Fastenal’s Second Quarter Results a Positive Read Through for the Broader Economy

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By Brian Nelson, CFA

On July 14, Fastenal (FAST) reported better than expected second quarter results with revenue and GAAP earnings coming in ahead of the consensus forecasts. The wholesale distributor of industrial and construction supplies recorded net sales growth of 8.6% in the quarter, with gross profit expanding 9.2% and operating income jumping 12.7%. Income before income taxes advanced 13%, while net income and diluted net income per share increased 12.8% and 12.7%, respectively.

The strength in sales in the quarter was “due to a growth in the number of customer sites spending $10k or more per month with Fastenal and, to a lesser degree, growth in average monthly sales per customer site across all customer spend categories. The impact of product pricing on net sales in the second quarter of 2025 was an increase of 140-170 basis points, in contrast to the second quarter of 2024, which experienced a decline of 30-60 basis points.” Here is more detail on the quarter:

With industrial production still sluggish in the second quarter of 2025, the performance of our fastener product line continued to lag our non-fastener product lines. The fastener category experienced improved growth in the second quarter of 2025, as compared to the second quarter of 2024. This was driven by easier comparisons, increased contribution from large customer signings, better product availability in our distribution centers, and pricing actions implemented in the second quarter of 2025. We achieved growth in our safety category reflecting the lower volatility of PPE demand, which tends to be utilized in more MRO than OEM applications, growth of our vending installed base, and success with warehousing and data center customers. Other product lines experienced higher growth from MRO-oriented lines, such as electrical and janitorial, rather than from OEM-oriented lines, such as cutting tools and welding/abrasives, reflecting continued soft manufacturing demand.

Fastenal’s “manufacturing end markets outperformed primarily due to the relative strength (it is) experiencing with key account customers with significant managed spend where (its) service model and technology are particularly impactful. This disproportionately benefits manufacturing customers. The non-residential construction end market experienced growth for the first time in ten consecutive quarters. Other end market sales were favorably impacted by growth with warehousing and storage, and data center customers, which were partially offset by declining sales with resellers.” We liked Fastenal’s results, and the report is a positive read through to the broader U.S. economy.

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