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Fastenal (FAST) Q4 Earnings & Sales Top Estimates, Shares Up
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Fastenal Company’s (FAST - Free Report) shares gained more than 2.5% in the pre-market trading session on Jan 18 after it reported fourth-quarter 2023 results. Earnings and net sales topped the Zacks Consensus Estimate and increased on a year-over-year basis, given daily sales growth, good expense control and lower net interest expense.
Earnings & Sales in Detail
The company reported earnings per share (EPS) of 46 cents, which beat the consensus mark by a penny and increased 8.4% from the year-ago period.
Net sales totaled $1,758.6 million, surpassing the consensus mark of $1,748 million and increasing 3.7% from the year-ago level.
Daily sales of $28.4 million increased 3.7% year over year in the reported quarter. In the fourth quarter of 2023, Fastenal witnessed an upswing in unit sales, primarily attributed to robust growth at its Onsite locations, especially those established within the past two years. Additionally, foreign exchange fluctuations positively impacted fourth-quarter sales by 10 basis points (bps).
On a monthly basis, daily sales improved 5.3%, 3.8% and 1.9% in December, November and October 2023, respectively, year over year.
Daily sales of Fastener products (mainly used for industrial production and accounting for approximately 31.1% of fourth-quarter sales) declined 2.3% year over year. Sales of safety products (22.5%) grew 9.4% on a daily basis. Sales of the remaining products (46.4%) grew 5.3% year over year.
On an end-market basis, daily sales of Heavy manufacturing (which accounted for approximately 42.5% of fourth-quarter sales) rose 5.8% year over year. Sales of Other manufacturing (31.1%) grew 3.3% on a daily basis. Sales of Non-residential construction (8.8%) fell 7.4% on a daily basis. Sales of Reseller (5.6%) declined 7.9%, while that of Other (12%) increased 13.5% year over year.
Daily sales through weighted FMI devices grew 11.3% for the fourth quarter and represented 40.3% of net sales.
Daily sales to national account customers (which represented 62% of total fourth-quarter net sales) increased 8.5% on a year-over-year basis. Daily sales to non-national account customers (which include government customers and represent 38% of total quarterly revenues) declined 3.2% from the prior-year quarter.
The company’s digital footprint increased to 58.1% of sales in the fourth quarter of 2023 from 52.6% of sales in the year-ago period.
Vending Trends & Other Growth Drivers
Fastenal signed 58 new Onsite locations during the quarter and 326 signings for 2023. As of Dec 31, 2023, the company had 1,822 active sites, up 12.3% from the year-ago period. Daily sales through Onsite locations (excluding sales transferred from branches to new Onsite) increased at a mid-single-digit rate year over year. This was backed by strong contributions from Onsite locations, which were activated and implemented over the last 12 months and continued growth from older Onsite locations.
For 2024, the company now expects 375-400 annual Onsite signings.
Fastenal Company Price, Consensus and EPS Surprise
Gross margin was 45.5% in the reported quarter, up 20 bps year over year. This was due to improved product margins in fasteners and positive price-cost dynamics. These were offset by the negative effect of customer and product mix.
Operating margin came in at 20.1%, up 50 bps from a year ago.
2023 Highlights
EPS was $2.02, reflecting an increase of 6.7% from $1.89 a year ago. Net sales were $7,346.7 million, up 5.2% from $6,980.6 million in 2022. Gross margin decreased 40 bps to 45.7% in 2023. Nevertheless, operating margin remained flat at 20.8%.
Financials
As of Dec 31, 2023, cash and cash equivalents were $221.3 million, down from $230.1 million on Dec 31, 2022. The long-term debt at 2023-end was $200 million, down from $353.2 million at 2022-end. During 2023, FAST returned $1,016.8 million to its shareholders in the form of dividends.
During 2023, cash provided by operating activities totaled $1,432.7 million, up 52.3% from the year-ago period.
Zacks Rank
Fastenal currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the Zacks Retail-Wholesale sector are:
Arcos Dorados Holdings Inc. (ARCO - Free Report) presently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 28.3% on average. Shares of ARCO have soared 40.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ARCO’s 2024 sales and EPS indicates 10.6% and 15.5% growth, respectively, from the year-ago period’s levels.
Chipotle Mexican Grill, Inc. (CMG - Free Report) currently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 5.8%, on average. Shares of CMG have surged 53.6% in the past year.
The Zacks Consensus Estimate for CMG’s 2024 sales and EPS indicates 13.1% and 18.9% growth, respectively, from the year-ago period’s levels.
Darden Restaurants, Inc. (DRI - Free Report) presently carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 4.2%, on average. The stock has gained 8.4% in the past year.
The Zacks Consensus Estimate for DRI’s 2024 sales and EPS suggests rises of 9.9% and 10.9%, respectively, from the year-ago period’s levels.
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Fastenal (FAST) Q4 Earnings & Sales Top Estimates, Shares Up
Fastenal Company’s (FAST - Free Report) shares gained more than 2.5% in the pre-market trading session on Jan 18 after it reported fourth-quarter 2023 results. Earnings and net sales topped the Zacks Consensus Estimate and increased on a year-over-year basis, given daily sales growth, good expense control and lower net interest expense.
Earnings & Sales in Detail
The company reported earnings per share (EPS) of 46 cents, which beat the consensus mark by a penny and increased 8.4% from the year-ago period.
Net sales totaled $1,758.6 million, surpassing the consensus mark of $1,748 million and increasing 3.7% from the year-ago level.
Daily sales of $28.4 million increased 3.7% year over year in the reported quarter. In the fourth quarter of 2023, Fastenal witnessed an upswing in unit sales, primarily attributed to robust growth at its Onsite locations, especially those established within the past two years. Additionally, foreign exchange fluctuations positively impacted fourth-quarter sales by 10 basis points (bps).
On a monthly basis, daily sales improved 5.3%, 3.8% and 1.9% in December, November and October 2023, respectively, year over year.
Daily sales of Fastener products (mainly used for industrial production and accounting for approximately 31.1% of fourth-quarter sales) declined 2.3% year over year. Sales of safety products (22.5%) grew 9.4% on a daily basis. Sales of the remaining products (46.4%) grew 5.3% year over year.
On an end-market basis, daily sales of Heavy manufacturing (which accounted for approximately 42.5% of fourth-quarter sales) rose 5.8% year over year. Sales of Other manufacturing (31.1%) grew 3.3% on a daily basis. Sales of Non-residential construction (8.8%) fell 7.4% on a daily basis. Sales of Reseller (5.6%) declined 7.9%, while that of Other (12%) increased 13.5% year over year.
Daily sales through weighted FMI devices grew 11.3% for the fourth quarter and represented 40.3% of net sales.
Daily sales to national account customers (which represented 62% of total fourth-quarter net sales) increased 8.5% on a year-over-year basis. Daily sales to non-national account customers (which include government customers and represent 38% of total quarterly revenues) declined 3.2% from the prior-year quarter.
The company’s digital footprint increased to 58.1% of sales in the fourth quarter of 2023 from 52.6% of sales in the year-ago period.
Vending Trends & Other Growth Drivers
Fastenal signed 58 new Onsite locations during the quarter and 326 signings for 2023. As of Dec 31, 2023, the company had 1,822 active sites, up 12.3% from the year-ago period. Daily sales through Onsite locations (excluding sales transferred from branches to new Onsite) increased at a mid-single-digit rate year over year. This was backed by strong contributions from Onsite locations, which were activated and implemented over the last 12 months and continued growth from older Onsite locations.
For 2024, the company now expects 375-400 annual Onsite signings.
Fastenal Company Price, Consensus and EPS Surprise
Fastenal Company price-consensus-eps-surprise-chart | Fastenal Company Quote
Margins
Gross margin was 45.5% in the reported quarter, up 20 bps year over year. This was due to improved product margins in fasteners and positive price-cost dynamics. These were offset by the negative effect of customer and product mix.
Operating margin came in at 20.1%, up 50 bps from a year ago.
2023 Highlights
EPS was $2.02, reflecting an increase of 6.7% from $1.89 a year ago. Net sales were $7,346.7 million, up 5.2% from $6,980.6 million in 2022. Gross margin decreased 40 bps to 45.7% in 2023. Nevertheless, operating margin remained flat at 20.8%.
Financials
As of Dec 31, 2023, cash and cash equivalents were $221.3 million, down from $230.1 million on Dec 31, 2022. The long-term debt at 2023-end was $200 million, down from $353.2 million at 2022-end. During 2023, FAST returned $1,016.8 million to its shareholders in the form of dividends.
During 2023, cash provided by operating activities totaled $1,432.7 million, up 52.3% from the year-ago period.
Zacks Rank
Fastenal currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the Zacks Retail-Wholesale sector are:
Arcos Dorados Holdings Inc. (ARCO - Free Report) presently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 28.3% on average. Shares of ARCO have soared 40.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ARCO’s 2024 sales and EPS indicates 10.6% and 15.5% growth, respectively, from the year-ago period’s levels.
Chipotle Mexican Grill, Inc. (CMG - Free Report) currently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 5.8%, on average. Shares of CMG have surged 53.6% in the past year.
The Zacks Consensus Estimate for CMG’s 2024 sales and EPS indicates 13.1% and 18.9% growth, respectively, from the year-ago period’s levels.
Darden Restaurants, Inc. (DRI - Free Report) presently carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 4.2%, on average. The stock has gained 8.4% in the past year.
The Zacks Consensus Estimate for DRI’s 2024 sales and EPS suggests rises of 9.9% and 10.9%, respectively, from the year-ago period’s levels.