December was a slog for Fastenal Co., which reported muted fourth-quarter results Friday that created some investor anxiety over the health of the industrial sector.
With Christmas falling in the middle of the week, Fastenal's customers were closed for more days during the quarter ended Dec. 31, leaving fewer opportunities to buy fasteners, safety gear and building materials from the company.
"December was a tough month. The midweek holiday at Christmas was not our friend," Chief Executive Dan Florness told investors and analysts.
Fastenal's profit rose 6% but missed expectations. That sent the Winona-based company's stock down 1.4% on a day when broad-market indexes rose slightly, with several at record highs again.
The company is growing, but just not as fast as in the past, its results showed. Fastenal, which is usually the first Minnesota manufacturer to report earnings, is seen as a bellwether for the industrial sector.
Executives expect the lull to persist through January, leaving many analysts to speculate as to what this says about the economy. Industrial manufacturers like Fastenal have faced a recent slowdown in an otherwise healthy economy.
Declines in the manufacturing sector were traced all year as the highly watched purchasing managers index (PMI) fell below 50 for the last five months of 2019.
The two biggest challenges for Fastenal right now are tariffs and inflation, executives said. The Phase One trade deal between the U.S. and China that was signed Wednesday brought good news for some industries, like consumer tech, but offered little relief to the industrial-oriented firms like Fastenal, Florness said.
