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Fastenal continues momentum as August daily sales rise 15%

By , 2014-09-17 11:53:36

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Fastenal Company’s sales continued to improve this year as the industrial and construction supplies wholesale distributor recorded six consecutive months of double-digit growth in daily sales. August net sales, released last week, rose 9.8% year over year to $326.9 million.

Daily sales for the month grew 15% to $15.57 million, much better than 5.5% in August last year. Moreover, daily sales increase in August was better than 14.7% growth in July and in all prior months of the year. Currency was a 0.3% headwind in the month. Fastenal serves customers in the manufacturing and non-residential construction markets.

Daily sales to manufacturing customers (representing almost 50% of revenues) grew 14%, much better than 6.1% last year and 12.9% in July as manufacturing activity picked up. Daily sales to non-residential construction customers (representing 20% to 25% of revenues) grew 9.4%, much better than 7.3% last year and 8.4% in July due to improvement in construction trends.

After struggling for several quarters, Fastenal’s top line turned around in the first quarter of 2014 which continued into the second. However, end-market slowdown and broader economic uncertainty were lowering fastener sales which, in turn, weighed down Fastenal’s top line.

In order to accelerate sales growth, Fastenal took the strategic decision to increase sales personnel at the stores which largely boosted sales this year. Importantly, easy comparisons from a relatively weaker 2013 also contributed to the sales growth rates in 2014.

In fact, fasteners also recovered slightly in the first half after struggling in 2013. Moreover, vending trends improved in both the quarters of 2014 and the construction business is showing signs of improvement.

 

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