Minnesota-headquartered Fastenal saw double digit sales and pre-tax earnings growth for the year ended 31 Dec 2017.
The wholesale distributor of industrial and construction supplies saw net sales increase 14.8% in the quarter (up $140.5 million) thanks to high unit sales via Fastenal’s industrial vending and Onsite locations. Fastener products represented 35% of sales in Q4 2017 and daily fastener product sales grew 13.4%. Gross profit fell to 48.8% (in Q4 2017) from 49.8% in Q4 2016, due to “unusually strong” profit in Q4 2016.
For the year, net sales grew 10.8% to $4.39 billion, with gross profit up 10.1% to $2.2 billion.
“A return to double-digit sales and pre-tax earnings growth in 2017 was a great way to celebrate our 50th year in business,” said Dan Florness, President and CEO.
“Our customers’ demand improved, this demand lifted our business. Also encouraging was how the hard work of Fastenal employees generated accelerating signings and sales growth in our growth drivers. This momentum, our ability to leverage operating expenses, and the benefits of tax reform have set up 2018 to be another strong year for Fastenal.”
In Q4, Fastenal signed 4,266 industrial vending machines (up 13.5% on Q4 2016). Installed device count at the end of the year was 71,421 – up 13.7% over 2016.
57 new Onsite locations were signed in Q4 2017 (43 signings in Q4 2016), with 605 active sites on December 31, 2017 (51% up on 2016).
32 new national account contracts were signed in Q4 2017.
Fastenal’s statement said: “Beyond signings (or growth activities), our large customers can provide insights into the trends of our overall marketplace. As recently as the fourth quarter of 2016, weak industrial demand was depressing growth for this group with sales to only 51 of our top 100 customers growing compared to 49 contracting. This dynamic started to improve in the first quarter of 2017, and has continued to improve, including in the fourth quarter of 2017, with sales to 72 of our top 100 customers growing (54 growing 10% or more), and sales to 28 of our top 100 customers declining (14 declining 10% or more).”