Fastenal (FAST) Q1 2026 earnings summary

Executive summary

• Daily sales grew 12.4% year-over-year in Q1 2026, marking the third consecutive quarter of double-digit growth, with net sales reaching $2,201.7 million and net income up 13.8% to $339.8 million; diluted EPS rose 13.6% to $0.30.

• Growth was driven by new key account wins, expanded customer site presence, digital initiatives, and strong manufacturing demand.

• Operating margin improved to 20.3%, up 20 basis points year-over-year, reflecting operating leverage and cost discipline.

• International sales, especially in Europe and Asia, grew nearly 24% in March, while digital channels represented 61.5% of sales.

• $296 million was returned to shareholders via dividends and share repurchases, totaling 87% of net income.

Financial highlights

• Daily sales reached $34.9 million, up 12.4% year-over-year, with net sales at $2.2 billion.

• SG&A expenses as a percentage of sales improved to 24.3% from 25.0%, reflecting productivity gains and cost discipline.

• Operating cash flow was $378.4 million, representing 111% of net income, up 44.3% year-over-year.

• Gross margin declined to 44.6% from 45.1% due to unfavorable price/cost and customer mix.

• Accounts receivable grew 13.0% and inventories rose 1.1% year-over-year, supporting sales growth.

Outlook and guidance

• Management remains cautiously optimistic about continued growth, citing broad-based market expansion and strong customer acquisition.

• Q2 expected to remain challenging due to ongoing price-cost headwinds, but improvement anticipated in the second half of the year.

• 2026 capital expenditures expected between $310 million and $330 million, up from $230.6 million in 2025, focused on facilities, trucking, and IT investments.

• Weighted FASTBin and FASTVend device signings target remains 28,000–30,000 MEUs for 2026.

• Ongoing tax rate projected at approximately 24.6%, absent discrete items or tax law changes.