July 14, 2026

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Fastenal Company (NASDAQ: FAST) reported second-quarter 2026 results with revenue above expectations, earnings in line with estimates, and strong daily sales growth driven by larger customer wins, pricing actions, and broad-based demand across core end markets.
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Fastenal is a global supply chain services company that provides fasteners, safety products, cutting tools, industrial supplies, inventory management, onsite services, vending solutions, and digital procurement tools to manufacturing, construction, and industrial customers.
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The company reported EPS of $0.33, in line with estimates. Revenue came in at $2.39 billion, above estimates of $2.34 billion, with revenue growth of 14.7%.

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Results Showed Strong Sales Growth

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Net sales increased 14.7% to $2.39 billion from $2.08 billion in the prior-year quarter.
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Daily sales increased 14.7%, supported by share gains with larger customers, product pricing, and stronger demand across major end markets.
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Net income increased 15.9% to $382.8 million from $330.3 million a year earlier.
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Diluted EPS rose to $0.33 from $0.29 in the prior-year quarter.
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Operating income increased 15.1% to $501.8 million.

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Margins Held Despite Gross Margin Pressure

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Gross margin declined to 44.6% from 45.3% a year earlier.
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The decline was driven mainly by unfavorable price and cost trends, customer mix, transportation costs, and rebate activity.
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Operating margin held steady at 21.0%, as selling, general, and administrative expense leverage offset the gross margin pressure.
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SG&A expenses fell to 23.5% of sales from 24.4% a year earlier, helped by labor productivity and fixed-cost leverage.

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Larger Customers and Digital Tools Drove Momentum

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Contract customer sales increased 17.6%, while non-contract customer sales increased 7.3%.
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Fastenal said larger customers continued to outperform as the company benefited from customer signings achieved since the first quarter of 2024.
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Total manufacturing daily sales increased 14.9%, while non-residential construction increased 17.0%.
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Digital Footprint sales increased 16.2% in the quarter and represented 61.6% of sales.
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FMI sales, which include FASTStock, FASTBin, and FASTVend, increased 16.4% and represented 44.6% of sales.

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Cash Flow and Capital Returns

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Operating cash flow was $265.7 million in the second quarter, representing 69.4% of net income.
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Fastenal returned $305.1 million to shareholders through dividends and share repurchases, equal to 79.7% of net income.
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That included $275.4 million in dividends and $29.7 million in share repurchases.
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Total debt was $120.0 million at the end of the quarter, down from $230.0 million a year earlier.

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Market Focus

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Investors are likely watching daily sales growth, contract customer momentum, gross margin pressure, SG&A leverage, digital sales, manufacturing demand, non-residential construction trends, cash conversion, dividends, and share repurchases.
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The quarter showed strong revenue growth and operating discipline, even though gross margin remained under pressure.

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The Bigger Picture

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Fastenal delivered another solid quarter as larger customer wins and digital supply chain tools helped drive double-digit sales growth.
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Revenue beat expectations, EPS matched estimates, operating margin held steady, and the company returned about 80% of net income to shareholders. The main watch item is gross margin, which declined due to price-cost pressure and customer mix.
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The key question is whether Fastenal can keep gaining share with large customers while protecting profitability as demand and pricing conditions evolve.
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