Yahoo Finance Fastenal's (FAST) May ADS Rises 1.5%, Improves Sequentially
Fastenal Company FAST recently released its May sales report, wherein average daily sales or ADS grew 1.5% year over year to $29.9 million, showing better growth sequentially but moderating annually. In the prior month, daily sales registered 0.7% growth, and in the year-ago period, the same registered a 5.2% increase.
The trend is worse than the historical May daily sales growth average of up 1.6% between 2018 and 2023 (excluding 2020). Net sales in May 2024 were $658.7 million, reflecting an increase of 1.5% year over year.
End-Market Perspective, Product Lines & Customers
From an end-market perspective, heavy manufacturing sales improved 1.5% for the month, and other manufacturing inched up 2.9% from a year ago. Total manufacturing (which accounted for 75.3% of May 2024 sales) registered 4.4% growth in May 2024. Non-residential construction dropped 6.2% compared with a 9.5% decrease reported in May 2023. The ADS growth rate in manufacturing and non-residential markets declined in May compared to the prior month.
Fastenal derives sales from Fasteners, Safety and other product lines. Fasteners witnessed a 4.1% decline in sales last month compared with a 0.6% decrease in the year-ago period. Safety products grew 7.5% in May 2024 compared with a rise of 6.8% a year ago. In May 2024, Other categories improved 3% compared with a 9% increase a year ago. On a sequential basis, Safety and Other categories sales improved while that of Fasteners products moderated.
Geographically, sales in the United States grew 1.6% (compared with 4% a year ago), while Canada/Mexico grew 0.3% (compared with 14% a year ago). Rest of World sales grew 4.8% against a 1.7% decline registered in the year-ago period.
In terms of customer/channel, National account daily sales growth advanced 6% in May from a year ago, given the fact that 58% of the top 100 accounts and 48.8% of public branches are expanding. Yet, non-national accounts showed a 5% decline year over year for the month. In the year-ago period, daily sales growth remained unchanged in non-national accounts year over year.
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Shares of the company have lost 1.4% year to date, better than the industry‘s 4.7% decline. With many shorter-cycle indicators remaining sluggish, it seems the anticipated recovery in the industrial sector for the second half of 2024 is being delayed. Despite tough year-ago comparisons, Fastenal’s decent large customers, its leverage in its digital strategy, onsite/offsite mix and market share gains across its product categories are expected to drive growth.
Zacks Rank and Key Picks
Fastenal currently carries a Zacks Rank #4 (Sell).
Here, we have highlighted three better-ranked stocks, namely Vital Farms VITL, Sprouts Farmers Market SFM and Tractor Supply Company TSCO.
Vital Farms offers a range of produced pasture-raised foods. It currently sports a Zacks Rank #1 (Strong Buy). VITL has a trailing four-quarter average earnings surprise of 102.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 22.5% and 59.3%, respectively, from the year-ago reported numbers.
Sprouts Farmers, engaged in the retailing of fresh, natural and organic food products, currently sports a Zacks Rank #1. SFM has a trailing four-quarter earnings surprise of 9.2%, on average.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings suggests growth of around 8% and 9.5%, respectively, from the year-ago reported numbers.
Tractor Supply Company, which operates as a rural lifestyle retailer, currently carries a Zacks Rank #2 (Buy). TSCO has a trailing four-quarter earnings surprise of 2.7%, on average.
The Zacks Consensus Estimate for Tractor Supply Company’s current financial-year sales and earnings suggests growth of around 3% and 2.5%, respectively, from the year-ago reported numbers.
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Fastenal Company (FAST) : Free Stock Analysis Report
Tractor Supply Company (TSCO) : Free Stock Analysis Report
Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report
Vital Farms, Inc. (VITL) : Free Stock Analysis Report
