Why Industrial And Construction Supplies Distributor Fastenal's Shares Are Down Today

Zinger Key Points
  • Fastenal's Q1 FY24 sales grew 1.9% YoY, reaching $1.895 billion, missing consensus expectations.
  • Fastenal's digital footprint grows to 59.2% of sales, up from 54.1% in Q1 2023.

Fastenal Company FAST shares are trading lower after the company reported first-quarter FY24 sales growth of 1.9% Y/Y to $1.895 billion, missing the consensus of $1.914 billion.

Net daily sales growth increased 1.9% Y/Y to $29.6 million. The company experienced higher unit sales in the first quarter of 2024 primarily led by growth with larger customers and Onsite locations opened in the last two years. 

Weighted FASTBin/FASTVend signings (MEUs) rose 14.0% Y/Y to 6,726; Weighted FASTBin/FASTVend installations rose 10.5% Y/Y.

FAST's Digital Footprint represented 59.2% of sales in the quarter, an increase from 54.1% in the first quarter of 2023.

The gross margin contracted to 45.5% from 45.7% owing to the negative impact of customer and product mix.

Operating income was $390.2 million (-0.8% Y/Y), and the margin was 20.6%, a decline from 21.2% in the same quarter of 2023.

The company's first-quarter EPS was $0.52, missing the consensus of $0.53.

Fastenal's operating cash flow for the quarter was $335.6 million, a decrease of 13.6% Y/Y.

The company held cash and equivalents of $237.1 million as of March 31, 2024.

Dividend: The company declared a dividend per share of $0.39, payable on May 23, 2024, to shareholders of record at the close of business on April 25, 2024.

The company signed 102 new Onsite locations in the quarter and had 1,872 active sites on March 31, 2024 (+11.8% Y/Y).

Daily sales through the Onsite locations, excluding sales transferred from branches to new Onsites, grew at a low single-digit rate in the first quarter of 2024. 

Outlook: For 2024, Fastenal continues to expect Onsite signings of 375 to 400 and weighted FASTBin and FASTVend device signings to be 26,000 to 28,000 MEUs.

Investors can gain exposure to the stock via Motley Fool Mid-Cap Growth ETF TMFM and IShares U.S. Basic Materials ETF IYM.

Also ReadFastenal Gears Up For Q1 Print; Here Are The Recent Forecast Changes From Wall Street’s Most Accurate Analysts

Price Action: FAST shares are down 4.47% at $71.40 premarket on the last check Thursday.

Photo via Wikimedia Commons

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