Winona-based Fastenal Co. reported a 3.7% increase in sales and earnings per share for their first quarter ended March 31.
Strong sales of safety and janitorial products demonstrated the continued focus on COVID-19 precautions at industrial, manufacturing and construction sites, but increases in fastener sales also showed continued improvement in the factory economy.
For the quarter ended March 31, the company earned $210.6 million, or 37 cents per share, compared with $202.6 million, or 35 cents per share, in the first quarter of 2020.
Fastenal's overall sales for the quarter were $1.42 billion, up 3.7%.
Results had the benefit of an easy comparison to the first quarter of 2020 when the first effects of the COVID-19 pandemic started to slow business activity but increased the demand for personal protective equipment. That trend began to reshape the types and amounts of products that Fastenal distributes.
Sales of fastener products grew 4% in the first quarter. However, they accounted for 32.5% of net sales, down from 32.9% of net sales in the same period a year ago.
By comparison, safety products, including personal protection equipment, were 21.1% of total sales, up from 19.8% in the same quarter last year. They rose 15% in the quarter.
Last spring, Fastenal locked up a supply of three-ply masks because as CEO Dan Florness told analysts, it had the operational ability, financial ability and sense of prioritization to make that bet. Fastenal now says it wrote down $7.8 million worth of three-ply masks in the first quarter because supply has pushed the market price below what Fastenal paid.
Florness said the decision was the right thing to do given the pandemic and the company will sell through its supply.
Fastenal has continued to focus on switching sales to customers' facilities. However, the pace was down. The company signed 68 new onsite contracts, down from 85 in the first quarter last year.
However, the 68 new onsite signings did represent the highest rate of signings since the onset of the pandemic. This is partly because factories continue to limit nonemployees, including salespeople, from facilities.
Fastenal's overall sales and earnings largely met analyst expectations, and shares of the company closed Tuesday at $49.98, down 73 cents. Shares of Fastenal have traded between $32.82 and $51.89 over the past 52 weeks.
Surveys also have shown an increased pace in manufacturing. The Institute for Supply Management's growth index for U.S. factories was 64.7, up from 60.8 in February and the highest rate of growth since the end of 1983.
Any index measure over 50 indicates growth.
Patrick Kennedy • 612-673-7926