FASTENAL CO (FAST) Q3 2025 Earnings Summary

Executive Summary

Q3 2025 delivered double-digit top-line growth and margin expansion: revenue $2.133B (+11.7% YoY), gross margin 45.3% (+40 bps YoY), operating margin 20.7% (+40 bps YoY), EPS $0.29 (+12.3% YoY) .
Results were modestly above S&P Global consensus: EPS $0.29 vs $0.297* and revenue $2,133.3M vs $2,131.5M*; beats were small but broad-based across fasteners, safety, and MRO categories .
Management lowered 2025 capex guidance again to $235–$255M (from $250–$270M in Q2 and $265–$285M in Q1), maintained ~24.5% ongoing tax rate, and trimmed Q4 like-for-like pricing target to 3.5–5.5% (from 5–8%) amid tariff-related uncertainty .
Stock-relevant catalysts: continued fastener outperformance, accelerating digital footprint/FMI sales, and share gains with contracts; near-term watch items include seasonal Q4 gross-margin dip and “price fatigue” from tariffs and litigation—potentially muting upside despite strong execution .
Values with * retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

Share gains drove an 11.7% YoY revenue increase with unchanged selling days; pricing contributed ~240–270 bps while volume and site growth fueled the remainder .
Fastener expansion initiative lifted mix and margin; fastener DSR +14.4% YoY with OEM +15.9% and MRO +12.0%; management highlighted “profitable growth” with operating margin 20.7% and net income +12.6% YoY .
Digital engines accelerated: FMI sales 45.3% of total (+230 bps YoY) and daily FMI sales +17.7% YoY; digital footprint reached 61.3% of sales, signings stepped up to ~110/day .

Management quotes:

“We delivered double-digit growth, expanded margins, and continued to gain share in a flat market.” — Jeff Watts .
“Fastener sales grew over 15% in September…resulted in a meaningful lift in…the gross margin.” — Jeff Watts .
“Drive growth through technology.” — Dan Florness .

What Went Wrong

Pricing cadence slower than planned: Q3 pricing impact came later (August action), leading management to trim Q4 like-for-like pricing goal to 3.5–5.5% (from 5–8%) and caution on potential margin squeeze with rising costs .
SG&A up 11.5% YoY in Q3; employee-related expenses +12.9% YoY (bonus/commission reset with better performance), tempering leverage despite revenue growth .
Macro still sluggish (PMI sub-50); Mexico OEM-heavy business under pressure; management flagged “price fatigue” and customers deferring incremental decisions until tariff/legal clarity .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$1,910.2	$1,959.4	$2,080.3	$2,133.3
Diluted EPS ($USD)	$0.26	$0.52	$0.29	$0.29
Gross Margin (%)	44.9%	45.1%	45.3%	45.3%
Operating Margin (%)	20.3%	20.1%	21.0%	20.7%
SG&A (% of Sales)	24.6%	25.0%	24.4%	24.6%
Net Income ($USD Millions)	$298.1	$298.7	$330.3	$335.5

Actual vs S&P Global consensus for Q3 2025:

Metric	Consensus	Actual	Surprise
Revenue ($USD Millions)	$2,131.5*	$2,133.3	+$1.8; +0.1%*
EPS ($)	$0.297*	$0.29	+$0.003; +1.0%*
EPS Estimates (#)	15*	—	—
Revenue Estimates (#)	12*	—	—
Values with * retrieved from S&P Global.

Segment breakdown – Product categories:

Category	DSR YoY Q3’24	DSR YoY Q2’25	DSR YoY Q3’25	% Sales Q3’24	% Sales Q2’25	% Sales Q3’25
OEM Fasteners	-3.1%	+8.4%	+15.9%	19.0%	19.4%	19.8%
MRO Fasteners	-5.3%	+3.4%	+12.0%	11.2%	11.1%	11.2%
Safety Supplies	+6.8%	+10.7%	+9.8%	22.5%	22.2%	22.1%
Other Product Lines	+3.7%	+9.0%	+10.7%	47.3%	47.3%	46.9%

Segment breakdown – End markets:

End Market	DSR YoY Q3’24	DSR YoY Q2’25	DSR YoY Q3’25	% Sales Q3’24	% Sales Q2’25	% Sales Q3’25
Heavy Manufacturing	+0.7%	+1.8%	+12.4%	42.7%	42.9%	43.1%
Other Manufacturing	+6.2%	+4.0%	+12.9%	32.4%	33.0%	32.8%
Non-Residential Construction	-3.6%	+3.0%	+7.5%	8.6%	8.1%	8.3%
Other End Markets	-0.3%	+1.5%	+8.9%	16.3%	16.0%	15.8%

Customer type mix:

Customer Type	DSR YoY Q3’24	DSR YoY Q2’25	DSR YoY Q3’25	% Sales Q3’24	% Sales Q2’25	% Sales Q3’25
Contract	+6.3%	+11.0%	+13.2%	72.0%	73.2%	73.8%
Non-Contract	-8.1%	+2.6%	+7.2%	28.0%	26.8%	26.2%

KPIs and Digital engines:

KPI	Q1 2025	Q2 2025	Q3 2025
Daily Sales ($)	$31.1	$32.5	$33.3
Weighted FASTBin/FASTVend Signings (MEUs)	6,418	6,458	7,050
Installed FASTBin/FASTVend (MEUs)	129,996	132,174	133,910
FMI Sales ($)	$859.0	$928.5	$978.4
FMI % of Sales	43.3%	44.1%	45.3%
FMI Daily Sales ($)	$13.6	$14.5	$15.3
eBusiness Sales ($)	$607.6	$631.9	$628.7
eBusiness % of Sales	30.7%	30.0%	29.1%
Digital Footprint Sales ($)	$1,208.0	$1,284.7	$1,323.8
Digital Footprint % of Sales	61.0%	61.0%	61.3%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Capital Expenditure (net, $M)	FY 2025	$265–$285 (Q1) ; $250–$270 (Q2)	$235–$255 (Q3)	Lowered again
Weighted FASTBin/FASTVend Signings (MEUs)	FY 2025	28,000–30,000 (Q1)	25,000–26,000 (Q2 maintained in Q3)	Lowered in Q2; maintained
Ongoing Tax Rate (%)	FY 2025	~24.5% (Q1)	~24.5% (Q2/Q3)	Maintained
Q4 Like-for-Like Pricing Impact (%)	Q4 2025	5–8% (prior plan referenced)	3.5–5.5%	Lowered
Gross Profit % Full-Year	FY 2025	—	Roughly flat vs 2024	Introduced
Dividend per Share ($)	Q3 2025	$0.22 (declared July for Aug 26)	$0.22 (pay Nov 25; record Oct 28)	Maintained; new dates

Other 2025 investment notes: Utah hub completed in Q3; Atlanta hub under construction; elevated IT and FMI hardware spend embedded in capex plan .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2, Q-1)	Current Period (Q3 2025)	Trend
Pricing & Tariffs	Q2: pricing +140–170 bps; plan to implement actions; tariff uncertainty	Q3: +240–270 bps; August action delayed cadence; Q4 target trimmed to 3.5–5.5%; caution on margin squeeze	Pricing impact increasing; cadence slower; fatigue evident
Fastener Expansion	Q1: first growth after 7 flat/declining quarters ; Q2: improved but lagged non-fasteners	Q3: fasteners outperformed non-fasteners; OEM/MRO double-digit DSR	Strengthening
Digital Footprint/FMI	Q1: Digital 61.0%; FMI 43.3% ; Q2: Digital 61.0%; FMI 44.1%	Q3: Digital 61.3%; FMI 45.3%; signings ~110/day	Gradual expansion
End-Market Demand	Q2: non-res construction up for first time in 10 quarters	Q3: second time in 12 quarters; manufacturing acceleration via contracts	Improving slowly
Supply Chain & Inventory	Q2: elevated inventory ahead of tariffs and service levels	Q3: inventory adds continued; better availability; AP up with inventories	Ongoing investment
Regulatory/Tax	Q2: OBBBA impacts assessed	Q3: OBBBA immaterial; ongoing tax ~24.5%	Stable
Regional (Mexico)	—	Mexico OEM-heavy exposure under pressure; global OEM mix reassessed	Challenged
eCommerce	Q2: eBusiness +13.5% daily sales	Q3: +8% daily; Fastenal.com relaunch expected to help in 2026	Moderating near-term

Management Commentary

Strategy execution: “Plan the work and work the plan…Q3 was a strong and consistent quarter…double-digit growth, expanded margins, and share gains in a flat market.” — Jeff Watts .
Pricing cadence and customer engagement: “Delaying price by ~30 days muted Q3 impact but allowed better customer discussions and substitutions.” — Dan Florness .
Margin outlook: “We could get a little margin squeeze in Q4 as costs rise; we target full-year gross margin flat vs 2024.” — Dan Florness; Sheryl Lisowski .
Fastener initiative ROI: “Phase one and most of phase two accretive to ROIC…inventory added enhanced returns” — Dan Florness .
Digital and technology: “Drive growth through technology…FMI sales 45.3% of total; installed base ~134k devices.” — Jeff Watts; Dan Florness .

Q&A Highlights

Pricing mechanics and cadence: Pricing actions shifted into August; Q4 target lowered; aim to keep price-cost neutral, leveraging substitutions and supply base negotiations .
SG&A and bonus reset: Elevated Q3 SG&A from bonus/commission resets with stronger performance; management tightening expense growth, but expects similar patterns until anniversarying in 2Q26 .
Demand outlook: Customers largely planning for 2026; limited Q4 macro tailwind expected; calendar effects could lengthen shutdowns .
Fastener expansion and returns: Inventory normalization improves service levels and capture rates, supporting accretive ROIC despite higher days inventory .
Q4 gross margin: Seasonal drop expected; management still targeting full-year flat gross profit percentage vs 2024 .

Estimates Context

Q3 2025 results vs consensus: EPS $0.29 vs $0.297* (small beat), revenue $2,133.3M vs $2,131.5M* (small beat); 15 EPS and 12 revenue estimates contributed* .
Consensus target price: $43.46*; consensus recommendation unavailable* [functions.GetEstimates].
Implication: Given modest beats and management’s cautious Q4 gross-margin commentary and pricing cadence reset, near-term estimate revisions may be limited; upside likely tied to sustained fastener outperformance and digital mix.
Values with * retrieved from S&P Global.

Key Takeaways for Investors

Share gains are the primary driver in a soft macro: contract sales +13.2% YoY, non-contract +7.2% YoY; focus on large accounts and Onsite-like sites is working .
Fastener expansion is materially improving mix/margins; monitor OEM/MRO fastener momentum and inventory availability improvements across hubs .
Digital engines provide structural tailwinds: FMI % of sales up to 45.3% and digital footprint 61.3%; these correlate with better customer integration and stickiness .
Watch Q4 margin seasonality and tariff/price fatigue: management flagged possible margin squeeze; pricing target trimmed; near-term upside may rely on execution rather than macro .
Capex path reduced (now $235–$255M) while continuing to fund Utah/Atlanta hubs and IT/FMI hardware—supporting service levels without over-investing .
Cash generation strong (Q3 OCF $386.9M; 115.3% of net income) and balance sheet conservative (debt 4.8% of total capital), supporting dividends ($0.22 payable Nov 25) .
Medium-term thesis: sustained contract signings, fastener-led margin enhancement, and digitization should underpin EPS growth into 2026 as macro normalizes; monitor Mexico/PMI sensitivities and eBusiness relaunch impact .

Bolded beats/misses were modest; the narrative driver remains share gains, fastener initiative success, and digital momentum amid tariff-driven pricing complexity.