Fastenal reports 3.7% net sales increase for Q4 YoY
Fastenal Co. reported its net sales increased 3.7%, in the fourth quarter of 2024 when compared to the fourth quarter of 2023.
Factoring in one more selling day in the fourth quarter of 2024 versus the prior year period, the company's net daily sales increased 2.1% year over year.
According to a press statement, the slow rate of growth reflects continuation of the soft manufacturing environment that has been sustained throughout 2024. This was exacerbated by many of Fastenal's largest customers enacting unusually sharp production cuts in the last two weeks of December during holiday-related plant shutdowns.
Changes in foreign exchange rates negatively affected sales in the fourth quarter of 2024 by approximately 20 basis points as compared to positively affecting sales in the fourth quarter of 2023 by approximately 10 basis points.
An increase in unit sales in the fourth quarter of 2024 was primarily due to growth at Onsite locations opened in the last two years and, to a lesser extent, larger customers not serviced through an Onsite. This more than offset weaker activity with smaller customers and non-manufacturing end markets. The impact of product pricing on net sales in the fourth quarter of 2024 was not material, in contrast to the fourth quarter of 2023, when the impact of product pricing was modestly positive. Price levels remained relatively stable in the fourth quarter of 2024.
The rate of contraction of Fastenal's fastener line eased in the fourth quarter but continued to lag its non-fastener product lines.
"Product categories, like fasteners, that are more closely aligned with final goods production tend to be more significantly impacted by periods of weak industrial production, such as we are currently experiencing," a news release stated. "We achieved growth in our safety category reflecting the lower volatility of PPE demand and our success in growing our vending installed base. Moderation in the rate of growth reflects a difficult comparison in our warehousing end market as a result of strong holiday-related shipments we experienced in the fourth quarter of 2023. Other product lines experienced stronger growth from MRO-oriented lines, such as electrical and janitorial, than from OEM-oriented lines, such as tools, cutting tool, and welding and abrasives.
Growth Drivers
Fastenal signed 56 new Onsite locations (defined as dedicated sales and service provided from within, or in proximity to, the customer's facility) in the fourth quarter, resulting in 358 new Onsite location signings for the full year. The full year number was below their goal of 375 to 400 signings.
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