Fastenal Q2 Sales Improve 13% As Vending Installations Top 76K

Fastenal continued its now long-standing strong growth during its 2018 second quarter, powered by fastener product sales and especially by vending and onsite sales.

The Winona, MN-based company — No. 7 on Industrial Distribution's Big 50 List — reported its 2018 Q2 fiscal results on Wednesday, showing that sales increased 13.1 percent year-over-year (YoY), nearly identical to Q1's 13.2 percent growth. Fastenal said its Q2 sales received a modest boost from higher pricing it enacted at the end of Q4 2017 to mitigate marketplace inflation.

Fastenal's Q2 total profit was $211.2 million, a major increase from $174.3 million in Q1 and $148.9 million a year earlier. Q2 gross profit of $617.7 million increased 10.6 percent YoY, while gross profit margin dipped 110 basis points to 48.7 percent. Meanwhile, Q2 operating profit of $269.0 million increased 13.3 percent YoY, while operating margin was flat at 21.2 percent.

Fastenal said fastener sales — which comprised 35.4 percent of total revenue — increased 11.1 percent during Q2. Non-fastener sales — 64.6 percent of revenue — increased 14.8 percent. Sales to non-residential construction customers increased 15.5 percent YoY, while sales to manufacturing customers grew 13.3 percent.

Some other notable performance figures from Fastenal's Q2:

• Fastenal signed 5,537 industrial vending devices, up 13.4 percent YoY
• Fastenal's installed device count on June 30 was 76,069, up 14.3 percent YoY
• Vending device sales continued to grow at more than 20 percent
• Fastenal signed 81 new Onsite locations, up from 68 signings a year earlier
• Fastenal ended Q2 with 761 active Onsite locations, up 56.6 percent YoY
• Fastenal signed 43 new national account contracts in Q2
• National account customers represented 50.7 percent of total Q2 sales
• 80 of Fastenal's top 100 customers had business growth in Q2, up from 78 in Q1; 72 in Q4 and Q3 2017; and 68 in Q2 2017
• Sales to non-national account customers grew at a mid- to high-single digit rate in Q2

Fastenal closed 43 branches in Q2 and opened five, following 49 branch closures and zero openings in Q1. Fastenal ended Q2 with a total public branch count of 2,290, down 3.9 percent year-to-date and down 6.6 percent YoY. Meanwhile, Fastenal's 13,688 total in-market location employee count is up 2.0 percent year-to-date and up 2.6 percent YoY, while its overall employee headcount of 20,855 is up 1.4 percent year-to-date and up 3.5 percent YoY. In the last 12 months, Fastenal increased its absolute headcount by 353 in its in-market locations and by 681 people overall.

By month in Q2, Fastenal's daily sales grew by 13.4 percent YoY in April; 12.5 percent in May; and 13.5 percent in June. That makes 13 straight months of double-digit YoY daily sales growth, with at least 12.0 percent growth in each month. Here's how Fastenal's monthly daily sales growth has fared since the start of 2015.