Fastenal Company (NASDAQ:FAST) reported first-quarter results in line with analyst expectations on Monday, but its shares slid around 6% in pre-market trading as investors reacted to signs of slowing growth and margin pressures.
The industrial supplies distributor posted adjusted earnings per share of $0.30 on revenue of $2.2 billion, both matching consensus forecasts. Sales rose 12.4% year-on-year, supported by market share gains and solid demand across key end markets, while daily sales also increased 12.4% to $34.9 million.
Operating margin improved by 20 basis points to 20.3%, reflecting efficiency gains and disciplined cost management. However, this was partly offset by a shift in customer mix. Gross margin edged down to 44.6% from 45.1% a year earlier, impacted by unfavorable pricing dynamics of roughly 50 basis points, along with higher transportation costs and customer rebates.
“Sales performance reflects the contribution from improved customer contract signings since the first quarter of 2024, as well as a slight improvement in industrial production in the first quarter of 2026,” the company said.
Net income increased 13.8% to $339.8 million, while operating cash flow jumped 44.3% to $378.4 million, equivalent to 111% of net income, driven by tight working capital control.
During the quarter, Fastenal added 6,950 weighted FASTBin and FASTVend devices and reaffirmed its full-year 2026 guidance of 28,000 to 30,000 machine equivalent units. Revenue generated through FMI Technology climbed 16.6% to $1.0 billion, accounting for 44.9% of total sales.
The company also returned $295.7 million to shareholders, including $275.6 million in dividends and $20.1 million through share buybacks.