Fastenal snapped higher early Friday after narrowly topping third-quarter expectations. The early move scored a powerful breakout, after a 10-month base building effort.
The Winona, Minn.-based company is a supply chain innovator, using technology to assure industrial and construction customers maintain steady inventories of nuts, bolts and other vital basic needs. Its earnings growth slowed in recent quarters, slipping in June for the first time in more than two years.
The company reported a one-penny earnings beat — 52 cents per share vs. views for 51 cents. That was just enough to prevent a second earnings slip. Revenue came in at $1.91 billion. Analysts expected $1.9 billion.
The company said results would have been as much as 25 basis points stronger, but Hurricane Helene dented sales in Fastenal's Southern and Atlantic coast regions.
Fastenal As An Economic Indicator
Because it is a supplier of the most basic needs to manufacturers, heavy industry and construction operations, Fastenal provides some fine-toothed data on economic trends.
During the third quarter, sales of fasteners eased, while more safety supplies and other products moved. The company read the shift as a slowing of demand among manufacturing customers, while sales to warehousing customers picked up speed.
Another factor were Fastenal's national customers vs. non-national accounts. The company describes national customers as those with significant revenue potential and a national, multisite contract. Non-nationals include large regional customers, small local customers, and government customers.
Daily sales rates for non-nationals decreased more than 4% during the quarter. Sales to nationals rose 5.6%.
That left nationals as 63.6% of overall revenue at the end of the quarter, vs. 60.8% a year earlier. Non-nationals dipped to 36.4% of revenue, from 39.2% in Q3 2023.
Fastenal Stock
Fastenal stock jumped more than 7% in morning trade Friday. The very strong volume gain lifted the stock well into a buy zone, above a handle entry at 72.49.
After a big first-quarter advance, Fastenal has spent most of the year in base-building mode, carving a 22% deep cup. It spent the last three weeks shaping its downsloping handle.
The stock is now up 16% for the year, after rallying 37% in 2023.
