Fastenal (FAST) Q4 Earnings & Revenues Beat, Shares Rise

Fastenal Company FAST ended 2021 on a solid note. The company’s earnings and revenues not only beat the Zacks Consensus Estimate but also improved on a year-over-year basis, given strong demand for manufacturing and construction equipment and supplies along with higher pricing.

Its shares jumped more than 3.4% in the pre-market trading session on Jan 19, after it reported the results.

Earnings & Sales in Detail

The company reported earnings of 40 cents per share, which topped the consensus mark of 37 cents by 8.1% and grew 17.6% from the year-ago period.

Net sales totaled $1,531.8 million, beating the consensus mark of $1,507 million by 1.6% and increasing 12.8% from the year-ago figure of $1,358 million.

It reported daily sales of $24.7 million, reflecting an increase of 14.6% year over year. On a monthly basis, daily sales improved 16.5%, 13.2% and 14.1% in December, November and October, respectively, year over year.

Daily sales of Fastener products (mainly used for industrial production and accounting for approximately 33.5% of fourth-quarter sales) rose 24.2% year over year, backed by higher manufacturing and construction demand as well as increased pricing. Sales of safety products (accounting for 21.4% of fourth-quarter sales) grew 3.5% on a daily basis. The upside was mainly driven by solid growth and higher pricing for traditional manufacturing and construction clients. Sales of the remaining products (accounting for 45.1% of fourth-quarter sales) grew 12.8% year over year.

Fastenal Company Price, Consensus and EPS Surprise

Fastenal Company Price, Consensus and EPS Surprise

Fastenal Company price-consensus-eps-surprise-chart | Fastenal Company Quote

Vending Trends & Other Growth Drivers

Fastenal signed 274 new Onsite locations during 2021. As of Dec 31, 2021, the company had 1,416 active sites, up 11.9% from the year-ago period. Daily sales through Onsite locations (excluding sales transferred from branches to new Onsites) increased more than 20% from a year ago.

The company continues to expect 375-400 annual Onsite signings in 2022.

Daily sales through weighted FMI devices grew 47.7% for the fourth quarter and represented 35.1% of net sales.

Daily sales to national account customers (representing 57.8% of total quarterly revenues) increased 19.9% on a year-over-year basis for fourth-quarter 2021. Daily sales to non-national account customers (which include government customers and represent 42.2% of total quarterly revenues) rose 7.6% from the prior-year quarter.

Margins

Gross margin of 46.5% for the quarter improved 90 basis points or bps from the prior-year period. The improvement was driven by higher product margin related to safety products and overhead absorption/organizational cost leverage.

Also, operating margin improved 10 bps to 19.6% from the year-ago figure of 19.5%.

2021 Highlights

Net sales came in at $6,010.9 million, up 6.4% from the 2020 level. Earnings of $1.60 per share advanced 7.4% from 2020. Gross margin of 46.2% expanded 70 bps year over year.

Financials

Cash and cash equivalents were $236.2 million as of Dec 31, 2021, slightly down from $245.7 million on Dec 31, 2020. Long-term debt at quarter-end was $330 million, down from $365 million at 2020-end.

For 2021, cash provided by operating activities totaled $770.1 million compared with $1,101.8 million in the year-ago period.

Zacks Rank

Fastenal currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Top-Ranked Stocks in Broader Sector

Other top-ranked stocks from the Zacks Retail-Wholesale sector include Arcos Dorados Holdings Inc. ARCO, Genesco Inc. GCO and Macy's, Inc. M.

Arcos Dorados sports a Zacks Rank #1. It has long-term earnings growth of 42.9%. Shares of Arcos Dorados have increased 8.6% in the past year.

The Zacks Consensus Estimate for ARCO’s 2022 sales and earnings per share (EPS) suggests growth of 10.4% and 255.6%, respectively, from the year-ago levels.

Genesco sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 2,739.6%, on average. Shares of Genesco have surged 63.6% in the past year.

The Zacks Consensus Estimate for GCO’s 2022 sales and EPS indicates a rise of 35.6% and 673.7%, respectively, from the year-ago levels.

Macy's currently sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 313.5%, on average. Shares of Macy’s have increased 106.3% in the past year.

The Zacks Consensus Estimate for M's 2022 sales and EPS suggests growth of 39.6% and 320.4%, respectively, from the year-ago levels.

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