Industrial distributor, Fastenal's first quarter earnings report shows stable profit margins and a drop in inflation, which could be a positive indicator for the industrial economy in the U.S.
- Fastenal reported Q1 earnings per share of 52 cents, beating Wall Street expectations by one cent.
- The report shows stable profit margins and a drop in inflation, which could indicate a positive trend for the industrial economy.
- The Institute for Supply Management Purchasing Manager Index has been below 50 for five consecutive months, indicating a shrinking sector.
- Despite this, Fastenal and the Institute for Supply Management PMI are good real-time reads on the industrial economy, and Fastenal's report shows that things are looking slightly better than expected.
- Pricing was up 3% YoY, and profit margins increased to 21.%, up from 19.6% in Q4 2022.
- Sales at 82 of Fastenal's top 100 customer accounts grew in the quarter.
- Nonresidential construction markets saw a negative impact, with Fastenal's average daily sales falling 2.4% YoY.
- Fastenal management will hold a conference call to discuss the results and the state of the U.S. industrial economy.
- Fastenal's stock is up 11% YTD, trading at about 27 times estimated 2023 earnings, which is slightly lower than the past few years.