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.