The strong performance was driven by a 13.1% spike in sales to $1.27 billion, marking the fifth consecutive double-digit increase. The top-line growth is attributable to the underlying market demand, particularly for industrial vending and Onsite locations. The company also benefitted from the robust non-residential construction sales and demand in the manufacturing sector.
During the second quarter, total Onsite signings rose 19.1% to 81, raising the number of active sites to 761. Looking ahead, the company expects to sign 360-385 Onsites in the whole of 2018. A total of 5,537 vending devices were signed during the three-month period, up 13.4% from the year-ago quarter.
The daily sales of Fastenal products grew 11.1% in the second quarter, while those of non-fastener products advanced 14.8%.
The positive results triggered a stock rally, and the company’s stock gained significantly in premarket trading
Of late, Fastenal has been realigning its operations to overcome the stress on margins due to rising costs and a not-so-impressive revision of the product portfolio. The company continues to benefit from last year’s acquisition of the assets of its regional distribution partner Manufacturer’s Supply Company.
Earlier this week, the management declared a cash dividend of $0.40 per share on the common stock – to be paid on August 22, 2018, to shareholders as on July 25, 2018.
Fastenal shares, which have been trading higher since last week when it plunged to the lowest level so far this year, gained nearly 7% in premarket trading Wednesday.