Fastenal Company (FAST) Earnings & Analysis

Latest quarter

Fastenal reported Q3 FY2026 revenue of $2.5 billion, up 15.5% from Q3 FY2025. The company reported adjusted EPS, as the consensus counts it, of $0.35, compared with consensus adjusted EPS of $0.34, a 2.94% beat. Revenue, as the consensus counts it, was $2.5 billion versus consensus revenue of $2.5 billion, or 0.95% below the consensus.

Fastenal’s filing said sales growth reflected improved customer-contract signings, product pricing and a modest improvement in industrial production. The filing said product pricing contributed 2.40% to third-quarter sales growth. Gross margin was 44.8%, down −0.4 percentage points year over year, as customer mix, price/cost and other factors affected the measure. Operating margin was 21.5%, up 0.9 percentage points from Q3 FY2025. The company reported diluted EPS of $0.35, up 20.4% year over year, and free cash flow of $349.8 million, up 5.27% from a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Jeff Watts said sales grew 15.5% and that earnings grew faster than sales, with the quarter driven mainly by market-share gains through the key-account strategy and new contract wins. Watts said contract count increased 6.4% from a year earlier, with signings weighted toward multi-site national accounts, while contract customers represented more than 76% of sales and their daily sales grew 18.8%. He said the number of customer sites spending $50K or more per month rose from approximately 2,800 to roughly 3,300 and sales from those sites increased roughly 28%.

Watts said pricing contributed approximately 2.4% to growth, at a slower pace than earlier in the year as the company lapped pricing actions taken in 2025. Max Tunnicliff said industrial conditions improved during the third quarter and that the company’s growth was driven by customer wins, a greater share of existing customers’ spending and improving industrial activity. Tunnicliff said growth opportunities were strongest in data centers and other high-demand markets, while softness was concentrated in a smaller number of areas.

Tunnicliff said customer mix reduced gross margin by approximately 50 basis points because larger customers generally carry lower gross margins. He said price/cost was an approximately 30-basis-point gross-margin headwind, improving by approximately 10 basis points from the second quarter, and that the company remained focused on disciplined pricing. Tunnicliff said favorable items, including direct-sourcing savings, supplier rebates and tariff refunds, added approximately 40 basis points to gross margin, with about 20 basis points reflecting timing.

Watts said the digital footprint was 61.4% of sales and digital sales grew approximately 16% daily, faster than the company overall. He said the company signed approximately 7,500 weighted FMI devices in the quarter and continued to expect 27,000 to 29,000 weighted device settings for the full year. Tunnicliff said third-quarter capital spending was approximately $72 million, directed toward hub capacity, technology, automation and FMI equipment.

Guidance

Fastenal’s October results release changed its FY2026 goal for weighted FASTBin and FASTVend device signings to 27,000–29,000 from its previous goal of 28,000–30,000. Jeff Watts said on the third-quarter call that the company continued to expect 27,000 to 29,000 weighted device settings for the full year.