Fastenal (FAST) reported on Thursday first-quarter earnings that missed Wall Street expectations, though the company’s sales ramped up on new store openings.
The Winona, Minn.-based seller of industrial and construction supplies said it earned $100.2 million, or 34 cents a share, compared with a year-earlier $79.5 million, or 27 cents. The results were short of average analyst estimates of 35 cents in a Thomson Reuters poll.
Revenue for the three months ended March 31 was $768.8 million, up 20% from $640.5 million a year ago, meeting the Street’s view of $769. Those gains were led by a jump in new stores, partially offset by changes in foreign currencies.
Same-store sales, or those open longer than two years, were up 18.8%, 17.1% and 16.8%, from January through March, respectively.
Fastenal said demand for industrial production goods, which is used by customers to make finished goods, was strong while the maintenance portion of its manufacturing business, or products mostly used as upkeep, saw demand soften.
The manufacturer continues to open new stores as a driver that it hopes will bring in new customers. Last period, Fastenal opened 28 new stores, an increase of 1.1%.
“Historically, we expanded our reach by opening stores at a very fast pace,” Fastenal said in a statement. “We believe this growth is enhanced by our close proximity to our customers, which allows us to provide a range of services and product availability that our competitors can't easily match.”
In the company’s first 10 years of being public, from 1987 to 1997, it opened stores at an annual rate of 30%. Over the last five years it has opened stores at a rate of about 3% to 8%.
This year, Fastenal said it expects to open new stores at a rate of 4% to 6%.