Fastenal reported its second-quarter sales and earnings were on par with results from the second quarter last year, but the sales mix has shifted back to more traditional levels.
The surge in personal protective equipment (PPE) last year mostly dissipated,but activity from its traditional customers was up as businesses and governments have gotten a better handle on the pandemic.
The two trends offset each other as Fastenal reported revenue of $1.5 billion, down 0.1% from the second quarter last year. Net earnings were $239.7 million, or 42 cents per share, the same as the second quarter last year.
In the second quarter of 2020, the company had a surge in sales of PPE and sanitation products as Fastenal used its sourcing and distribution capabilities to deliver crucial safety equipment to new and existing clients.
Governments and businesses have gained a better understanding of how to deal with the pandemic and as a result those surge volumes in PPE and sanitation products dissipated in the second quarter this year.
That surge was offset by continued improvement in activity from its traditional manufacturing and construction customers who in the year-ago quarter were severely constrained by mandated shutdowns and the need to adjust manufacturing lines and schedules to protect workers.
As evidence of improved manufacturing output the company said fastener daily sales grew 28.4% in the most recent quarter, and represented 33.6% of net sales for the period.
Fastener sales were closer to historic levels. Fasteners represented 26% of net sales in the second quarter of 2020 and 34.5% of net sales in the pre-pandemic second quarter of 2019.
Meanwhile daily sales of safety products declined 38.6% from the second quarter of 2020. Safety products represented 21% of net sales in the second quarter of 2021, down from 34% in the second quarter of 2020. Safety products represented 17.5% of net sales in second quarter of 2019.
Fastenal is considered a bellwether stock since it sells to factories of all sizes.
A key to Fastenal’s growth is signing of new Onsite locations and Fastenal Managed Inventory devices which including vending machines and other automated bin and stocking options. The company said Onsite and FMI signings in the quarter were the best since the pandemic started and getting closer to expectations for annual signing levels.
Results for Fastenal largely met analyst expectations and shares of the company were trading at $53.16 per share, down about 2%.