Fastenal Q4 Sales, Profit Rise As Store Closures Continue

Continued strong growth in Fastenal's vending business powered a strong finish to 2016, even as store closures continued to far outpace openings.

Winona, MN-based Fastenal â€” No. 10 on Industrial Distribution's 2016 Big 50 List â€” reported its 2016 fourth quarter and full year fiscal results on Wednesday, in which the company posted a solid increase in Q4 year-over-year sales and profit. The company also provided details on its store openings and closures, as well as headcount.

Fastenal reported Q4 sales of $948 million, up 2.7 percent year-over-year, while profit of $115 million increased 2.6 percent. That follows Q3's 1.8 percent YOY sales decrease and 7.0 percent profit decrease.

Fastenal had December sales of $296 million, up 3.2 percent YOY while daily sales also increased 3.2 percent. That means the company had YOY daily sales growth in 11 months of 2016, with the only month as flat.

Here's how the past 13 months of Fastenal's daily sales growth has been:

  • December 2016: +3.2 percent
  • November 2016: +1.2 percent
  • October 2016: +3.9 percent
  • September 2016: +2.8 percent
  • August 2016: +0.3 percent
  • July 2016: +2.1 percent
  • June 2016: 0.0 percent
  • May 2016: +1.1 percent
  • April 2016: +3.8 percent
  • March 2016: 0.0 percent
  • February 2016: +2.6 percent
  • January 2016: +3.3 percent
  • December 2015: -3.8 percent

Fastenal ended Q4 with a total store employee headcount of 12,966, down 7.1 percent YOY. It's total overall headcount of 19,624 at the end of Q4 was down 5.4 percent.

Fastenal opened five new stores in Q4 while it closed or converted 45. It ended 2016 with 2,503 store locations, down 159, or 4.5 percent, from 2015. Meanwhile, the company's number of installed industrial vending machines continued its climb to 62,822 at thee end of Q4, up 13.2 percent year-over-year and up 4.0 percent from the end of Q3. Fastenal's active Onsite locations numbered 401 at the end of Q4, up 51.9 percent YOY.

Some other figures Fastenal shared Wednesday: 

  • Fastenal signed 46 new national contracts during Q4, and signed 190 for the year. It signed 43 new Onsite customer locations in Q4, and 176 throughout 2016. Of those Onsite locations, 130 were operational as of Dec. 31.
  • Fastenal's fastener sales continued its longstanding decline as its percentage of total sales, comprising 35.6 percent of total sales in Q4. The company said fastener sales contracted 2.4 percent in Q4. Fastenal's non-fastener sales — which comprised 64.4 percent of total Q4 sales — grew 5.9 percent in Q4.
  • Fastenal said its safety product line comprised 15.3 percent of total Q4 sales and had 9.3 percent annual growth in 2016.
  • December sales to manufacturing customers increased 4.3 percent YOY, while sales to non-residential construction customers declined 1.6 percent. Fastener sales declined 2.7 percent in December, while all other sales grew 7.1 percent.

"The fourth quarter of 2016 did show some improvement with daily sales growth of 2.7 percent, though this more likely reflected an easier comparison than substantive improvement in overall demand," Fastenal said in its Wednesday earnings release. 'For most of the year, we saw relative weakness from non-residential construction and heavy manufacturing customers and in demand for our fastener products, speaking to the sustained softness in heavy and general industrial markets. Business with our largest customers was also relatively weak, with sales to our top 100 customers rising modestly in the first half of 2016 and falling modestly in the second half of 2016. While these weaknesses were representative of conditions in the United States and Canada, total sales outside of these geographic areas were relatively strong and improved over the course of 2016."

Full year

For the full year 2016, Fastenal had total sales of $3.96 billion, up 2.4 percent over 2015, while daily sales increased 2.0 percent. Total profit of $499.5 million was down 3.3 percent.

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