01—Abstract
Summary
Summary of the 10-Q filed October 19, 2026. Cited figures are marked; the original filing is the authoritative source.
Fastenal Company reported strong financial performance for the nine months and third quarter ended September 30, 2026.
Net sales increased by 14.2% for the nine months and 15.5% for the third quarter, demonstrating robust top-line growth driven by improved customer contract signings, product pricing, and a modest improvement in industrial production. Net income also saw significant increases, growing by 16.6% for the nine months and 19.7% for the third quarter, leading to diluted earnings per share of $0.98a and $0.35, respectively. The company's operational efficiency is highlighted by the improvement in SG&A expenses as a percentage of net sales, down to 23.3% for the third quarter from 24.6% in the prior year, reflecting effective cost management.
While gross profit as a percentage of net sales saw a slight decrease due to shifts in customer mix towards larger accounts and price/cost dynamics, absolute gross profit continued to grow. Fastenal's commitment to returning value to shareholders is evident through significant dividend payments and share repurchases.
02—Key points
Key Highlights
- Net sales grew by 15.5% year-over-year in the third quarter of 2026 to $2.46 billion, and by 14.2% for the first nine months to $7.05 billion.
- Diluted net income per share increased to $0.35 for the third quarter and $0.98 for the nine-month period, up from $0.29 and $0.84, respectively, in the prior year.
- Operating income margin improved to 21.5% in Q3 2026 from 20.7% in Q3 2025, showcasing enhanced operational leverage.
- SG&A expenses as a percentage of net sales improved significantly, decreasing to 23.3% in Q3 2026 from 24.6% in Q3 2025.
- The company continues to invest in digital technologies, with FMI sales (FASTStock, FASTBin, FASTVend) increasing by 14.6% to $1.12 billion in Q3 2026, representing 44.8% of total sales.
- Fastenal returned substantial capital to shareholders, with $849.1 million in dividends and $80.0 million in share repurchases for the first nine months of 2026.
- Cash flow from operations remained strong, providing $421.6 million in Q3 2026 and $1,065.7 million for the nine-month period.
03—Questions
Frequently Asked Questions
What were the main drivers of Fastenal's sales growth in the third quarter of 2026?
Fastenal's sales growth in the third quarter of 2026 was primarily driven by improved customer contract signings since early 2024, positive product pricing, and a modest recovery in industrial production. Growth in direct materials, particularly fasteners, and continued strength with manufacturing customers also contributed significantly.
How did Fastenal manage its operating expenses in the recent quarter?
Fastenal demonstrated effective expense management, with Selling, General, and Administrative (SG&A) expenses decreasing to 23.3% of net sales in the third quarter of 2026, down from 24.6% in the prior year. This improvement was attributed to employee-related expense leverage due to increased labor productivity and fixed cost leverage for occupancy expenses.
What is the company's outlook on its digital initiatives, such as FMI technology?
Fastenal continues to see strong performance from its digital initiatives. FMI sales, which include FASTStock, FASTBin, and FASTVend, increased by 14.6% in the third quarter of 2026, representing 44.8% of total sales. The company also signed 7,484 weighted FASTBin and FASTVend devices in the quarter, indicating ongoing investment and adoption of its technology solutions.
How is Fastenal returning capital to shareholders?
Fastenal is actively returning capital to shareholders through dividends and share repurchases. For the nine months ended September 30, 2026, the company returned $849.1 million in dividends and $80.0 million in share repurchases, totaling $929.2 million, which represented 82.7% of net income for the period.
04—Continue