Safety Sales Surge for Fastenal, Core Business Also Shows Promise - Modern Distribution Management

Log In

Safety Sales Surge for Fastenal, Core Business Also Shows Promise

The safety category again stole the show for Fastenal Co. during its May sales report with a 136.3% increase, while the companys fastener business has likely hit the bottom during the COVID-19 disruption and could be on the upswing.
Fastenal 2021 net sales 4Q

For the second month in a row, Fastenal Co. (Nasdaq: FAST) notched impressive growth in its sales of safety products, with the in-demand category spiking 136.3% in May after a 119.7% jump in April.

Overall, the Winona, Minnesota-based company’s May sales increased 4.4%. And while Fastenal again saw a decline in its fastener sales — down 15.3% in May — that category appears to have stabilized and could be trending upward soon as the economy strengthens.

Not only did the May sales total represent a marked improvement over April’s 22.5% dip, but also the fastener market is improving, according to the most recent Baird/Fastener Distributor Index (FDI) survey. The May FDI was 45, up five points from April’s index of 40, indicating the category is seeing some tailwinds as the coronavirus crisis subsides.

“The May Baird/FDI survey of fastener distributors showed downward momentum slowed as restrictions were lifted and some manufacturing/construction customers resumed operations,” Baird analyst Dave Manthey last week wrote in a note to investors.

Also see: Fastenal Posts 7% April Daily Sales Growth on Safety Surge Buys

Coupled with continued improvement in the forward-looking indicator (43.9 vs. 36.2 last month), the latest reading “suggests April may have been the bottom,” Manthey continued. “Our estimate for FAST May daily sales reflects an expectation for improvement in underlying, ‘ex-safety’ product sales.”

The latest figures indicate some sustained momentum for Fastenal. Last month, in a rare non-quarterly investor call to discuss the company’s financials, Fastenal EVP and CFO Holden Lewis explained the importance of the pivot to safety products and how the category has sustained the company during this economic downturn.

“Our safety teams were able to pivot to critical-needs customers, getting product to over 450 medical, healthcare and hospital customers that had bought little-to-no product from Fastenal in the past,” Lewis said. “In fact, the surge orders that we experienced in April were a product of more than 11,000 accounts that had not bought safety products from Fastenal in 2019.”

Mixed Bag for May

Meanwhile, Fastenal reported daily sales in May of $24.7 million, up 14.8% versus the year-ago month, based on strength in safety. In addition to the 15.3% decline in fasteners, the company saw sales of products in its “other” category — neither fasteners nor safety — decrease 6%.

By region, U.S. sales grew 14.4% in May. And by end market, manufacturing sales decreased 4.2% while non-residential construction sales decreased 9.8, the company said.

The company also saw a net loss of employees last month. Overall headcount decreased 5.4% to 21,034 from 22,245 the same month a year ago.

The biggest drop-off in employment came in Fastenal’s distribution personnel, with full-time equivalent (FTE) workers decreasing 14.3% to 2,961 in May. That number marked a 4.8% dip from April.

In Fastenal’s branch and onsite personnel, the full-time equivalent (FTE) worker count decreased 12.6% year-over-year to 11,131 in May. That was down 3.5% from April. The company also saw FTE decreases in total selling personnel (10.3%) and manufacturing personnel (9.8%).

While Fastenal gained some momentum in May, the company — like many in distribution — still faces an uphill climb as the economy gets back to normal but at a slower pace than many business owners would prefer. In other words, look for continued softness in fasteners even as the declines narrow.

“While we expect customer reopenings (as seen in this month’s FDI), we still expect double-digit declines given persistent economic weakness,” Manthey wrote.

In the last two months, shares of Fastenal have climbed about 50%, from a low of $28.18 per share on March 23 to $42.66 at market close on Friday, June 5.

The company also got a shout-out as a “cash-flow darling” from Jefferies, which included Fastenal in its list of 10 cyclical stocks that posted “more than a 10% increase in operating cash flow during Q1 despite the pandemic, an increase in Q1 cash flow compared to last year as a whole and what it calls a ‘reasonable’ balance sheet with a net to debt-equity ratio of less than 100%,” as Seeking Alpha wrote in a recent analysis.

Fastenal will report second-quarter earnings and June sales in July.

For more on the impact of COVID-19 on distribution, join us for our weekly MDM Live webcast, taking place Friday at 2 p.m. EDT. Click here to see what’s on tap for the next few episodes and to register.

Related Posts

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!


articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events



You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.