Hardware

Fastenal Q2 2021 sales slip, earnings rise

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July 13, 2021

Fastenal's net sales decreased 0.1% from $1.509 billion in Q2 2020 to $1.507 billion in the second quarter ending June 30, 2021, according to a press release.

Net earnings for the comparative quarters rose 0.4% from $238.9 million to $239.7 million, while diluted earnings per share were flat at 42 cents.

The company declared a 28 cents quarterly dividend.

The second quarter of 2021 was heavily influenced by two trends. First, the company sold "significant" quantities of personal protective equipment and sanitation products as a result of actions taken by governments and businesses around the world to address the onset of the COVID-19 pandemic.

In the second quarter of 2021, the ability of governments and businesses to manage the pandemic improved, as reflected in lower infection and higher vaccination rates. As a result, the "surge"-type volumes Fastenal experienced in the second quarter of 2020 did not recur in the second quarter of 2021.

Second, demand from traditional manufacturing and construction customers in the second quarter of 2021 was significantly stronger than in the year earlier period, when measures to address the pandemic resulted in a sharp and broad drop in economic activity. The net effect on sales of these two trends — reduced sales of surge-related product, but improved manufacturing and construction demand — were mostly offsetting.

The overall impact of product pricing on net sales in the second quarter of 2021 was 80 to 110 basis points. Pricing actions taken in the first and second quarters of 2021 contributed to the increase in the impact of net pricing on sales in the second quarter of 2021.

The absence of pandemic-related impacts produced significant shifts in the product mix of business in the second quarter of 2021. Fastener daily sales grew 28.4% over the second quarter of 2020, and represented 33.6% of net sales in the second quarter of 2021; fasteners represented 26.0% and 34.5% of net sales in the second quarter of 2020 and the second quarter of 2019, respectively.

Safety product daily sales declined 38.6% from the second quarter of 2020 and represented 21.0% of net sales in the second quarter of 2021; safety products represented 34.0% and 17.5% of net sales in the second quarter of 2020 and the second quarter of 2019, respectively.

The decline from the second quarter of 2020 reflected the absence of surge-related PPE sales, only partly offset by improvements in manufacturing and construction demand.

Most of national accounts customers grew in the second quarter of 2021 over the year earlier period, as reflected by growth at 71 of the top 100 national account customers. However, this was mostly offset by the absence in the second quarter of 2021 of large surge-type sales made to a small number of large national account customers in the year earlier period.

The approximately $1.51 billion in quarterly revenue was in line with analyst expectations, while the GAAP EPS of 42 cents beat expectations by one cent, according to Seeking Alpha.

Shares traded $54.22 today against a 52-week range of $41.18-$S54.76.

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