Fastenal Company FAST recently released its August sales report, wherein average daily sales grew 16.1% to $28 million, moderating sequentially. In July 2022, daily sales registered 18.1% growth, whereas the same had witnessed 9% growth in August 2021.
Daily sales, on a constant currency basis, were up 16.6% last month compared with 18.7% in July 2022. Daily sales on a seasonal basis were up 1.3% compared with the company’s benchmark (historical five-year average) of 3.1% growth, which is 180 basis points (bps) below the company’s historical seasonal benchmark.
Although issues like price inflation, supply-chain challenges and shortage of labor are negatively impacting its growth rate, industrial markets such as capital goods and commodities continue to gain.
Shares of Fastenal gained 1.6% during the trading session on Sep 7, 2022.
End-Market Perspective, Product Lines & Customers
From an end-market perspective, manufacturing sales improved 23.5% for the month, reflecting a rise from 19.7% growth a year ago. Non-residential construction grew 5.8% versus a 10.1% increase reported in August 2021. The average daily sales growth rate in non-residential decelerated sequentially in August, while that of manufacturing end markets improved.
Fastenal derives sales from Fasteners, Safety and other product lines. Fasteners witnessed 19.8% growth in sales last month versus 18.9% registered in the year-ago period. The monthly sales data reflects that Fasteners sales trend has remained stable. The figure was up 19.8% in July. Safety products grew 11.7% in August against a 3.8% decline in August 2021. In July 2022, safety categories improved 13.6%.
Geographically, sales in the United States grew 16.5% (versus 7.2% a year ago), while Canada/Mexico grew 17.5% (versus 18.7%). Rest of World sales growth declined sequentially from up 9% to up 1.5%.
In terms of customer/channel, National account daily sales growth advanced 20% in August from a year ago, given the fact that 81% of the top 100 accounts and 70.4% of public branches are expanding. Yet, non-national accounts were up 10% year over year for the month. In the year-ago period, daily sales growth in non-national accounts was down 1% year over year.
Shares of the company have outperformed the industry so far this year. Although daily sales have moderated sequentially because of a potentially slower macro environment, we believe this Zacks Rank #3 (Hold) company is well-positioned to navigate through these challenges given the end-market demand, cost-control efforts, and aggressive investment to increase on-site locations, vending machines and e-commerce business. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3 Better-Ranked Retail-Wholesale Stocks Hogging the Limelight
Some better-ranked stocks which warrant a look in the Zacks Retail-Wholesale sector are Tecnoglass Inc. TGLS, Cracker Barrel Old Country Store, Inc. CBRL and Arcos Dorados Holdings Inc. ARCO.
Tecnoglass currently carries a Zacks Rank #1. Shares of the company have lost 13.7% year to date.
The Zacks Consensus Estimate for TGLS’ 2022 sales and EPS suggests growth of 28.2% and 47.7%, respectively, from the year-ago period’s levels.
Cracker Barrel presently carries a Zacks Rank #2 (Buy). Cracker Barrel has a long-term earnings growth of 6.9%. Shares of the company have decreased 16.5% year to date.
The Zacks Consensus Estimate for Cracker Barrel’s 2022 sales and EPS suggests growth of 16.3% and 15.4%, respectively, from the year-ago period’s levels.
Arcos Dorados currently carries a Zacks Rank #2. Arcos Dorados has a long-term earnings growth of 34.4%. Shares of the company have risen 26.5% year to date.
The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 27.1% and 104.2%, respectively, from the year-ago period’s levels.
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Cracker Barrel Old Country Store, Inc. (CBRL) : Free Stock Analysis Report
Fastenal Company (FAST) : Free Stock Analysis Report
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