Fastenal Shares Slide 5% After Revenue Miss Despite In-Line Earnings

Core Viewpoint - Fastenal Company reported fourth-quarter earnings that met analyst expectations but had revenue slightly below forecasts, resulting in a more than 5% decline in shares intra-day Financial Performance - Earnings per share for the quarter ended December 31, 2025, were $0.26, aligning with consensus estimates [2] - Revenue reached $2.03 billion, slightly missing expectations of $2.04 billion, but still showing an 11.1% increase year-over-year [2] Operational Insights - Improved customer contract signings since early 2024 helped offset ongoing softness in industrial production [3] - Unit sales growth was driven by an increase in customer locations spending at least $10,000 per month [3] - Product pricing contributed between 310 and 340 basis points to net sales growth during the quarter [3] Margin Analysis - Gross margin decreased to 44.3% from 44.8% a year earlier due to higher cost of goods sold and timing of supplier rebates [4] - Operating margin improved slightly to 19.0% from 18.9% in the prior-year period [4] Product Performance - Direct product sales, including fasteners and hardware, increased by 13.1% year-over-year, outpacing indirect product growth [4] - Manufacturing customers were a significant driver, with a daily sales rate increase of 12.8% [4] Future Outlook - Fastenal plans to increase capital expenditures in 2026 to a range of $310 million to $330 million, up from $230.6 million in 2025, focusing on replacing its Atlanta hub facility and enhancing trucking and IT infrastructure [5]