Report: Tuesday, July 14, 2026, before market open
Presentation: 6:00 a.m. CT
Conference call: 9:00 a.m. CT / 10:00 a.m. ET (investor.fastenal.com)
Fastenal enters Q2 with strong underlying sales momentum, an improving manufacturing backdrop, and continued market-share gains among large contract customers. The central question is no longer whether revenue is growing—it clearly is—but how much of that growth reaches operating income after tariff-related inflation, pricing delays, unfavorable customer mix, and the expiration of prior fastener-project benefits.
The setup appears favorable for revenue, because April and May daily sales grew 14.3% and 14.8%, respectively. Consensus of approximately $2.34 billion in revenue and $0.33 in EPS implies roughly 12.3% sales growth and 13.8% EPS growth. (marketscreener.com)
However, management explicitly described Q2 as “challenging” due to price-cost timing. Consequently, the stock’s response will probably depend more on gross margin, June sales quality, and second-half price-cost commentary than on a modest headline revenue beat. (fool.com)
| Metric | Q2 2026 consensus | Q2 2025 actual | Implied change |
|---|---|---|---|
| Revenue | ~$2.34B | $2.080B | ~12.3% |
| Diluted EPS | $0.33 | $0.29 | ~13.8% |
| Operating margin* | ~21.5%–21.6% | 21.0% | ~50–60 bps |
*Approximation based on consensus EPS, Fastenal’s recent diluted share count, negligible net interest expense, and management’s approximately 24.6% ongoing tax-rate assumption. Consensus revenue and EPS estimates are sourced from aggregated analyst data. (finanzen.net)
The implied operating result is important: consensus effectively assumes mid-20% incremental operating margins, close to management’s reiterated view that full-year incrementals could remain in the high 20s. That is an achievable but meaningful hurdle given the expected gross-margin pressure. (fool.com)
Fastenal has already disclosed:
At the current $2.336 billion consensus, June revenue would need to be about $794 million. Assuming 22 business days, that implies approximately 8% June daily-sales growth, a substantial moderation from April and May.
That creates some room for a top-line beat:
The June comparison is harder than April and May because June 2025 daily sales grew 9.8%, versus relatively softer year-earlier comparisons in the first two months of Q2. Still, consensus appears to allow for a meaningful sequential slowdown. (s23.q4cdn.com)
May’s growth was broad:
The best outcome would be continued double-digit growth across both contract and non-contract customers. If growth remains disproportionately concentrated in large contracts, revenue may look excellent while gross margin remains under pressure.
Q1 gross margin declined 50 basis points to 44.6%, primarily because tariff-related and other product costs moved through the income statement faster than Fastenal could implement customer pricing. Management estimated that gross margin was approximately 40 basis points below its own Q1 target. (investor.fastenal.com)
Q2 has several specific headwinds:
Fastenal’s model can tolerate gross-margin dilution if higher-volume contract customers produce enough fixed-cost leverage. In Q1, SG&A improved to 24.3% of sales from 25.0%, allowing operating margin to rise despite lower gross margin. Management also indicated that it had largely anniversaried the incentive-compensation reset entering Q2. (investor.fastenal.com)
The cleanest positive result would therefore be:
A revenue beat paired with operating margin below 21% would be a lower-quality result.
The ISM Manufacturing PMI averaged approximately 53.3 during Q2, versus roughly 52.6 in Q1. Manufacturing expanded throughout the quarter, with readings of 52.7 in April, 54.0 in May, and 53.3 in June. New orders also remained in expansion. (ismworld.org)
That is supportive for Fastenal’s manufacturing-heavy customer base. It also helps distinguish current growth from the prior period, when most gains came from share capture despite sluggish industrial production.
The complication is inflation: ISM’s Prices Index was exceptionally high at 84.6 in April and 82.1 in May, before moderating to 73.0 in June. Falling from extreme levels is helpful, but 73 still indicates broad input-cost increases. (ismworld.org)
Investors should listen for whether management sees:
Fastenal’s Q1 contract sales grew 14.6%, versus 6.7% for non-contract customers. Contract customers represented more than 75% of sales, while the number of customer sites generating at least $50,000 per month rose 16.3% to 2,909. (investor.fastenal.com)
Digital and inventory-management tools are central to those gains:
Important Q2 KPIs include:
Continued high-teens growth in contract and FMI sales would support the argument that Fastenal’s growth is primarily structural share gain rather than merely cyclical recovery.
Q1 operating cash flow was $378 million, or 111% of net income, helped by disciplined inventory management. Inventory increased just 1.1% year over year despite 12.4% sales growth, a significant improvement from the inventory build seen during 2025. (investor.fastenal.com)
Fastenal still expects $310–330 million of 2026 capital spending, including distribution capacity, automation, vehicles, IT, and the replacement Atlanta-area hub. The company has low leverage and substantial capacity to fund these investments while returning cash to shareholders. (investor.fastenal.com)
On July 10, the board raised the quarterly dividend from $0.24 to $0.26 per share. Fastenal also disclosed 650,000 Q2 share repurchases, bringing 2026 repurchases to 1.075 million shares at an average price of approximately $46.33. The buyback remains modest, but the dividend increase and repurchases provide a positive signal immediately ahead of earnings. (wpta21.marketminute.com)
This is expected to be Dan Florness’s final earnings call as CEO. President and Chief Sales Officer Jeff Watts is scheduled to become CEO on July 16, 2026, two days after the report. (investor.fastenal.com)
The announced transition appears designed for continuity, but investors should watch for any change in:
Given the timing, the call may include more strategic discussion than a typical Fastenal quarter.
At roughly $47, FAST trades near:
The shares are up roughly 17% year to date and approximately 9% over the last year. That premium valuation leaves limited tolerance for deteriorating margins or cautious second-half commentary.
| Outcome | Potential interpretation |
|---|---|
| Bull case | Revenue above $2.35B, June DSR remains double-digit, operating margin ≥21.5%, and management sees clear Q3/Q4 price-cost recovery |
| Base case | Revenue near $2.34B, EPS around $0.33, operating margin near 21%, with gradual—not immediate—margin improvement |
| Bear case | June DSR drops below high single digits, gross margin falls materially, operating margin misses 21%, or management delays expected price-cost normalization |
Fastenal is positioned to deliver another quarter of double-digit revenue and earnings growth. The available monthly data suggest that revenue consensus is beatable, particularly if June daily-sales growth remained at least around 10%.
But the higher-value information will be found below the top line. Investors should prioritize:
A small revenue beat alone may not be enough at roughly 38× current-year earnings. A constructive report likely requires evidence that Fastenal can convert its impressive share-driven growth into sustained operating-margin expansion.