Fastenal on Friday reported an 1.8% increase in sales in the second quarter of the year, but the company’s net income fell by the same margin compared to the same quarter last year.
The Minnesota-based distributor — no. 5 on ID’s most recent Big 50 — posted just shy of $1.92 billion in sales for the April-June window. Quarterly gross profit of $864 million was up 0.7% compared to the previous second quarter but fell as a percentage of net sales, which officials attributed to an “unfavorable” customer and product mix and “short-term inefficiencies” in its warehousing supply chain.
Operating income and net income, meanwhile, slipped to $395 million and $298 million, respectively, in the latest quarter. The mixed totals, however, reportedly met projections on Wall Street, where the company’s stock saw a jump in Friday trading.
Fastenal officials attributed the higher sales numbers to growth with its larger customers and at its “Onsite” locations that have opened over the past two years. The quarterly numbers were hindered, in particular, by a drop in the price of its flagship fastener portfolio amid reduced transportation costs for those products. Fasteners sales, the company noted, are also more susceptible to periods of sluggish industrial production.
Fastenal’s fastener sales were down 3% in the quarter, and sales to both MRO and OEM customers were off compared to the same quarter last year. Its non-fastener sales were up 4.2% over that span, highlighted by a 7.1% increase in sales of safety supplies, which benefited from strong growth among Fastenal’s warehouse customers.
The company wrapped up the quarter with more than $608 million in June sales, which was down compared to June 2023 due to two fewer selling days this year; on a daily average basis, monthly sales climbed 3.3%.
Fastenal also announced a change in its executive ranks on Friday. CEO Dan Florness will relinquish his role as company president to Jeff Watts, who will serve as Fastenal’s president and chief sales officer beginning next month. Watts, a 28-year veteran of Fastenal, was appointed chief sales officer just over a year ago.
"Fastenal operates with a simple style: find great people, ask them to join, and give them a reason to stay," Florness said in the announcement. "We also operate with four simple values: ambition, innovation, integrity and teamwork. Jeff adds two more: humility and resiliency.
