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Fastenal's stock drops after profit and revenue miss, raised prices fail to offset inflation

Tomi Kilgore

Shares of Fastenal Co. dropped 4.6% toward a 6-month low, after the industrial and construction supplies distributor reported second-quarter earnings and revenue that missed expectations. Net earnings fell to $204.6 million, or 36 cents a share, from $211.2 million, or 37 cents a share, in the year-ago period, below analyst consensus expectations of 37 cents a share, according to FactSet. Sales rose 7.9% to $1.37 billion, just shy of the FactSet consensus of $1.38 billion. The company said economic activity slowed during the quarter relative to the sequential first quarter. Gross profit as a percentage of sales fell 180 basis points to 46.9%. "While we successfully raised prices as one element of our strategy to offset tariffs placed to date on products sourced from China, those increases were not sufficient to also counter general inflation in the marketplace," the company said in statement. The stock, which is on track for the lowest close since Jan. 24, has slumped 13% over the past three months, while the SPDR Industrial Select Sector ETF has edged up 0.4% and the S&P 500 has gained 3.7%.