Factory and construction supply firm Fastenal Co. met earnings expectations for its first quarter Wednesday, thanks to strong performance at older retail stores and the continued push to install more industrial vending machines inside customer facilities.
Winona, Minn.-based Fastenal installed 4,352 new vending machines during the first quarter, bringing the total to 25,447 machines nationwide.
Company officials have found the vending machines to be profitable and great sales tools, not only because they make purchasing easier, but because Fastenal sales representatives are frequently in customer plants and discovering new inventory needs.
"Our industrial vending machine operation is a rapidly expanding component of our business," said CEO Willard Oberton in a statement Wednesday. "We believe industrial vending is the next logical chapter in the Fastenal story. We also believe it has the potential to be transformative to industrial distribution and that we have a 'first mover' advantage."
Besides machine installations, Fastenal also opened 11 new stores during the quarter, for a total of 2,660 stores.
But officials credited the quarter's sales growth to the vending machines and to strong product sales at older Fastenal stores. First-quarter earnings met expectations, growing 8.8 percent to $109 million or 37 cents a share. Sales grew 4.9 percent to reach $806.3 million. Analysts had expected sales of $815 million.
Officials said sales would have been higher except for uncertainty in the tepid economy, negative currency exchange rates and the loss of one business day during the quarter. However, officials also noted that sales slowed from January to February and "slowed further" in March.
Such details appeared to have spooked investors. Fastenal's stock fell $1.58 to $49.30 a share in early trading Wednesday.
