Fastenal Q1 Profit Beats Expectations, Sales Miss

Slumping oil and gas business sales hurt the company's overall revenue, while a continued push in its industrial vending and hiring drove healthy profit growth.

Id 5140 Fastenal 2 0

Fastenal – No. 12 on Industrial Distribution's 2014 Big 50 List – reported its 2015 first quarter financials on Friday.

The company posted Q1 total sales of $953.3 million, an 8.8 percent increase year-over-year from Q1 2014. The figure was just shy of Reuters analysts' predictions of $955.19 million. Daily sales for Q1 were $15.1 million, compared to Q1 2014's $13.9 million.

Net earnings for the quarter rose 14.0 percent to $127.6 million, beating analysts' predictions.

While earnings exceeded expectations, Fastenal said sales were hit hard by a slowdown in its business connected to the oil and gas industry. Net sales were also hurt by slight inflationary price changes in non-fastener products.

Sales in Fastenal's Fastener business, which comprises just under 40 percent of its total business, were up 5.6 percent in Q1. That's down from 11.4 percent in Q4 2014 and up from 1.6 percent in Q1 2014. Sales of non-fasteners grew 11.7 percent this past quarter, down from 19.0 percent in Q4 2014 and 14.2 percent in Q1 2014. Sales of non-residential construction grew 6.2 percent this past quarter, down from 7.8 percent in Q4 2014 and up from 2.9 percent in Q1 2014.

Fastenal closed 13 stores in Q1 2015, converted two to customer-only locations, and opened two new stores, bringing its total store count to 2,624 at the end of the quarter.

Meanwhile, the company added 1,690 FAST Solutions vending machines in the quarter, bringing its total machine count to 48,545. That figure is a 15.2 percent increase year-over-year since Q1 2014.

Fastenal's focus on hiring continued in the quarter, as it hired 801 additional employees to bring its total employee count to 19,218. That figure is up 4.3 percent since the end of Q4 2014, and up 8.0 percent year-over-year since Q1 2014.

Product line sales were 39.0 percent of net sales in Q1, a third-straight quarterly percentage decrease. In monthly sales growth, the quarter started at 12.0 percent in January, 8.6 percent in February, and 5.6 percent in March.