Fastenal Co. picked up steam in the first quarter, as sales at the distributor of metal fasteners and other industrial products grew 6.2%, a marked improvement from growth rates of under 3% for the prior quarter and full-year 2016.
“We are pleased with the improving pace of business growth in the first quarter, president and CEO Dan Florness said today. “This is a welcome sign of improving customer business activity and of the traction we are gaining in our growth drivers.”
One of its strongest growth drivers in the quarter, he added, was Fastenal’s expanding base of internet-connected vending machines that a growing number of its customers access at their own locations. Although Fastenal didn’t break out revenue figures for its vending machines, the rate of sales growth tied to the machines outpaced total sales growth by a good margin—as they have in recent quarters. “Net sales through our vending machines continued to grow at a double-digit pace in the first quarter,” Florness said.
Fastenal signed contracts with customers for 5,437 vending machines in the quarter, resulting in an installed base of 64,430 machines as of March 31, up 13.3% from a year earlier, Fastenal says. Although it didn’t release in its statement today a figure on vending machine sales as a percentage of total sales, it noted in the fourth quarter report that customers that buy through its vending machines had accounted for 46% of total sales.
Fastenal’s internet-connected vending machines, which it and other industrial supplies distributors place at customers’ industrial plant locations, provide customers with ready access to such products as rivets, nuts and bolts used in manufacturing products or in repairing equipment. They can also be stocked with non-fastener items like safety goggles and work gloves, items that workers may frequently need to replace on the spot in order to keep working. Employees typically enter codes into the vending machines to access and retrieve products; machine sensors connected to the internet record when items are removed to update inventory and financial records, and set in motion replenishment orders. Fastenal also sells online at Fastenal.com.
Fastenal also signed in the quarter 43 new national accounts, which it defines as customers with a multi-state contract. It said national accounts represented 48.4% of total revenue in Q1, or $507.1 million out of more than $1 billion, as sales from these customers grew 9.2% from the year-earlier quarter.
For the first quarter ended March 31, Fastenal reported:
- Net sales of $1.048 billion, up 6.2% from $986.7 million a year earlier;
- Gross profit of $518.0 million, up 5.4% from $491.5 million;
- Net earnings of $134.2 million, up 6.3% from $126.2 million.
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