Fastenal Company reports 2021 second quarter earnings

Fastenal Company [FAST] a leader in the wholesale distribution of industrial and construction supplies, today announced its financial results for the quarter ended June 30, 2021. Except for share and per share information, or as otherwise noted below, dollar amounts are stated in millions. Throughout this document, percentage and dollar calculations, which are based on non-rounded dollar values, may not be able to be recalculated using the dollar values included in this document due to the rounding of those dollar values.

Year-Over-Year Quarterly Results of Operations

Net sales decreased $1.3, or 0.1%, in the second quarter of 2021 when compared to the second quarter of 2020. The second quarter of 2021 was heavily influenced by two trends. First, in the second quarter of 2020 we sold significant quantities of personal protective equipment (PPE) and sanitation products as a result of actions taken by governments and businesses around the world to address the onset of the COVID-19 pandemic. In the second quarter of 2021, the ability of governments and businesses to manage the pandemic has improved, as reflected in lower infection and higher vaccination rates. As a result, the "surge"-type volumes that we experienced in the second quarter of 2020 did not recur in the second quarter of 2021. Second, demand from our traditional manufacturing and construction customers in the second quarter of 2021 was significantly stronger than in the year earlier period, when measures to address the pandemic resulted in a sharp and broad drop in economic activity. The net effect on sales of these two trends - reduced sales of surge-related product, but improved manufacturing and construction demand - were mostly offsetting.

The overall impact of product pricing on net sales in the second quarter of 2021 was 80 to 110 basis points. We continue to experience pressure related to product and transportation cost inflation. Pricing actions taken in the first and second quarters of 2021 contributed to the increase in the impact of net pricing on sales in the second quarter of 2021. We will continue to take actions as necessary to mitigate the impact of product and transportation cost inflation in the second half of 2021. The impact of product pricing on net sales was immaterial during the second quarter of 2020.

The absence of pandemic-related impacts produced significant shifts in the product mix of our business in the second quarter of 2021. Fastener daily sales grew 28.4% over the second quarter of 2020, and represented 33.6% of our net sales in the second quarter of 2021; fasteners represented 26.0% and 34.5% of net sales in the second quarter of 2020 and the second quarter of 2019, respectively. Improvement from the second quarter of 2020 reflected higher manufacturing and construction demand. Safety product daily sales declined 38.6% from the second quarter of 2020 and represented 21.0% of our net sales in the second quarter of 2021; safety products represented 34.0% and 17.5% of net sales in the second quarter of 2020 and the second quarter of 2019, respectively. The decline from the second quarter of 2020 reflected the absence of surge-related PPE sales, only partly offset by improvements in manufacturing and construction demand. Other products daily sales grew 12.9% over the second quarter of 2020 and represented 45.4% of our net sales in the second quarter of 2021; other products represented 40.0% and 48.0% of net sales in the second quarter of 2020 and the second quarter of 2019, respectively. Improvement from 2020 reflected higher manufacturing and construction demand, only partly offset by the absence of surge-related sanitation sales.