Fastenal Company (NASDAQ:FAST) said on Tuesday that its fourth-quarter earnings met market expectations, but revenue fell just short of forecasts, sending the stock lower.
Shares in the industrial and construction supplies distributor dropped 4.21% in pre-market trading following the results.
Fastenal reported earnings of $0.26 per share for the quarter ended December 31, 2025, in line with analyst estimates. Revenue totaled $2.03 billion, narrowly missing the $2.04 billion consensus forecast, though still representing an 11.1% increase from the same period a year earlier.
The company said its fourth-quarter performance benefited from stronger customer contract signings since early 2024, helping to offset softer industrial production conditions. Unit sales growth was supported by an increase in the number of customer sites spending $10,000 or more per month, while pricing contributed between 310 and 340 basis points to overall net sales growth.
“Our manufacturing end markets outperformed primarily due to the relative strength we are experiencing with key account customers with significant managed spend where our service model and technology are particularly impactful,” Fastenal said in its earnings release.
Gross margin edged down to 44.3% from 44.8% a year earlier, reflecting higher costs of goods sold and the timing of supplier rebates. Operating margin, however, improved slightly to 19.0% from 18.9% in the prior-year quarter.
Direct product sales, including fasteners and hardware, continued to outperform indirect product categories, rising 13.1% year on year. Manufacturing customers were a key driver, with daily sales rates increasing 12.8%.
Looking ahead, Fastenal said it plans to lift capital expenditures in 2026 to between $310 million and $330 million, up from $230.6 million in 2025, as it replaces its Atlanta hub facility and increases investment in trucking capacity and IT infrastructure.
During the quarter, the company returned $252.6 million to shareholders through dividends, compared with $223.4 million paid out in the fourth quarter of 2024.