Fastenal Gears Up to Report Q4 Earnings: Things to Keep in Mind

Earnings Report and Estimates - Fastenal Company (FAST) is scheduled to report fourth-quarter 2024 results on Jan 17 [1] - The Zacks Consensus Estimate for earnings per share is 48 cents, indicating 4.4% growth from the year-ago level [3] - The consensus mark for revenues is $1.85 billion, a 5$1.76 billion [3] - The company's model predicts overall daily sales of $29.4 million for Q4, a 3.4$29.5 million, improving from 2.8% growth in October 2024 [5] Sales and Market Performance - Manufacturing sales improved 11.2% (Heavy Manufacturing and Other Manufacturing) and 8% year-over-year in November and October 2024, respectively [6] - Non-residential construction declined 1.7% in November and 4.9% in October 2024 [6] - Fastener sales were up 0.1% in November and down 2% in October 2024 [6] - Safety sales increased 5.5% in November compared with 5.8% growth in October 2024 [6] - Other categories improved 5.2% in November and 5.1% in October 2024 [6] Key Growth Drivers - Improving manufacturing markets are likely to contribute to the company's top line [4] - Factors favoring sales growth include a significant number of large customers, a strong digital strategy, a balanced mix of onsite and offsite services, and market share gains across various product categories [4] - A change in national account strategy is expected to contribute positively [4] Margins and Expenses - The gross margin for Q4 is expected to be 44.7%, down from 45.5% in the year-ago figure [8] - Total operating expenses are expected to increase 1.8% to $453.7 million in Q4 from a year ago [8] - Headwinds include negative impacts from customer and product mix, higher import duties (particularly in Mexico), reduced supplier rebates, lower product purchases, and rising employee and occupancy-related expenses [7] Earnings ESP and Zacks Rank - Fastenal has an Earnings ESP of 0.00% and carries a Zacks Rank 3 [10] - The combination of a positive Earnings ESP and a Zacks Rank 1, 2, or 3 increases the odds of an earnings beat, which is not the case here [9] Comparison with Other Companies - Aspen Aerogels (ASPN) has an Earnings ESP of +53.12% and a Zacks Rank 3, with earnings expected to grow 1,000% year-over-year [11][12] - Advance Auto Parts (AAP) has an Earnings ESP of +13.32% and a Zacks Rank 3, with earnings expected to decline 145.8% year-over-year [12] - Deckers Outdoor Corporation (DECK) has an Earnings ESP of +12.67% and a Zacks Rank 1, with earnings expected to decrease 1.2% year-over-year [13]