Fastenal Company (NASDAQ:FAST) has reported its financial results for the first quarter ended March 31, 2025. The company's net sales increased by $64.3 million, or 3.4%, compared to the first quarter of 2024. The daily sales rate grew by 5.0%, reaching $31.1 million for the quarter. Gross profit as a percentage of net sales saw a slight decrease to 45.1% from 45.5% in the same period last year. Operating income also experienced a marginal decline to 20.1% of net sales from 20.6% in the first quarter of 2024.
The company's performance in different product categories and end markets varied. Fastener product lines, including those used in original equipment manufacturing (OEM) and maintenance, repair, and operations (MRO), experienced growth after seven consecutive flat or declining quarters. Safety supplies also saw an increase, while other product lines, particularly those oriented towards MRO rather than OEM, contributed to overall growth.
End market sales were driven by strong performance in heavy manufacturing and other manufacturing sectors, while non-residential construction experienced a decline. Contract sales outperformed non-contract sales, reflecting incremental sales from strong customer signings achieved over the last 12 months.
Fastenal's daily sales rate and net sales growth were also influenced by the implementation of the Fastenal Managed Inventory (FMI) technology, comprising FastStock, FastBin, and FastVend offerings. In the first quarter of 2025, the company signed 6,418 weighted FMI devices, with a goal of achieving between 28,000 to 30,000 MEUs for the full year.
However, despite the growth in sales, the company's gross profit percentage was impacted by factors such as customer and product mix, higher fleet and transportation costs, and increased supplier incentives. Selling, general, and administrative (SG&A) expenses also increased to 25.0% of net sales from 24.9% in the first quarter of 2024, attributed to higher employee-related expenses and occupancy-related expenses.
Fastenal's net income for the first quarter of 2025 was $298.7 million, representing a marginal increase of 0.3% compared to the same period in 2024. Diluted net income per share saw a minimal rise of 0.2% to $0.52.
In terms of interest, the company reported a net interest expense of $0.8 million in the first quarter of 2025, compared to $0.4 million in the first quarter of 2024. Income tax expense for the period was $94.4 million, or 24.0% of income before income taxes, slightly higher than the 23.6% recorded in the first quarter of 2024.
These figures and performance indicators provide a comprehensive view of Fastenal's financial position and operational results for the first quarter of 2025, highlighting both areas of growth and challenges compared to the same period in 2024. Following these announcements, the company's shares moved 6.3%, and are now trading at a price of $80.58. For more information, read the company's full 8-K submission here.
