Industrial supplies distributor and supply chain solutions provider Fastenal reported its 2022 third-quarter financial results on Oct. 13, reporting continued double-digit growth in both year-over-year sales and profit, though slower than in 2Q.
The Winona, Minnesota-based company reported 3Q total sales of $1.8 billion, up 16% year-over-year, which was a growth deceleration of 18% from 2Q. The year-over-year and sequential growth changes in daily sales were identical. Fastenal’s 3Q gross profit of $826.5 million grew 14.8% year-over-year, while its gross margin of 45.9% fell 40 basis points year-over-year. The company’s 3Q operating profit of $379 million grew 19.1% year-over-year on margin of 21.0% which grew 50 basis points year-over-year.
Fastenal’s total 3Q net profit of $285 million grew 16.9% year-over-year and narrowly trailed 2Q’s $287 million.
The company estimates that adverse weather from Hurricane Ian — which devastated Florida’s Gulf Coast when it made landfall Sept. 28 — hurt daily sales rates by 0.5% in the quarter.
Fastenal said higher unit sales in 3Q drove the year-over-year sales increase due to solid underlying demand in markets tied to industrial capital goods and commodities — more than offsetting softer markets tied to consumer goods and relatively lower growth in construction. Foreign exchange dragged on 3Q sales by about 60 basis points.
Meanwhile, the company said pricing impacted sales by 550 to 580 basis points year-over-year, compared to 660 to 690 bps in 2Q. Fastenal said it didn’t take any broad pricing actions during 3Q (it didn’t in 2Q, either) and that price levels in the market remained stable.
Other stats from Fastenal’s 3Q:
- 3Q fastener daily sales grew 18.2% year-over-year, trailing the 20.2% seen in 3Q 2021.
- 3Q safety supplies daily sales grew 12.4% year-over-year, compared to a 2.9% decline in 3Q 2021.
- 3Q daily sales of all other products grew 15.4% year-over-year, compared to 9.2% in 3Q 2021.
- 3Q daily sales to manufacturing customers grew 22.6% year-over-year, topping the 20.8% seen in 3Q 2021.
- 3Q daily sales to non-residential construction customers grew 5.2% year-over-year, trailing the 10.5% in 3Q 2021.
- 3Q daily sales to all other customers declined 1.4% year-over-year, compared to a 16.2% decline in 3Q 2021.
- Fastenal signed 86 new Onsite locations in 3Q, bringing its year-to-date signings to 294. It had 1,567 active sites on Sept. 30, up 14.6% from a year earlier. Daily sales from Onsite locations grew better than 20% year-over-year during 3Q.
- Fastenal’s FMI Technology (FASTStock, FASTBin and FASTVend) sales totaled $673 million during 3Q, up 29.8%. year-over-year and comprised 36.9% of all 3Q sales — up from 35.6% in 2Q and 33.0% in 3Q 2021.
- Fastenal’s eCommerce business saw 3Q daily sales grow 50.2% year-over-year and represent 18.0% of total company revenue, compared to 52.7% and 17.1% in 2Q, respectively.
- Fastenal’s total digital footprint (FMI plus eCommerce) represented 49.5% of 3Q sales, up from 47.9% in 2Q and 43.7% in 3Q 2021.
Fastenal reported September total sales of $604 million, up 13.7% year-over-year, with daily sales up that same amount. Down from August’s 16.1%, it was the smallest year-over-year monthly daily sales gain since November 2021’s 13.2%.
Other Fastenal September notes:
- By geography, September daily sales grew 13.7% year-over-year in the U.S. (16.5% in August); grew 19.8% in Canada/Mexico (17.5% in August); and declined 4.5% in the rest of international (grew 1.5% in August).
- By end market, September daily sales grew 21.5% year-over-year to manufacturing customers (23.5% in August) and grew 1.4% to customers in non-residential construction (5.8% in August).
- By product line, September daily sales of fasteners grew 15.1% year-over-year (19.8% in August); safety grew 12% (11.7% in August); and all other sales grew 12.9% (14.5% in August).
Strong Headcount Growth
Fastenal ended September with a total company headcount of 22,025, up 0.7% from August and up 8.9% year-over-year. The distributor added headcount in all areas of staff, including month-to-month gains of 7.1% in in-market sales personnel; 16.5% in non-in-market selling; 12.9% in distribution/transportation; 8.9% in manufacturing; and 9.4% in organizational support.