Summary
Fastenal Company reported its financial results for the six months ended June 30, 2016, reflecting a period of mixed performance. While net sales saw a modest increase of 2.6% year-over-year to $2,000,967 thousand for the six months, profitability experienced a decline. Net earnings for the period were $257,748 thousand, a decrease from $267,963 thousand in the prior year, leading to a slight dip in both basic and diluted earnings per share. This performance was impacted by a decrease in gross profit margin and an increase in operating and administrative expenses as a percentage of net sales. The company highlighted ongoing investments in growth drivers, including expanding its industrial vending machine footprint and employee headcount, particularly in support roles. However, sales trends indicated weakness in key end markets, specifically manufacturing and non-residential construction, with a notable increase in contracting sales within its top 100 customers during the second quarter. Despite these headwinds, Fastenal continues to focus on its customer service model and strategic initiatives like the CSP 16 format to enhance operational efficiency and product availability.
Financial Highlights
51 data points| Revenue | $1.01B |
| Cost of Revenue | $512.70M |
| Gross Profit | $501.60M |
| SG&A Expenses | $292.60M |
| Operating Income | $209.20M |
| Interest Expense | $1.50M |
| Net Income | $131.50M |
| EPS (Basic) | $0.12 |
| EPS (Diluted) | $0.11 |
| Shares Outstanding (Basic) | 1.16B |
| Shares Outstanding (Diluted) | 1.16B |
Key Highlights
- 1Net sales for the first six months of 2016 increased by 2.6% to $2,000,967 thousand, compared to $1,951,144 thousand in the same period of 2015.
- 2Net earnings for the six months ended June 30, 2016, decreased to $257,748 thousand from $267,963 thousand in the prior year.
- 3Diluted earnings per share for the six months decreased to $0.89 from $0.91 in the prior year.
- 4Gross profit margin declined from 50.5% in the first six months of 2015 to 49.6% in the same period of 2016, primarily due to changes in product and customer mix.
- 5Operating and administrative expenses increased as a percentage of net sales, rising from 28.6% in the first six months of 2015 to 29.1% in 2016.
- 6The company's industrial vending machine installations increased by 15.3% to 58,346 devices by June 30, 2016.
- 7Sales to manufacturing customers saw only a 0.7% growth in the first six months of 2016, while non-residential construction sales contracted by 0.4%.