Fastenal Co. reported a nearly 3 percent jump in first-quarter earnings Friday as it installed more of its vending machines at customer sites and its older stores had a solid performance.
The results punctuated an overall busy quarter for the Winona, Minn.,-based retailer of nuts, bolts and industrial supplies. The company added 511 workers, opened nine stores, closed 13 and added 3,600 industrial vending machines inside customer factories.
With the addition of store staff and the success of its marquee vending machine business, Fastenal earned $111.9 million, or 38 cents a share, which was in line with the consensus of Wall Street analysts.
Sales for the quarter rose 8.7 percent to $876.5 million, which was above the $870 million forecast by analysts. Older stores performed well during the quarter, particularly in March.
Analysts and company executives also noted that Fastenal is trying to improve profits and sales through its vending machines, which carry manufacturing parts that customers can use on the factory floor. The cost benefit of that model is significant, the company said.
For the quarter, however, Fastenal said results were negatively affected by bad weather in January and February, by inflation and by negative foreign currency rates, mostly in Canada.
“The biggest impact was a severe winter in North America and its negative impact on our customers and our trucking network,” Fastenal CEO Willard Oberton told analysts in a conference call.
Edward Jones research analyst Logan Purk noted that the weather trended more normal in March, which prompted “everyone to come out of the woodwork to buy supplies in March.”
“That’s why we saw an 11.6 percent sales growth for that month,” he said. “This was more than I expected and was a little bit of a surprise. That was a fairly big step for them. But I am of the belief that one month does not make a trend. Still, that [March growth] is what Wall Street will probably focus on.”
Fastenal shares initially rose 2 percent on the news. But then the stock tumbled amid volatile trading in the broader market. The company’s stock closed Friday at $49.86, down 87 cents, or 1.7 percent.