Fastenal Company FAST recently released its October sales report, wherein average daily sales or ADS grew 2.8% year over year to $30.1 million, moderating sequentially but improving annually. In the prior month, daily sales registered 3.2% growth, and in the year-ago period, the same registered a 1.9% increase.
The ADS is lower than the historical October daily sales growth average of down 2.1% month over month between 2018 and 2023 (excluding 2020).
Net sales in October 2024 were $692.8 million, reflecting an increase of 7.5% year over year, bolstered by an extra sales day.
End markets such as aerospace, government, education, and healthcare showed mixed performance, while construction remained weak in October.
Shares of this wholesale distributor of industrial and construction supplies gained 7% yesterday.
End-Market Perspective, Product Lines & Customers
From an end-market perspective, heavy manufacturing sales improved 3.1% for the month, and other manufacturing increased 4.9% from a year ago. Total manufacturing (which accounted for 74.8% of October 2024 sales) registered 8% growth in October 2024 compared with 7.5% growth a year ago. Non-residential construction dropped 4.9% compared with an 8.8% decrease reported in May 2023.
Fastenal derives sales from Fasteners, Safety and other product lines. Fasteners witnessed a 2% decline in sales last month compared with a 2.6% decrease in the year-ago period. Safety products grew 5.8% in October 2024 compared with a rise of 6.4% a year ago. Other categories improved 5.1% compared with a 3.3% increase a year ago. On a sequential basis, Fasteners products and Other categories sales improved while that of Safety products moderated.
Geographically, sales in the United States grew 2.3% (compared with 1% a year ago), while Canada/Mexico grew 4.2% (compared with 8.2% a year ago). Rest of World sales grew 9.2% compared with 0.4% growth registered in the year-ago period.
In terms of customer/channel, National account daily sales growth advanced 5% in October from a year ago, given the fact that 61% of the top 100 accounts and 49.7% of public branches are expanding. Yet, non-national accounts showed a 1% decline year over year for the month. In the year-ago period, daily sales declined 4% in non-national accounts year over year.
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Shares of the company have gained 26.3% over the past three months, better than the industry‘s 15.1% rise. With many shorter-cycle indicators remaining sluggish, it seems the anticipated recovery in the industrial sector for the second half of 2024 is being delayed. Yet, heavy manufacturing end markets are showing strength.
Fastenal’s Zacks Rank and Key Picks
Fastenal currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks from the Zacks Retail and Wholesale Sector are:
Tecnoglass Inc. TGLS currently carries a Zacks Rank #2 (Buy). TGLS has a trailing four-quarter average earnings surprise of 3.1%.
The Zacks Consensus Estimate for TGLS’ current financial-year sales suggests growth of 6.7% but a decline of 13.1% for earnings per share from the year-ago reported numbers.
Vital Farms, Inc. VITL currently carries a Zacks Rank #2. VITL has a trailing four-quarter average earnings surprise of 82.5%.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 27% and 88.1%, respectively, from the year-ago reported numbers.
Sprouts Farmers Market, Inc. SFM currently sports a Zacks Rank #1. SFM has a trailing four-quarter earnings surprise of 15.3%, on average.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings suggests growth of 11.4% and 28.2%, respectively, from the year-ago reported numbers.
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