January 17, 2025
WINONA, Minn.–(BUSINESS WIRE)– Fastenal Company (Nasdaq:FAST) (collectively referred to as ‘Fastenal’ or by terms such as ‘we’, ‘our’, or ‘us’), a leader in the wholesale distribution of industrial and construction supplies, today announced its financial results for the year and quarter ended December 31, 2024. Except for share and per share information, or as otherwise noted below, dollar amounts are stated in millions. Throughout this document, percentage and dollar calculations, which are based on non-rounded dollar values, may not be able to be recalculated using the dollar values included in this document due to the rounding of those dollar values. References to daily sales rate (DSR) change may reflect either growth (positive) or contraction (negative) for the applicable period. Beginning in the first quarter of 2024, references to ‘net earnings’, ‘operating and administrative expenses’, and ‘earnings before income taxes’ have been revised in our condensed consolidated financial statements and financial reports, including this document, to ‘net income’, ‘selling, general, and administrative (SG&A) expenses’, and ‘income before income taxes’, respectively, and are calculated in conformity with U.S. GAAP.
QUARTERLY RESULTS OF OPERATIONS
Sales
Net sales increased $65.9, or 3.7%, in the fourth quarter of 2024 when compared to the fourth quarter of 2023. There was one more selling day in the fourth quarter of 2024 relative to the prior year period and, taking this into consideration, our net daily sales increased 2.1% in the fourth quarter of 2024 compared to the fourth quarter of 2023. The slow rate of growth reflects continuation of the soft manufacturing environment that has been sustained throughout 2024. This was exacerbated by many of our largest customers enacting unusually sharp production cuts in the last two weeks of December during holiday-related plant shutdowns. Changes in foreign exchange rates negatively affected sales in the fourth quarter of 2024 by approximately 20 basis points as compared to positively affecting sales in the fourth quarter of 2023 by approximately 10 basis points.
An increase in unit sales in the fourth quarter of 2024 was primarily due to growth at Onsite locations opened in the last two years and, to a lesser extent, larger customers not serviced through an Onsite. This more than offset weaker activity with smaller customers and non-manufacturing end markets. The impact of product pricing on net sales in the fourth quarter of 2024 was not material, in contrast to the fourth quarter of 2023, when the impact of product pricing was modestly positive. Price levels remained relatively stable in the fourth quarter of 2024.
From a product standpoint, we have three categories: fasteners, including fasteners used in original equipment manufacturing (OEM) and maintenance, repair, and operations (MRO), safety supplies, and other product lines, the latter of which includes eight smaller product categories, such as tools, janitorial supplies, and cutting tools. The rate of contraction of our fastener line eased in the fourth quarter of 2024, but continued to lag our non-fastener product lines. Product categories, like fasteners, that are more closely aligned with final goods production tend to be more significantly impacted by periods of weak industrial production, such as we are currently experiencing. We achieved growth in our safety category reflecting the lower volatility of PPE demand and our success in growing our vending installed base. Moderation in the rate of growth reflects a difficult comparison in our warehousing end market as a result of strong holiday-related shipments we experienced in the fourth quarter of 2023. Other product lines experienced stronger growth from MRO-oriented lines, such as electrical and janitorial, than from OEM-oriented lines, such as tools, cutting tool, and welding and abrasives. The DSR change when compared to the same period in the prior year and the percent of sales in the period were as follows:
| DSR Change Three-month Period |
| % of Sales Three-month Period | ||||||
| 2024 | 2023 |
| 2024 | 2023 | ||||
OEM fasteners | 0.4 | % | -1.2 | % |
| 19.0 | % | 19.4 | % |
MRO fasteners | -4.5 | % | -4.1 | % |
| 10.9 | % | 11.7 | % |
Total fasteners | -1.4 | % | -2.3 | % |
| 29.9 | % | 31.1 | % |
Safety supplies | 4.8 | % | 9.4 | % |
| 23.0 | % | 22.5 | % |
Other product lines | 4.0 | % | 5.3 | % |
| 47.1 | % | 46.4 | % |
Total non-fasteners | 4.3 | % | 6.6 | % |
| 70.1 | % | 68.9 | % |
From an end market standpoint, we have five categories: heavy manufacturing, other manufacturing, non-residential construction, reseller, and other, the latter of which includes government/education and transportation/warehousing. Our manufacturing end markets outperformed primarily due to the relative strength we are experiencing with key account customers with significant managed spend where our service model and technology is particularly impactful. This disproportionately benefits manufacturing customers. We believe weakness in our reseller end market reflected efforts in many industries to reduce channel inventories. Other end market sales were favorably impacted by growth with state and local government customers and data center customers. The DSR change when compared to the same period in the prior year and the percent of sales in the period were as follows:
We report our customers in two categories: national accounts, which are customers with significant revenue potential and a national, multi-site contract, and non-national accounts, which include large regional customers, small local customers, and government customers. We continued to experience a divergence in the performance of our national account customers versus our non-national account customers, which relates to the relative growth of our sales through Onsite locations and larger, key accounts. The DSR change when compared to the same period in the prior year and the percent of sales in the period were as follows:
Growth Drivers
- We signed 56 new Onsite locations (defined as dedicated sales and service provided from within, or in proximity to, the customer’s facility) in the fourth quarter of 2024, resulting in 358 new Onsite location signings for the full year. The full year number was below our goal of 375 to 400 signings, though did constitute an increase from 2023 (326 signings) and was consistent with previous peak signing years in 2019 (362 signings) and 2022 (356 signings). We had 2,031 active sites on December 31, 2024, which represented an increase of 11.5% from December 31, 2023. Daily sales through our Onsite locations, excluding sales transferred from branches to new Onsites, grew at a mid single-digit rate in the fourth quarter of 2024 over the fourth quarter of 2023. This growth is due to contributions from Onsites activated and implemented in 2024 and 2023, which more than offset the impact of closures and the associated decline in revenues from Onsites activated prior to 2023.
- FMI Technology comprises our FASTStock℠(scanned stocking locations), FASTBin®(infrared, RFID, and scaled bins), and FASTVend®(vending devices) offerings. FASTStock’s fulfillment processing technology is not embedded, is relatively less expensive and highly flexible in application, and delivered using our proprietary mobility technology. FASTBin and FASTVend incorporate highly efficient and powerful embedded data tracking and fulfillment processing technologies. The first statistic is a weighted FMI® measure , which combines the signings and installations of FASTBin and FASTVend in a standardized machine equivalent unit (MEU) based on the expected output of each type of device. We do not include FASTStock in this measurement because scanned stocking locations can take many forms, such as bins, shelves, cabinets, pallets, etc., that cannot be converted into a standardized MEU. The second statistic issales through FMI Technology, which combines the sales through FASTStock, FASTBin, and FASTVend. A portion of the growth in sales experienced by FMI, particularly FASTStock and FASTBin, reflects the migration of products from less efficient non-digital stocking locations to more efficient, digital stocking locations.
- We signed 6,790 weighted FASTBin and FASTVend devices in the fourth quarter of 2024, resulting in 27,984 new FASTBin and FASTVend signings for the full year. This was consistent with our goal of signing between 26,000 and 28,000 MEUs in 2024. Our goal for weighted FASTBin and FASTVend device signings in 2025 is between 28,000 to 30,000 MEUs.
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SOURCE: Fastenal Company
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