It was a modest second quarter overall for Fastenal Co., but the company’s growth driver continues to be digital sales.
For its fiscal second quarter ended June 30, 2024, the fastener distributor grew total sales to $1.916 billion. That’s a 1.8% increase from $1.883 billion in the second quarter of 2023. Net income was $590.4 million compared with $593.1 million in Q3 of the previous.
Fastenal’s digital products and services include ecommerce transactions and sales through Fastenal managed inventory (FMI) programs, including FASTVend internet-connected vending machine programs that the company deploys as part of its on-site sales and services program located at or near customers’ facilities.
Fastenal digital sales guide Q2 growth
As in other recent quarters, digital sales made up two-thirds of all Fastenal revenue.
“On digital footprint, 59.4%, that’s taking all of our ecommerce, all of our FMI, it was 59.4% in the second quarter, actually in June, it hit 60%,” CEO Daniel Florness told analysts. “We had expected that we’d get to about 66% this year. We now think it’s about 63%, and that’s not because we’re not acquiring customers. It’s because customers are spending less, and it shows up in our numbers.”
For the second quarter, using 59.4% and 55.3% of digital as a percentage of all sales, Digital Commerce 360 estimates Fastenal digital sales grew year over year by 1.8% to $1.138 billion from $1.041 billion.
Ecommerce in the second quarter totaled 30.9% of all sales. That compares with digital accounting for 23.3% of all sales in the prior year, Fastenal says. Based on those metrics, Digital Commerce 360 estimates Fastenal web sales grew to $549.89 million in Q2 2024. That’s up 25.3% from $438.73 million in the second quarter of 2023.
“Growth of our e-business reflects both new sales that enhance our growth rate and a shift in existing sales from non-digital to digital processes that improve efficiency,” Fastenal says. “Daily sales through e-business grew 25.5% in the second quarter of 2024 and represented 28.7% of our total sales. In the second quarter of 2024, daily sales through e-procurement and ecommerce grew 30.9% and 11.6%, respectively.”
“E-business rose about 25%. The e-procurement side is really the driver of that. Our ecommerce side is okay,” Florness told analysts. “It’s not great, but some of the things we’re doing with AI is intended to improve that over time on the unplanned spend side.”
Sign up
Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, senior vice president of B2B and Market Research, at mark@digitalcommerce360.com. Follow him on Twitter @markbrohan. Follow us on LinkedIn, Twitter, Facebook and YouTube.