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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.

 

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

2018 12.0 14.8 13.1 13.4 12.5 13.5            

2017

3.8

6.1

8.4

8.9

9.7

13.0

12.9

12.8

15.3

13.8

15.4

14.7

2016

3.3

2.6

0.0

3.8

1.1

0.0

2.1

0.3

2.8

3.9

1.2

3.2

2015

12.0

8.6

5.6

6.1

5.3

3.7

3.2

1.6

-0.3

-0.8

-1.1

-3.8

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