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Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
In the last reported quarter, Fastenal reported mixed results, with earnings meeting the Zacks Consensus Estimate and net sales missing the same by 0.3%. On a year-over-year basis, net sales rose 1.8% but the bottom line declined 2%.
Fastenal’s earnings topped the consensus mark in two of the last four quarters, met on one and missed on another occasion, with the average being 0.6%.
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has remained unchanged at 52 cents over the past 60 days. The estimated figure indicates flat growth from the year-ago level. The consensus mark for revenues is pegged at $1.92 billion, indicating a 3.8% increase from the year-ago reported figure of $1.85 billion.
Key Factors to Note for Fastenal's Q3
Sales: The demand outlook for the broader manufacturing sector continues to show sluggishness. However, the company has several factors working in its favor that are expected to have driven its quarterly sales growth. These 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. Despite challenging comparisons to the previous year, Fastenal's positive attributes are anticipated to have driven its growth.
If we go by the latest monthly sales report, August’s average daily sales (ADS) grew 2.1% to $29.7 million, improving from 0.5% growth in July 2024.
In terms of end markets/products/customers in August and July 2024, total manufacturing sales improved 8.9% (Heavy Manufacturing and Other Manufacturing) and 3.5% from the year-ago months, respectively. Non-residential construction declined 6.6% in August and 4.6% in July 2024. Fastener sales were down 2.2% in August and down 6.3% in July 2024. On the other hand, Safety sales increased 5.5% in August compared with 7.5% growth in July 2024. Other categories improved 3.7% in August and 1.6% in July 2024.
Our model predicts Fastenal’s overall daily sales to be $30.1 million for the third quarter, indicating an increase of 2.7% from a year ago.
Notably, Fastenal has been experiencing a divergence in the performance of Fastener versus its non-fastener product lines. Fasteners are more tied to final goods production, making them vulnerable to downturns in industrial production. Again, Fastener pricing has decelerated more rapidly compared to non-fastener products. Thirdly, although the growth rate has slowed compared to the final two months of 2023, the company is still experiencing faster growth with its retailer-oriented customers, attributable to market share gains, an improved product mix, and more favorable comparisons. This trend primarily benefits its safety product line.
Margins: Steel and freight expenses continue to decline. The company is focused on maintaining a balance between pricing and declining costs, aiming to eliminate any negative impact on the full-year margin.
The negative impact from the customer and product mix, high growth in the lower margin of Onsite and non-fastener products and lower product margins in certain other product categories are likely to have been headwinds. However, modestly positive price-cost (reflecting easing product cost) and favorable leverage of organizational/overhead costs might have partly offset the negatives.
Per our model, the gross margin for the quarter is expected to be 45.5%, down 40 bps from the year-ago figure. We expect total operating expenses to increase 3.7% to $478 million in the third quarter from a year ago.
What the Zacks Model Unveils
Our proven model does not conclusively predict 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 not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of -1.11%. 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 #4 (Sell).
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.
BLDR’s earnings topped the consensus mark in all the last four quarters, with the average being 14.3%. Earnings for the to-be-reported quarter are expected to grow 26.9% year over year.
Lithia Motors, Inc. (LAD - Free Report) has an Earnings ESP of +2.81% and a Zacks Rank #3.
LAD’s earnings topped the consensus mark in two of the last four quarters, with the average negative surprise being 4.2%. Earnings for the to-be-reported quarter are expected to decline 17.1% year over year.
Deckers Outdoor Corporation (DECK - Free Report) has an Earnings ESP of +1.43% and a Zacks Rank #3.
DECK’s earnings missed the consensus mark in all the last four quarters. Earnings for the to-be-reported quarter are expected to decrease 47.2% year over year.
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Fastenal Gears Up to Report Q3 Earnings: Things to Keep in Mind
Fastenal Company (FAST - Free Report) is scheduled to report third-quarter 2024 results on Oct. 11, before the opening bell.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
In the last reported quarter, Fastenal reported mixed results, with earnings meeting the Zacks Consensus Estimate and net sales missing the same by 0.3%. On a year-over-year basis, net sales rose 1.8% but the bottom line declined 2%.
Fastenal’s earnings topped the consensus mark in two of the last four quarters, met on one and missed on another occasion, with the average being 0.6%.
Fastenal Company Price and EPS Surprise
Fastenal Company price-eps-surprise | Fastenal Company Quote
Trend in Estimate Revision for FAST
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has remained unchanged at 52 cents over the past 60 days. The estimated figure indicates flat growth from the year-ago level. The consensus mark for revenues is pegged at $1.92 billion, indicating a 3.8% increase from the year-ago reported figure of $1.85 billion.
Key Factors to Note for Fastenal's Q3
Sales: The demand outlook for the broader manufacturing sector continues to show sluggishness. However, the company has several factors working in its favor that are expected to have driven its quarterly sales growth. These 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. Despite challenging comparisons to the previous year, Fastenal's positive attributes are anticipated to have driven its growth.
If we go by the latest monthly sales report, August’s average daily sales (ADS) grew 2.1% to $29.7 million, improving from 0.5% growth in July 2024.
In terms of end markets/products/customers in August and July 2024, total manufacturing sales improved 8.9% (Heavy Manufacturing and Other Manufacturing) and 3.5% from the year-ago months, respectively. Non-residential construction declined 6.6% in August and 4.6% in July 2024. Fastener sales were down 2.2% in August and down 6.3% in July 2024. On the other hand, Safety sales increased 5.5% in August compared with 7.5% growth in July 2024. Other categories improved 3.7% in August and 1.6% in July 2024.
Our model predicts Fastenal’s overall daily sales to be $30.1 million for the third quarter, indicating an increase of 2.7% from a year ago.
Notably, Fastenal has been experiencing a divergence in the performance of Fastener versus its non-fastener product lines. Fasteners are more tied to final goods production, making them vulnerable to downturns in industrial production. Again, Fastener pricing has decelerated more rapidly compared to non-fastener products. Thirdly, although the growth rate has slowed compared to the final two months of 2023, the company is still experiencing faster growth with its retailer-oriented customers, attributable to market share gains, an improved product mix, and more favorable comparisons. This trend primarily benefits its safety product line.
Margins: Steel and freight expenses continue to decline. The company is focused on maintaining a balance between pricing and declining costs, aiming to eliminate any negative impact on the full-year margin.
The negative impact from the customer and product mix, high growth in the lower margin of Onsite and non-fastener products and lower product margins in certain other product categories are likely to have been headwinds. However, modestly positive price-cost (reflecting easing product cost) and favorable leverage of organizational/overhead costs might have partly offset the negatives.
Per our model, the gross margin for the quarter is expected to be 45.5%, down 40 bps from the year-ago figure. We expect total operating expenses to increase 3.7% to $478 million in the third quarter from a year ago.
What the Zacks Model Unveils
Our proven model does not conclusively predict 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 not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of -1.11%. 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 #4 (Sell).
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.
Builders FirstSource (BLDR - Free Report) has an Earnings ESP of +2.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
BLDR’s earnings topped the consensus mark in all the last four quarters, with the average being 14.3%. Earnings for the to-be-reported quarter are expected to grow 26.9% year over year.
Lithia Motors, Inc. (LAD - Free Report) has an Earnings ESP of +2.81% and a Zacks Rank #3.
LAD’s earnings topped the consensus mark in two of the last four quarters, with the average negative surprise being 4.2%. Earnings for the to-be-reported quarter are expected to decline 17.1% year over year.
Deckers Outdoor Corporation (DECK - Free Report) has an Earnings ESP of +1.43% and a Zacks Rank #3.
DECK’s earnings missed the consensus mark in all the last four quarters. Earnings for the to-be-reported quarter are expected to decrease 47.2% year over year.