Rising financing costs for big residential projects due to elevated interest rates and adverse weather events have slowed down U.S. construction activity, hurting companies like Fastenal.
Fasteners, one of the wholesale distributor’s core segments, saw its sales fall to 31.5% of the company’s total sales, compared with 33.6% a year earlier.
Daily sales rate for fasteners declined 4.4%, even as sales of safety supplies jumped 8.3%.
The nuts and bolts maker’s gross profit margin fell to 45.5% in the quarter ended March 31, from 45.7% a year ago.
“The effect of adverse weather in the first quarter of 2024 was a reduction in sales by 35 to 55 basis points,” the company said.
Net income rose slightly to $297.7 million, in the first quarter, from $295.1 million a year earlier. It reported a profit of 52 cents per share.
Analysts on average had expected the company to report earnings of 53 cents per share, according to LSEG data. Its revenue rose 1.9% to $1.90 billion, falling short of analysts’ estimates of $1.91 billion.

SOURCE: Reuters

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