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In the last reported quarter, earnings and net sales topped the Zacks Consensus Estimate by 2.4% and 1.2%, respectively. Earnings and net sales increased 10.7% each from the year-ago figures, respectively. Fastenal’s earnings topped the consensus mark in all the last four quarters, with the average being 3.3%.
Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has remained unchanged at 49 cents over the past 60 days. The estimated figure indicates 4.3% growth from the year-ago level. The consensus mark for revenues is pegged at $1.83 billion, suggesting a 7.3% increase from the year-ago reported figure of $1.70 billion.
Sales: Higher manufacturing demand is expected to have generated higher sales on a year-over-year basis for this national wholesale distributor of industrial and construction supplies. Notably, slower international business due to the zero-COVID policy in China and a soft European macro are expected to have weighed on the company’s top line. Construction sales are expected to be weak as Fastenal de-emphasizes walk-in branch sales.
If we go by the latest monthly sales report, February’s average daily sales grew 9.6% to $29.1 million, moderating sequentially. In January 2023, daily sales registered 11.2% growth.
The company has been navigating well through issues like price inflation, supply-chain challenges and a shortage of labor. It has been gaining from all product categories, end markets and customers.
In terms of end markets/products/customers in February and January 2023, manufacturing sales improved by 25.8% and 20.8% from the respective year-ago months. Non-residential construction declined 1.8% in February and 1.7% in January 2023.
Fastener sales were up 8% in February (compared with an 11.6% increase in January 2023). Safety sales increased 3.2% in February compared with 6.2% growth in January 2023. In terms of customer channel, national accounts were up 14% year over year in February (compared with a 16% increase in January 2023), while non-national accounts grew 4% (compared with a 6% rise in January 2023).
The Zacks Consensus Estimate for the company’s overall daily sales is pegged at $28.4 million, indicating an increase from $26.6 million reported a year ago and from $27.3 million in the prior quarter.
Margins: Inflationary pressure has been a cause of concern. The company highlighted that it has been experiencing significant material cost inflation, particularly for steel, fuel and transportation. The company has been experiencing the adverse effects of tightening global and domestic supply chains. Also, adverse price/cost dynamics are expected to have weighed on the company’s quarterly margins.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for FAST this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of +0.76%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Fastenal carries a Zacks Rank #2.
Stocks With the Favorable Combination
Here are some companies which, according to our model, have the right combination of elements to post an earnings beat on their respective quarters to be reported.
EMCOR Group (EME - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank #2.
EME’s earnings missed the consensus mark once but beat the same on three other occasions, with the average surprise being 5.5%. Earnings for the to-be-reported quarter are expected to increase 32.4% year over year.
Lennox International (LII - Free Report) has an Earnings ESP of +2.35% and a Zacks Rank #2.
LII’s earnings topped the consensus mark in three of the last four quarters but missed on one occasion, with the average being 5.7%. Earnings for the to-be-reported quarter are expected to increase 0.4% year over year.
Patrick Industries (PATK - Free Report) has an Earnings ESP of +33.41% and a Zacks Rank #3.
PATK’s earnings topped the consensus mark in all the last four quarters, with the average being 34.8%. Earnings for the to-be-reported quarter are expected to decline 70.7% year over year.
Image: Bigstock
Fastenal (FAST) to Report Q1 Earnings: What's in the Cards?
Fastenal Company (FAST - Free Report) is scheduled to report first-quarter 2023 results on Apr 13, before the opening bell.
In the last reported quarter, earnings and net sales topped the Zacks Consensus Estimate by 2.4% and 1.2%, respectively. Earnings and net sales increased 10.7% each from the year-ago figures, respectively. Fastenal’s earnings topped the consensus mark in all the last four quarters, with the average being 3.3%.
Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has remained unchanged at 49 cents over the past 60 days. The estimated figure indicates 4.3% growth from the year-ago level. The consensus mark for revenues is pegged at $1.83 billion, suggesting a 7.3% increase from the year-ago reported figure of $1.70 billion.
Fastenal Company Price and EPS Surprise
Fastenal Company price-eps-surprise | Fastenal Company Quote
Key Factors to Note
Sales: Higher manufacturing demand is expected to have generated higher sales on a year-over-year basis for this national wholesale distributor of industrial and construction supplies. Notably, slower international business due to the zero-COVID policy in China and a soft European macro are expected to have weighed on the company’s top line. Construction sales are expected to be weak as Fastenal de-emphasizes walk-in branch sales.
If we go by the latest monthly sales report, February’s average daily sales grew 9.6% to $29.1 million, moderating sequentially. In January 2023, daily sales registered 11.2% growth.
The company has been navigating well through issues like price inflation, supply-chain challenges and a shortage of labor. It has been gaining from all product categories, end markets and customers.
In terms of end markets/products/customers in February and January 2023, manufacturing sales improved by 25.8% and 20.8% from the respective year-ago months. Non-residential construction declined 1.8% in February and 1.7% in January 2023.
Fastener sales were up 8% in February (compared with an 11.6% increase in January 2023). Safety sales increased 3.2% in February compared with 6.2% growth in January 2023. In terms of customer channel, national accounts were up 14% year over year in February (compared with a 16% increase in January 2023), while non-national accounts grew 4% (compared with a 6% rise in January 2023).
The Zacks Consensus Estimate for the company’s overall daily sales is pegged at $28.4 million, indicating an increase from $26.6 million reported a year ago and from $27.3 million in the prior quarter.
Margins: Inflationary pressure has been a cause of concern. The company highlighted that it has been experiencing significant material cost inflation, particularly for steel, fuel and transportation. The company has been experiencing the adverse effects of tightening global and domestic supply chains. Also, adverse price/cost dynamics are expected to have weighed on the company’s quarterly margins.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for FAST this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of +0.76%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Fastenal carries a Zacks Rank #2.
Stocks With the Favorable Combination
Here are some companies which, according to our model, have the right combination of elements to post an earnings beat on their respective quarters to be reported.
EMCOR Group (EME - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank #2.
EME’s earnings missed the consensus mark once but beat the same on three other occasions, with the average surprise being 5.5%. Earnings for the to-be-reported quarter are expected to increase 32.4% year over year.
Lennox International (LII - Free Report) has an Earnings ESP of +2.35% and a Zacks Rank #2.
LII’s earnings topped the consensus mark in three of the last four quarters but missed on one occasion, with the average being 5.7%. Earnings for the to-be-reported quarter are expected to increase 0.4% year over year.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Patrick Industries (PATK - Free Report) has an Earnings ESP of +33.41% and a Zacks Rank #3.
PATK’s earnings topped the consensus mark in all the last four quarters, with the average being 34.8%. Earnings for the to-be-reported quarter are expected to decline 70.7% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.