It’s been a very busy past few months for Fastenal.

Besides reporting its 2022 fourth-quarter and full-year financial results on Jan. 19, the industrial distributor announced a day earlier that it had surpassed $1 billion in annual sales outside of the U.S. during for the first time in 2022. The company also announced the release of the its inaugural ESG Report. Back in November 2022, the company shared that it had reached $1 billion in annual eCommerce revenue for the first time.

Winona, Minnesota-based Fastenal was No. 7 on MDM’s 2022 Top Industrial Distributors list. 

Overall, Fastenal’s 4Q figures showed continued, solid year-over-year sales gains, though growth rates had a notable deceleration from the past several quarters.

The company reported fourth-quarter total sales of $1.7 billion — up 10.7% year-over-year. Daily sales grew by that same amount. Sequentially, total sales were down 5.9% from the third quarter, when growth was 16%.

Fastenal’s 4Q gross profit of $768 million grew 7.8% year-over-year. Sequentially, it trailed 3Q’s $827 million and 14.8% growth. Likewise for operating profit, 4Q’s was $333 million and 10.7% year-over-year growth trailed 3Q’s $379 million and 19.1% growth.

The company’s 4Q net profit of $246 million and 6.2% year-over-year growth trailed 3Q’s $285 million and 16.9% growth.

“We experienced higher unit sales in the fourth quarter of 2022 that contributed to the increase in net sales in the period,” Fastenal’s earnings release stated. “This was due to further growth in underlying demand in markets tied to industrial capital goods and commodities, which more than offset softer markets tied to consumer goods and relatively lower growth in construction.”

Fastenal said that the overall impact of product pricing on net sales during 4Q was 350 to 380 basis points compared to a year earlier. That’s a considerable deceleration from the 550 to 580 bps in 3Q. The company said it did not take any broad pricing actions in 4Q.

Full Year

For the full year, Fastenal’s 2022 sales were $6.98 billion, up 16.1% from 2021, with daily sales up 15.7%. Gross profit of $3.22 billion grew 15.8% and operating profit of $1.45 billion grew 19.4%. The company’s 2022 net profit was $1.09 billion, up 17.5% over 2021.

Product Performance

Fasteners comprised 33% of Fastenal’s 4Q sales and saw year-over-year growth of 9.1% (24.2% a year earlier). Safety supplies comprised 21.3% of 4Q sales and saw 10.7% growth (3.5% a year earlier). All other products comprised 45.7% of 4Q sales and saw 12.1% growth (12.8% a year earlier).

Customer Performance

Manufacturing customers comprised 72.9% of Fastenal’s 4Q sales (69.7% a year earlier) and grew 16% year-over-year (23.8% a year earlier). Non-residential construction customers comprised 9.8% of 4Q sales (11.0% a year earlier) and fell 0.6% year-over-year (14.8% growth a year earlier). All other customers comprised 17.3% of 4Q sales (19.3% a year earlier) and fell 0.9% year-over-year (-9.9% a year earlier).

National accounts comprised 58.9% of Fastenal’s 4Q sales (57.8% a year earlier) and grew 15% year-over-year (19.9% a year earlier). Non-national accounts comprised 41.1% of 4Q sales (42.2% a year earlier) and grew 5.6% year-over-year (7.6% a year earlier).

Footprint & Headcount

Fastenal ended 4Q with 1,683 branch locations — down 1.9% from 3Q and down 6.1% since the end of 2021. The company opened one new branch in 4Q and closed 34, net of conversions. Meanwhile, its number of active Onsite locations ended 4Q at 1,623 — up 3.6% from 3Q and up 14.6% from the end of 2021. It activated 76 Onsite locations during 4Q and closed 20, net of conversions. The company’s weighted FMI devices count ended 4Q at 102,151 — up 2.8% from 3Q and up 10.0% from the end of 2021.

Fastenal ended 4Q with an absolute total headcount of 22,386 — up 1.6% from 3Q and up 9.2% year-over-year. It’s total full-time-equivalent headcount ended 4Q at 19,854, up 1.7% from 3Q and up 8.3% from the end of 2021.

$1 Billion in International Sales

In marking its international sales milestone, Fastenal noted that its first branch outside of the U.S. opened in September 1994 in Stoney Creek, Ontario, Canada. It had just two employees and around $1,800 in first-month sales.

Today, Fastenal’s international business has grown to include sales, service and support teams in 25 countries spanning the Americas, Europe and Asia.

“This was not a small accomplishment, and it took hard work and commitment from everyone involved to reach it,” said Jeff Watts, Fastenal’s EVP of international sales (and one of the company’s first employees in Canada). “It shows what can be accomplished when we work together as One Team with a common goal, and it’s humbling to be a part of.”

From 2012 to 2022, Fastenal’s international revenues more than tripled, while its international headcount grew from about 1,800 to 4,500 in that same time.

“As we continue to invest in international teams and structures, we’re expanding our ability to support local, regional, and global organizations with in-market resources and proven value-creation programs,” Florness said. “Congratulations to our international teams for achieving the $1 billion revenue milestone, and thank you for helping to make Fastenal a world-class supply chain partner.”