Fastenal’s Profit, Sales Grow by Double Digits Again

Fastenal’s Profit, Sales Grow by Double Digits Again

Driven by a 10.4 percent revenue boost and a growing industrial vending machine business, Fastenal’s earnings grew nearly 13 percent during the third quarter.

Fastenal Company on Thursday reported another quarter of double-digit sales and earnings growth, as the Winona-based industrial supplier continues to add new stores and expand its industrial vending machine business.

For the quarter that ended September 30, earnings grew nearly 13 percent to $109.3 million, or 37 cents per share—matching the expectations of analysts polled by Thomson Reuters.

Revenue, meanwhile, totaled $802.6 million, up 10.4 percent from the same period in 2011 and just shy of the $804.8 million that analysts had expected.

Fastenal has expanded its store footprint in 2012, although it has slowed its rate of expansion during recent years. During the first nine months of 2012, the company opened 73 new stores, bringing its total count to 2,650. It plans to open about 12 more stores this year.

One of the fastest-growing components of Fastenal’s business is industrial vending machines. During the first nine months of this year, the company installed 9,560 of its FAST Solutions machines, bringing the total to more than 17,000. Fastenal said that it is “investing aggressively” in the machines and that “industrial vending is the next logical chapter in the Fastenal story.” (To learn more about the machines, which are filled with everything from safety glasses to power tools, read this June Twin Cities Business story.)

Despite its double-digit sales and revenue growth, Fastenal’s pace of growth has slowed compared to 2010 and 2011. Most notable is a slowdown in its industrial production segment, which focuses on fasteners and supplies parts that become part of its customers’ finished products.

News of Fastenal’s quarterly earnings sent shares of the company’s stock up 9 percent to $46.10 mid-Thursday morning. A Wednesday report by The Wall Street Journal pointed out that “Fastenal’s business may not be exciting, but its growth puts almost any glamour stock, even Apple, Inc., to shame.”

In fact, Fastenal’s stock price has risen roughly 35,000 percent during the past quarter century—five times as much as Apple, The Wall Street Journal reported.

Fastenal currently has 15,431 employees, up about 1.7 percent from the end of 2011. It is among Minnesota’s 25 largest public companies based on revenue, which totaled $2.8 billion in 2011.