Fastenal saw its profits rise 6% in the fourth quarter, offering another glimpse of growth in manufacturing and construction activity.
Revenue grew 11% to $1.7 billion for the Winona-based supplier of fasteners and other industrial and construction items needed on production floors and construction sites.
The increase in sales was "due to further growth in underlying demand in markets tied to industrial capital goods and commodities, which more than offset softer markets tied to consumer goods and relatively lower growth in construction," the company said in its earnings release.
Fastenal had been raising its prices through the year to offset inflation, helping the results as well. The company said it did not institute any broad price increases in the fourth quarter, as spot prices for expenses such as fuel, steel and transportation have moderated over the last six months.
The company earned $245.6 million in the quarter. Earnings per share were 43 cents, an increase of 7% over the same period a year ago.
The quarterly and annual results nudged past Wall Street expectations. For the year Fastenal earned $1.1 billion, or $1.89 a share, on annual revenue that grew to $6.98 billion.
On the earnings call with analysts, Chief Executive Dan Florness noted the company passed three $1 billion milestones in 2022: annual international sales, e-commerce sales and net income.
Fastenal this week also caught up with most other large public companies and released its inaugural environmental, social and governance (ESG) report.
"I encourage the folks on this call to read it, don't wait for the movie," Florness told analysts.
More work will continue on Fastenal's ESG reporting, and Florness promised a "deeper dive" into the topics next year including progress toward meeting longer-term climate impact goals.
"During 2022, we announced that we are working towards a plan to reach net zero emissions by 2050," Florness wrote.
The ESG efforts are being overseen by the board and in 2021 Fastenal created a dedicated ESG team to gather data from across the organization. In many instances, it was data that Fastenal had already been collecting and reporting but not putting in a dedicated ESG report.
Fastenal had faced shareholder proposals in past years to disclose more information on its workplace diversity and it has been providing its EE0-1 reports that all large employers must report to the government but are not required to disclose publicly. That information and much more is in the inaugural 67-page ESG report.
Shares of Fastenal closed Thursday at $46.80, down 1.6% on a day when broad market indexes were also down. Over the last 52 weeks, Fastenal shares have ranged between $43.73 and $60.74 a share.
