Fastenal Co.’s fourth-quarter profit jumped 2.6 percent and beat analysts’ expectations, ending a yearlong streak of missing them.
The company’s shares jumped 5 percent and reached a 52-week high after the news Wednesday.
The Winona-based distributor of construction and industrial supplies said it earned $114.8 million, or 40 cents a share. Analysts expected a profit of 38 cents a share. Revenue was $947.9 million, up 2.7 percent but slightly below the consensus forecast of $951.7 million by analysts.
Dan Florness, Fastenal’s president and CEO, told analysts that the company had an upbeat finish to a tough year. “Our sales trends and our gross profit stabilized and/or improved, depending on if you are looking at a comparison to Q3 or a comparison to Q4 a year ago,” Florness said.
Weak overall growth in the U.S. manufacturing and industrial economy has been hurting Fastenal.
The company has responded by focusing on becoming more efficient and continuing to expand its industrial vending program and its Onsite stores. The machines are more efficient and cheaper to maintain than in-store sales and often lead to larger per-customer spending rates.
Fastenal increased the number of its active Onsite locations, dedicated Fastenal sales and service operations established within a customer’s location, by 137 locations.
The number of installed industrial vending machines increased by 13.2 percent for the year to 62,822.
Fastenal trimmed its overall employee count by 1,122, or 5.4 percent. It said it relied on attrition rather than an active reduction program.
Daily sales growth of Fastenal’s fastener products has been in decline since the first quarter of 2015 and fastener sales decreased 2.4 percent in the fourth quarter. Sales growth of its nonfastener products, including products through its industrial vending program, also began to decelerate in the first quarter of 2015 but nonfastener sales managed to grow 5.9 percent in the fourth quarter.
For the full year, Fastenal’s profit fell 3.3 percent to $499.5 million. Sales rose 2.4 percent to $3.96 billion.