The industrial and construction supplier continued to benefit from the underlying market demand which resulted in higher sales. Industrial vending and onsite businesses drove the growth in the second quarter. Higher freight expenses and change in customer and product mix adversely affected the quarterly results apart from the 10% increase in employee-related expenses.
You may also like: Fastenal Q2 2018 earnings transcript
As in the past, Fastenal’s vending and onsite businesses are expected to be the growth drivers for the recently ended third quarter. However, higher freight expenses and change in product mix remains to be a concern. As of August end, total full-time equivalent (FTE) headcount rose 4.8% to 18,422 compared to the prior year and this compares to 18,444 at the end of the second quarter.
The Winona, Minnesota-based company’s monthly sales results have been encouraging so far in this quarter. July and August month sales rose 17.6% and 13.7% to $411.6 million and $467.9 million, respectively. Daily sales increased 12% and 13.7% for July and August versus the year-ago periods.
Fastenal’s peers CSX Corp (CSX) and W.W. Grainger (GWW) are expected to report earnings on October 16. For the September quarter, analysts forecast CSX to report EPS of $0.91 and GWW to post EPS of $3.96.
Shares of FAST, which ended down 1.83% at $55.64 at close on Tuesday, gained 2% so far this year and 22% in the past 12 months.