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Mar 31, 2022
Fastenal Q1 2022 Earnings Report
Fastenal's financial performance improved significantly in Q1 2022, driven by strong sales growth and improved profitability.
Key Takeaways
Fastenal Company reported a strong first quarter in 2022, with net sales increasing by 20.3% and diluted net earnings per share rising by 27.8%. The company benefited from improved unit sales, strategic pricing actions, and growth in its Onsite and FMI Technology offerings.
Net sales increased by 20.3% compared to the first quarter of 2021, driven by improved unit sales and pricing actions.
Diluted net earnings per share increased by 27.8% to $0.47, up from $0.37 in the prior year period.
The company signed a record 106 new Onsite locations, reflecting a normalization of the business environment and improved access to customer facilities.
FMI Technology sales grew by 48.4%, driven by increased adoption of FASTStock, FASTBin, and FASTVend solutions.
Fastenal
Fastenal
Forward Guidance
Fastenal expects to continue investing in its growth drivers, including Onsite locations and FMI Technology, and anticipates capital expenditures to be in the range of $180.0 to $200.0 million for 2022.
Positive Outlook
- The market will support a long-term rate of 375 to 400 annual Onsite signings.
- Company's goal for weighted FASTBin and FASTVend device signings remains at 23,000 to 25,000 MEUs.
- Investment in property and equipment is expected to be within a range of $180.0 to $200.0 million.
- Increase in spending on FMI equipment in anticipation of higher signings.
- Increase in spending on hub properties to reflect upgrades to and investments in automation as well as facilities upgrades.
Challenges Ahead
- Forward-looking statements involve a variety of risks and uncertainties, known and unknown (including risks related to inflation, supply chain constraints, labor shortages, and the COVID-19 pandemic), and may be affected by inaccurate assumptions.
- No forward-looking statement can be guaranteed and actual results may vary materially.
- The company's signings in the first quarter of 2022 were below the pace necessary to achieve annual goals.
- The company experienced higher transportation expenses related primarily to higher overseas shipping costs, third-party freight charges, and the cost of fuel in our internal fleet.
- The impact of inflation on the value of stocked parts continues to represent the most significant element behind the increase in our inventory in the period.