Fastenal (FAST) Q2 2026 earnings summary

Executive summary

• Q2 2026 delivered 14.7% year-over-year daily sales growth, driven by share gains, contract wins, and broad-based demand across manufacturing and construction end markets.

• Operating margin held steady at 21.0% as SG&A leverage offset gross margin headwinds, and ROIC expanded to 31.4%, the highest in over a decade.

• Technology and digital initiatives, including FMI devices and eBusiness, continued to scale, supporting customer retention and operational efficiency.

• Leadership transition as Dan Florness steps down as CEO, with Jeff Watts set to continue the current strategic direction.

• Net income increased 15.9% to $382.8 million, with diluted EPS up to $0.33 from $0.29 in Q2 2025.

Financial highlights

• Net sales for Q2 2026 were $2,386.9 million, up 14.7% year-over-year, with gross margin declining 75 bps to 44.6% due to unfavorable price/cost and customer mix.

• Operating income increased 15.1% to $501.8 million; net income grew 15.9% to $382.8 million; diluted EPS was $0.33.

• SG&A as a percentage of sales improved to 23.5%, reflecting strong cost control and productivity.

• Operating cash flow was $265.7 million, representing 69% of net income, impacted by higher receivables from strong late-quarter sales.

• $305.1 million returned to shareholders in Q2, representing 79.7% of net income, mainly via dividends and share repurchases.

Outlook and guidance

• Market conditions remain stable to modestly positive, with U.S. PMI above 53 and industrial production slightly positive.

• Gross margin expected to remain consistent with historical trends, with ongoing focus on price cost neutrality.

• Weighted FASTBin and FASTVend device signings goal for 2026 set at 27,000–29,000 MEUs.

• 2026 capital expenditure guidance raised to $310–$330 million, focused on facility upgrades, trucking, and IT investments.

• Ongoing tax rate anticipated at approximately 24.6%.