Fastenal third-quarter profit rises to $401.6 million as sales climb 15.5%

Fastenal Company (FAST) said Wednesday that third-quarter net income rose 19.7% to $401.6 million, or $0.35 per diluted share, as net sales grew 15.5% to $2,463.3 million.

Fastenal said in a regulatory filing that the quarter had 64 business days, the same as a year earlier, so daily sales also rose 15.5%.

Here's how the company did:

• Net sales: $2,463.3 million vs. $2,133.3 million a year earlier
• Diluted earnings per share: $0.35 vs. $0.29 a year earlier
• Net income: $401.6 million vs. $335.5 million a year earlier
• Operating income: $530.8 million vs. $441.5 million a year earlier
• Gross profit: $1,104.7 million vs. $965.8 million a year earlier

Contract customers, which include national multi-site, local and regional, and government accounts, grew daily sales 18.8% from a year earlier. Non-contract customers grew 7.8%. Contract customers made up 76.5% of sales.

Here's how other Fastenal segments did during the quarter:

• FMI sales: $1,121.3 million, with daily sales up 14.6%
• FASTBin and FASTVend sales: $827.2 million, up 17.6%
• eBusiness sales: $721.5 million, up 14.8%
• FASTStock sales: $294.2 million, up 7.0%

Digital Footprint sales, a combination of FMI sales and eBusiness sales that are not FMI billings, were $1,536.5 million. Daily sales in that category rose 16.1%.

Manufacturing customers drove growth. Daily sales to manufacturers rose 17.2%, led by heavy manufacturing at 20.2%. Non-manufacturing daily sales rose 12.3%, and non-residential construction rose 12.0%, its sixth straight quarter of growth.

Product pricing added about 240 basis points to net sales, compared with a range of 240 to 270 basis points a year earlier. Foreign exchange rates reduced sales growth by about 10 basis points.

Sites with monthly sales potential of $50,000 or more rose to 3,288 from 2,771 a year earlier. Monthly sales per site in that group were $147,668, compared with $137,363.

Fastenal signed 7,484 weighted FASTBin and FASTVend devices in the quarter, up 6.2% from a year earlier. It lowered its 2026 goal for weighted signings to between 27,000 and 29,000 machine equivalent units, from between 28,000 and 30,000.

Gross margin fell about 40 basis points to 44.8% of net sales from 45.3%. The company said a shift in customer mix toward larger customers reduced gross margin by about 50 basis points. Those customers carry lower margins but generate higher absolute profit and add fixed-cost leverage.

Price and cost reduced gross margin by about 30 basis points. Direct sourcing savings, supplier rebates and tariff refunds helped, and about 20 basis points of the benefit reflected favorable timing.

Selling, general and administrative expenses fell to 23.3% of net sales from 24.6%, a 130 basis point improvement. Employee-related costs improved 90 basis points as base pay leveraged labor productivity, while bonuses and commissions grew faster than sales.

Operating margin rose to 21.5% from 20.7%.

Income tax expense was $129.6 million, or 24.4% of pretax income, compared with $105.1 million, or 23.9%. Fastenal said its ongoing tax rate, absent discrete items or changes to tax law, should be about 24.6%.

Operating cash flow was $421.6 million, up 9.0%, equal to 105.0% of net income, compared with 115.3% a year earlier. The company said the lower ratio came from a larger use of cash for receivables and inventory, reflecting strong sales growth. For the first nine months, operating cash flow rose 14.9% to $1,065.7 million.

Accounts receivable rose 19.9% to $1,615.2 million, which the company attributed to sales growth and larger customers with longer payment terms. Inventories rose 3.1% to $1,776.6 million despite double-digit sales growth, which it said reflects disciplined inventory management.

Fastenal returned $328.4 million to shareholders in the quarter, or 81.8% of net income, through dividends of $298.2 million and share repurchases of $30.2 million. A year earlier it returned $252.5 million, or 75.3% of net income, all in dividends.

Total debt was $100.0 million at the end of the quarter, down from $195.0 million a year earlier. Debt was 2.4% of total capital, compared with 4.8%.

Net investment in property and equipment was $71.8 million, or 2.9% of net sales, up from $54.7 million a year earlier. For 2026 the company continues to expect net investment of $310.0 million to $330.0 million, up from $230.6 million in 2025. It cited replacement of its Atlanta hub facility, delayed IT projects and higher trucking spend.

Total full-time equivalent headcount was 21,749 at the end of the quarter, up 0.8% from a year earlier and down 2.2% from the second quarter. Selling personnel on a full-time equivalent basis fell 0.5% from a year earlier to 15,332.