Fastenal Company (FAST)

Fastenal reported third-quarter 2026 net sales of $2,463.3 million on 14 October, up 15.5 percent from a year earlier 1. Net income was $401.6 million, up 19.7 percent 1.

Operating income was 21.5 percent of net sales, up from 20.7 percent, because selling and administrative costs fell as a share of sales 1. Gross margin slipped to 44.8 percent from 45.3 percent 1. The company says a shift toward larger customers, who carry lower gross margins, cut it by about 50 basis points 1.

Sales to contract customers, the large accounts signed to agreements, grew 18.8 percent per business day and were 76.5 percent of sales 1. Non-contract sales grew 7.8 percent 1.

The company lowered its 2026 goal for new vending and bin devices signed to between 27,000 and 29,000, from between 28,000 and 30,000 1. Its quarterly report says no legal matter is probable or reasonably possible to have a material adverse impact 2.

Fastenal began as a partnership in 1967 and was incorporated in Minnesota in 1968, opening its first branch in Winona, Minnesota 3. It started by supplying threaded fasteners through a branch network in small, medium and later large cities 3.

In 1993 the company began to add other product lines aggressively, and these non-fastener lines were 69.5 percent of 2025 sales 3. Safety supplies became the largest of them, at 22.2 percent of 2025 sales 3. The company credits cross-selling and industrial vending 3.

In 2023 it folded its private labels, brands sold only through Fastenal, into two: Body Guard for North American safety supplies and Ormadus for the rest 3.

In 2025 net sales rose 8.7 percent to $8,200.5 million, after growth of 2.7 percent in 2024 3. The company called its key markets sluggish that year and named share gains as the main driver, with tariff-related pricing adding 170 to 200 basis points 3.

That growth came with larger customers 3. At the end of 2025 the company counted 2,657 customer sites buying $50k or more a month, up 14.0 percent from 2,330 a year earlier 3. Sites buying under $5k a month fell 11.2 percent to 73,357 3.

Starting in 2025 the company reports customer sites instead of public branches and customer-dedicated Onsites, a change it ties to tailoring service to each site's size 3. It also split its stock two for one, effective at the close of business on 21 May 2025 3.

Daniel Florness was chief financial officer from 2002 to 2015, then president and chief executive from January 2016 3. On 19 December 2025 he announced he would step out of the chief executive role effective 16 July 2026 3.

Fasteners and other product lines

Fasteners, bolts, nuts, screws and related items sold mainly under the Fastenal name were 30.5 percent of 2025 sales 3. Safety supplies were 22.2 percent 3. Private label brands were about 11 percent of sales 3.

The quarterly release names four categories: fasteners, safety supplies, cutting tools and other lines, which hold seven smaller segments including tools and janitorial supplies 1. Direct materials, which go into customers' finished goods, were 39.8 percent of third-quarter sales, and indirect materials, which keep facilities running, were 60.2 percent 1.

Vending, bins and customer sites

Fastenal Managed Inventory covers scanned stocking locations (FASTStock), bins (FASTBin) and vending devices (FASTVend) placed at the customer 1. Sales through these devices were $1,121.3 million in the third quarter, with 143,878 weighted devices installed at quarter end 1.

In the third quarter 3,288 customer sites buying $50k or more a month produced $1,456.6 million of sales, against 90,759 sites in all 1. The company calls these sites a representation of Onsite-like customers 1.

Plants and people

At the end of 2025 Fastenal had 1,595 branch locations in 25 countries 3. Its home office and a distribution center are in Winona, Minnesota, and Indianapolis, Indiana holds a distribution center of about 1,078,000 square feet 3.

It also makes products in plants in Winona, Indianapolis, Houston, Wallingford in Connecticut and Rockford in Illinois 3. It owns 147 of the buildings that house its branches 3.

At the end of the third quarter it had 24,679 employees, 17,117 of them in selling roles 1. Jeffery Watts, president and chief sales officer since August 2024, was appointed chief executive effective 16 July 2026, succeeding Daniel Florness 35.

Max Tunnicliff, who joined in 2025 at age 48, is chief financial officer 3.

Rivals and current problems

The 10-K names large national distributors and smaller regional or local ones as rivals, plus web-based competitors that eBusiness has brought in 3. It names no individual rival 3.

During 2026 the Supreme Court invalidated tariffs imposed under an emergency powers law, and the company says it is not the importer of record for most products 2. Its direct exposure to refunds is limited 2. Receivables rose 19.9 percent in a year, which the company ties to larger customers with longer payment terms 1.

The umbrella, in words

The main brands are Fastenal, Body Guard for safety supplies and Ormadus for the remaining products 3. Exhibit 21 lists subsidiaries including Fastenal International Holdings Company, incorporated in Minnesota in 1994, and Fastenal IP Company, incorporated there in 2005 4.

Others are Fastenal Canada, Ltd. (2008) and Fastenal Mexico (1999), plus Innova Supply Chain Solutions, LLC (2020) 4. The exhibit also lists units across Asia, Europe, and Central and South America 4.

The 10-K reports about 900 record holders of the common stock, holding for an estimated 1,029,000 beneficial owners 3. It states no controlling holder or special share class 3.

The company expects 2026 spending on property and equipment, net of sales proceeds, to be between $310.0 million and $330.0 million, up from $230.6 million in 2025 1. It gives three reasons: replacing its Atlanta hub facility, delayed IT projects and more trucking 1.

Its 2026 goal is 27,000 to 29,000 weighted bin and vending device signings, cut from 28,000 to 30,000 1. The 10-K said the company expected 66 percent of 2026 sales to run through its Digital Footprint, and the third-quarter figure was 61.4 percent 31.

The company believes its ongoing tax rate, absent discrete items, is about 24.6 percent 1.

The board declared a quarterly dividend of $0.26 per share on 13 October 2026, payable 25 November to holders of record on 28 October 2. About 10,675,000 shares remain under the repurchase authority of 12 July 2022 2.

The company says it posts monthly net sales on the fourth business day of the following month, and on the earnings date for a quarter's last month 1.