Adverse weather factors into Fastenal Q1 results
Fastenal reported net sales increased $36.1 million, or 1.9%, in the first quarter of 2024 when compared to the first quarter of 2023.
The effect of adverse weather in the first quarter of 2024 was a reduction in sales by 35 to 55 basis points as compared to a reduction in sales in the first quarter of 2023 by 20 to 40 basis points, resulting in a net negative impact from adverse weather in the first quarter of 2024 of 10 to 30 basis points. The effect of foreign exchange on sales was not material in the first quarter of 2024 as compared to negatively affecting sales in the first quarter of 2023 by approximately 70 basis points.
The company said it experienced higher unit sales in the first quarter of 2024 primarily due to growth with larger customers and Onsite locations opened in the last two years. The impact of product pricing was not material to net sales in the first quarter of 2024, as compared to the impact of product pricing on net sales in the first quarter of 2023 of 290 to 320 basis points. Incremental pricing actions over the past twelve months have been modest in scope, resulting in mostly stable price levels through the first quarter of 2024.
Fastenal says it continued to experience a divergence in the performance of its fastener versus non-fastener product lines in the first quarter of 2024, which it believes relates to three factors. First, fasteners are more heavily oriented toward production of final goods than maintenance, which results in greater susceptibility to periods of weaker industrial production. Second, pricing for fasteners has decelerated at a faster pace than non-fastener products. Third, while the rate of outgrowth has slowed relative to what it experienced during the final two months of 2023, the company continued to experience relatively faster growth with its retailer-oriented customers due to market share gains, product mix, and easier comparisons. This factor primarily benefited its safety product line.
Read more details about Fastenal's first quarter financial results here.
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