Fastenal Leaders See More Stable Activity – and More Price Hikes Ahead
Looking for a silver lining in the manufacturing sector, which the Institute for Supply Management’s benchmark index says has been in contractor for 30 of the past 32 months? Fastenal Co. executives said July 14 they see a market that has grown more stable even if it remains generally “sluggish.”
How to quickly move beyond that silver lining? The Fastenal team is planning to push through price increases that, depending on how the ever-evolving tariff situation settles, could double the impact of three hikes the company’s rolled out this spring.
Dan Florness, CEO of the Minnesota-based distributor of industrial and construction supplies, and his team were able to point to several encouraging metrics in their second-quarter results. Among them: Daily sales rose 8.6%—improving each month of the quarter and putting up the company’s highest number since early 2023—and customer sites generating $50,000 or more per month grew their sales by a whopping 12.4%.
With the manufacturing sector generally treading water, that speaks to market-share gains for Fastenal. In the company’s notes accompanying earnings, executives said, “Regional leadership continues to believe our growth is due more to customer wins and share gains than the overall market, which remains subdued.” On a conference call with analysts and investors, Florness doubled down on that sentiment.
“Our numbers didn't change as we moved through 2025 because the tide is rising. I will say it has stabilized,” Florness said. “Our execution has dramatically changed and I feel like the organization is really aligned.”
The Fastenal take on overall manufacturing activity echoes that of the leadership team at fellow distributor MSC Industrial Direct Co. Inc., which reported quarterly results at the beginning of the month. At that time, CEO Erik Gershwind told analysts that “conditions in our manufacturing end markets remain subdued. Most of our primary end markets remain soft, including automotive and fabricated metals which continue to contract.”
Gershwind said July 1 that “there remains hesitancy and caution among our customer base around future production levels” because of tariff uncertainty. And the tariffs that are in place have pushed up costs, hence Fastenal’s plans for more price hikes—which Florness said are “to defend our margin, not to enhance it.”
CFO Sheryl Lisowski said the three increases rolled out during the second quarter to pass on suppliers’ hikes added 140 to 170 basis points to Fastenal’s sales during the three months ended June 30, a range that will grow to between 3 and 4 percentage points over time. The increases planned for the second half of this year, Lisowski added, have the potential to double that number depending on the speed of Fastenal’s actions and the evolution of tariff rates.
Kevin Fitzgerald, Fastenal’s vice president of sales operations, added that the company ended June booking price increases of about 3% and that its range today is between 3% and 5%. By year’s end, though, price increases could be in the range of 5% to 8%—again greatly dependent on what happens with tariffs.
Shares of Fastenal (Ticker: FAST) rose more than 4% to $45.07 on the heels of executives’ earnings report and call and hit a 52-week high during the day. They have risen 22% over the past six months, growing the company’s market capitalization to more than $51.7 billion.
