Fastenal (FAST 53.27, -2.37, -4.26%) gave up 5.1% in pre-market
despite beating quarterly earnings expectations. The early weakness has sent
the stock below its 200-day moving average (54.66) for the first time since
The distributor of fasteners, industrial supplies, cutting tools, power tools, and safety products reported above-consensus third quarter earnings of $0.69 per share on a 13.0% year/year jump in revenue to $1.28 bln, which was just ahead of estimates.
The company's revenue growth rate was fueled by higher unit sales, resulting from continued strength in underlying market demand and growth drivers like industrial vending and onsite locations. Fastener sales made up 34.7% of total third quarter sales while daily sales of fastener products increased 10.8%. Sales of non-fastener products made up 65.3% of total sales and increased 14.9% on a daily basis.
Gross margin weakened to 48.1% from 49.1% one year ago. The decline took place due to unfavorable changes in the customer and product mix and higher freight costs at the branch level. The company realized higher pricing during the quarter, which offset cost increases to a large extent.
The company signed 5,877 of its industrial vending machines, which are deployed at customer manufacturing and distribution facilities to aid with management of tools and supplies, during the quarter, representing year/year growth of 23.2%. This brought the company's installed device count to 78,706, which translates to year/year growth of 14.0%. Sales through the company's vending machines increased roughly 20.0% during the third quarter due to a higher number of installed machines and higher revenue per device.
Fastenal signed 88 new Onsite locations during the third quarter, up from 81 signings one year ago. The company ended the quarter with 828 Onsite locations. The company plans to sign between 91 and 116 more Onsite locations before the end of the fiscal year.
The company secured 41 new customer accounts with a multi-site contract, also known as national account contracts. Revenue from national account customers made up 51.5% of total revenue during the third quarter. Daily sales to national account customers increased 18.0% year/year. The company reported an increase in sales to 79 of its top 100 customers.
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