1/24/2011 1:19:00 AM
NEWS BRIEFS
Higher Small Store Margins Drive Fastenal Earnings
Higher margins at Fastenal’s smaller stores are driving company earnings going forward, UBS reports.
“We are increasing our margin forecasts to reflect good operating performance, in particular at smaller stores,” UBS stated.
In recent periods stores with $60-$100K in monthly revenue have seen EBIT margins tracking near 23%, a level once considered out of reach for a store below $125K in monthly sales, according to UBS.
“We think strong cost execution and same store sales initiatives have, and will continue to drive margins up.”
Fastenal revenue grew 17.6% in 2010 despite modest store growth of 5.4%, “evidencing robust same store sales initiatives.”
Overall sales reached $2.27 billion, while net earnings jumped 44% to $265.4 million. The Winona, MN-based supplier opened 127 new stores during the year, and boosted its workforce by10.3% to 13,285 employees.
UBS reiterated its “Neutral” rating on Fastenal while raising their price target from $60 to $63. ©2011 GlobalFastenerNews.com
Related Stories:
• Fastenal Settles Fed Dispute for $6.25m
• Fastenal Names Two New Executive Directors
• Fastenal Sales & Earnings Jump in 2010
• Carpenter Technology Forecasts Rising Fastener Demand
Related Links:
Share: