Fastenal (FAST 46.97, +3.38) has jumped 7.8% in pre-market after reporting a slim earnings beat and announcing a new buyback authorization.
The distributor of industrial supplies, fasteners, safety products, and tools to original equipment manufacturers (OEMs) reported above-consensus second quarter earnings of $0.52 per share on a 10.6% year-over-year increase in revenue to $1.12 billion, which was just north of analysts' expectations.
Fastenal's sales growth was driven by higher unit sales, which resulted from improvements in underlying market demand. Growth in the company's vending business and growth in new and existing Onsite locations also contributed to the increase in sales.
Daily sales of fastener products grew 7.9% year-over-year with 3.6 percentage points of growth resulting from an acquisition of Manufacturers Supply Company. These sales accounted for 36.1% of all sales in the second quarter.
Daily sales of non-fastener products increased 12.2% year-over-year, representing 63.9% of all sales.
Gross margin improved to 49.8% from 49.5% one year ago. Inclusion of Manufacturers Supply Company was a negative for gross margin, but was offset by improvements from progress in supply chain initiatives.
Fastenal's full-time equivalent employee headcount declined 0.3% year-over-year to 17,612.
The company signed 4,881 industrial vending machines, representing year-over-year growth of 0.3%. Installed device count increased 14.1% year-over-year to 66,577. Sales through vending machines grew at a double-digit pace, thanks to the increase in installed base. The company signed 68 new Onsite locations, representing year-over-year growth of 54.5%. Fastenal ended June with 486 active sites, up 45.9% year-over-year.
Fastenal signed 51 new national account contracts. Revenue attributable to national account customers made up 47.8% of total sales. Sales to national customers increased 13.2% year-over-year. The company observed an improvement in industrial demand, which caused 68 of the company's top 100 customers to increase their purchases while sales to 32 of top 100 customers declined.
In addition to reporting earnings, Fastenal announced that its Board of Directors approved a new repurchase program, which allows the company to buy back up to 5,000,000 million shares of its common stock. The authorization is open-ended.