4/12/2016 12:30:00 PM
NEWS BRIEFS
Fastener Price Deflation Hurts Fastenal Sales
Daily fastener sales
Fastenal Co. reported daily fastener sales declined 1.7% in the opening quarter of 2016.
“Our fastener product line has seen its daily growth decrease from about 10% growth in the last six months of 2014 to about 6% contraction in the fourth quarter of 2015 and about 2% contraction in the first quarter of 2016,” the company stated.
“Said another way, our market share gains continue to be strong, but the contraction in purchases from our existing customers, plus some price deflation, has eliminated our growth and created contraction, which lessened from the fourth quarter of 2015 to the first quarter of 2016.”
Overall Q1 sales increased 3.5% to $986.7 million, with daily sales gaining 1.9% to $15.4 million. Gross profit decreased from 49.9% in the fourth quarter of 2015 to 49.8% in the first quarter of 2016. Operating earnings fell 1.8% to $199.8 million during Q1, with net earnings declining 1.1% to $126.2 million.
Total store employee headcount declined 2.2% from the previous quarter to 13,658 while overall employee headcount dipped 1.1% from the previous quarter to 20,509.
Fastenal’s number of industrial vending machines (installed device count) increased 17.2% to 56,889.
“Our total daily sales to customers with industrial vending grew 3.6% over the first quarter of 2015. However, daily sales of non-fastener products to customers with vending grew 7.4%, while daily sales of fasteners to customers with vending contracted 5.5%.”
During Q1 opened 17 stores, compared to two during the first quarter of 2015, and closed or consolidated 12 stores.
“We plan to expand our pace of store openings in 2016 with a goal of opening 40 to 60 new stores (an increase of approximately 2% over our number of stores as of December 31, 2015),” the company stated. Web: fastenal.com
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