customers and in non-fastener categories which carry lower margins[65](index=65&type=chunk) - SG&A expenses as a percentage of net sales increased to **24.9%** from **24.6%** year-over-year, as slower sales growth led to deleveraging of employee-related expenses[66](index=66&type=chunk) [Growth Drivers](index=18&type=section&id=Growth%20Drivers) Highlights the company's strategic initiatives and their impact on sales growth, including digital footprint and Onsite locations - The company's Digital Footprint (FMI and eCommerce sales) accounted for **59.2%** of total sales in Q1 2024, up from **54.1%** in Q1 2023[64](index=64&type=chunk) - Daily sales through eCommerce grew **33.6%** in Q1 2024 and represented **28.6%** of total sales[63](index=63&type=chunk) - In Q1 2024, the company signed **102 new Onsite locations**, bringing the total active sites to **1,872**, an **11.8%** increase from the prior year[64](index=64&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's cash flow, debt levels, and capital expenditure plans, indicating financial flexibility - Net cash provided by operating activities decreased by **13.6%** to **$335.6 million** in Q1 2024 compared to Q1 2023, partly because inventory reduction slowed as rightsizing efforts are now substantially complete[79](index=79&type=chunk)[80](index=80&type=chunk) - Inventories decreased by **9.4%** year-over-year to **$1,496.3 million**, reflecting progress in reducing stock after the supply chain normalization[82](index=82&type=chunk)[84](index=84&type=chunk) - Total debt was **$200.0 million** at the end of Q1 2024, representing **5.5%** of total capital, down from **$400.0 million** (**10.9%** of total capital) a year prior[91](index=91&type=chunk) - The company expects net capital expenditures for the full year 2024 to be between **$225.0 million** and **$245.0 million**, an increase from **$160.6 million** in 2023[88](index=88&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is exposed to market risks from foreign currency exchange rates, commodity prices (steel, energy), import shipping costs, and interest rates. In Q1 2024, the impact from commodity prices, foreign exchange, and interest rates was immaterial. However, a favorable impact of $5.0M to $10.0M was estimated from lower import shipping costs - The company's primary market risks include import shipping costs, commodity steel and energy prices, foreign currency exchange rates, and interest rates[98](index=98&type=chunk) - The estimated effect on net income from import shipping costs was a favorable **$5.0 to $10.0 million** in Q1 2024[98](index=98&type=chunk) - The impact on net income from commodity steel prices, energy prices, foreign currency fluctuations, and interest rate changes was considered **immaterial** for Q1 2024[99](index=99&type=chunk)[100](index=100&type=chunk)[102](index=102&type=chunk) [Controls and Procedures](index=24&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Based on an evaluation as of March 31, 2024, the principal executive and financial officers concluded that the company's disclosure controls and procedures are effective. There were no material changes in internal control over financial reporting during the quarter - Management, including the principal executive officer and principal financial officer, concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[104](index=104&type=chunk) - There were no changes in internal control over financial reporting during the first quarter of 2024 that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[105](index=105&type=chunk) PART II — OTHER INFORMATION This section covers legal proceedings, risk factors, equity security sales, and other required disclosures [Legal Proceedings](index=25&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company reports no litigation matters that are considered probable or reasonably possible to have a material adverse outcome as of March 31, 2024 - As of March 31, 2024, there were no litigation matters that the company considered to be **probable or reasonably possible** to have a material adverse outcome[43](index=43&type=chunk)[107](index=107&type=chunk) [Risk Factors](index=25&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes from the risk factors previously disclosed in the company's most recent annual report on Form 10-K - There have been no material changes from the risk factors described in the company's most recently filed annual report on Form 10-K[108](index=108&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=25&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company did not repurchase any of its common stock during the first quarter of 2024. As of March 31, 2024, it had remaining authority to repurchase 6.2 million shares under its current authorization Issuer Purchases of Equity Securities (Q1 2024) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2024 | 0 | $0.00 | | February 2024 | 0 | $0.00 | | March 2024 | 0 | $0.00 | | **Total** | **0** | **$0.00** | - As of March 31, 2024, the company had remaining authority to repurchase **6,200,000 shares** under the July 12, 2022 authorization, which has no expiration date[109](index=109&type=chunk) [Other Information](index=25&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No directors or officers adopted, modified, or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements during the first quarter of 2024 - During the fiscal quarter ended March 31, 2024, none of the company's directors or officers adopted, modified, or terminated any contract, instruction, or written plan for the purchase or sale of securities intended to satisfy the conditions of Rule 10b5-1(c)[110](index=110&type=chunk) [Exhibits](index=25&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including certifications under the Sarbanes-Oxley Act and financial statements formatted in Inline XBRL - The exhibits filed with this report include Certifications under Section 302 and 906 of the Sarbanes-Oxley Act, and financial statements formatted in Inline XBRL[112](index=112&type=chunk)

Fastenal (FAST) has been on a downward spiral lately with significant selling pressure. After declining 7.2% over the past four weeks, the stock looks well positioned for a trend reversal as it is now in oversold territory and there is strong agreement among Wall Street analysts that the company will report better earnings than they predicted earlier.Here is How to Spot Oversold StocksWe use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is ov ...