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Fastenal Co

FAST: XNAS (USA)
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Morningstar Rating for Stocks Fair Value Economic Moat Capital Allocation
$13.00PgyqJdyqqnjvb

Cooling Economic Activity Leads Us to Bring Down our 2023 Expectations for Fastenal

Wide-moat-rated Fastenal posted 16% year-on-year sales growth in the quarter, showing customer demand remains stable, despite cooling in some end markets. The company continues to perform well in the manufacturing vertical. Sales to heavy equipment manufacturers grew by nearly 29% year over year, while total manufacturing sales increased over 22% year over year. Construction sales came in a bit over 5% in the third quarter, down from about 10% year-on-year sales growth in the second quarter of 2022. We expect the U.S. infrastructure deal to stabilize sales growth in 2023, as new construction projects get underway. Management highlighted that contractors typically go to Fastenal later in the construction cycle, often for higher-margin spot buys.

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