Fastenal’s third quarter showed a sharp step-up in sales and earnings, with daily sales rising 15.5% from a year earlier to $38.5 million from $33.3 million.
Net sales increased to $2.463 billion from $2.133 billion, up $330 million year over year. Gross profit climbed 14.4% to $1.105 billion from $965.8 million, while gross margin slipped to 44.8% from 45.3%.
The biggest operating improvement came below gross profit. SG&A expenses rose to $573.9 million from $524.3 million, but fell to 23.3% of sales from 24.6%, a 130-basis-point improvement. That helped operating income jump 20.2% to $530.8 million from $441.5 million, and pushed operating margin to 21.5% from 20.7%.
Net income rose 19.7% to $401.6 million from $335.5 million. Diluted earnings per share increased to $0.35 from $0.29.
On the nine-month view, net sales reached $7.052 billion, up 14.2% from $6.173 billion a year earlier. Operating income rose 16.4% to $1.480 billion, and net income increased 16.6% to $1.124 billion.
Customer mix continued to skew toward larger accounts. Contract sales advanced 18.8% in the quarter, compared with 7.8% growth in non-contract sales. Contract business accounted for 76.5% of sales, up from 73.8% a year earlier.
Manufacturing remained the larger end market, with total manufacturing sales up 17.2% and representing 76.6% of quarterly sales, compared with 75.9% a year earlier. Heavy manufacturing was the strongest segment, rising 20.2% and making up 44.6% of sales, up from 43.1%.
Site growth also continued. Fastenal served 3,288 customer sites generating at least $50,000 a month in the quarter, up from 2,771 a year earlier. Those sites produced $1.457 billion in sales versus $1.142 billion. Overall customer sites totaled 90,759, down from 98,823, but average monthly sales per site increased to $9,047 from $7,149.
Digital activity kept expanding. Weighted fastbin and fastvend signings reached 7,484 in the quarter, up from 7,050. Fastbin and fastvend sales rose 17.6% to $827.2 million, while total FMI sales increased 14.6% to $1.121 billion. Digital footprint sales climbed 16.1% to $1.537 billion.
Cash flow from operations was $421.6 million, up 9.0% from a year earlier and equal to 105.0% of net income, down from 115.3% last year. Fastenal returned $328 million to shareholders through dividends and buybacks, equal to 82% of net income. The market has reacted to these announcements by moving the company's shares -0.12% to a price of $51.43. For the full picture, make sure to review FASTENAL CO's 8-K report.
