Leading national distributor of industrial and construction
), released its sales information for the month of July. The
company once again reported year-over-year decline in daily
Fastenal's daily sales growth rates came in at 2.9% for the
month of July, much lower than the 6% reported in June. The
sequential improvement seen in the month of June could not be
repeated in July. The daily sales growth rate was also
significantly down from the daily growth rate of 12.1% in the
corresponding prior-year month. One less selling day in the
quarter due to the Jul 4
holiday led to the decline. Moreover, weak sales on the day
following the national holiday also took a toll on top-line
growth. Foreign exchange further dragged the July daily sales by
The company has been witnessing a consistent decline in daily
sales growth rates for the past few quarters. The declining daily
sales rates are due to lower sales of its fasteners product line
which are being hurt by end-market slowdown and broader economic
Fastenal serves customers in the manufacturing and
non-residential construction markets. Both the markets reported
disappointing July sales. Daily sales to manufacturing customers
(representing almost 50% of revenues) grew only 2.1%, but that to
non-residential construction customers (representing 20% to 25%
of revenues) declined 0.1%. While soft fastener sales were
responsible for the meager increase in the former case, weakness
in the non-residential construction market and the government
policy uncertainty and sequestration in the U.S. contributed to
the drop in sales in the latter.
Fastenal carries a Zacks Rank #4 (Sell). Other companies in
the sector that are doing well include
Liquidators Holdings, Inc.
Builders FirstSource, Inc.
The Home Depot, Inc.
). While Lumber carries a Zacks Rank #1 (Strong Buy), The Home
Depot and Builders FirstSource carry a Zacks Rank #2 (Buy).
BUILDERS FIRSTS (BLDR): Free Stock Analysis
FASTENAL (FAST): Free Stock Analysis Report
HOME DEPOT (HD): Free Stock Analysis Report
LUMBER LIQUIDAT (LL): Free Stock Analysis
To read this article on Zacks.com click here.