Fastenal reports drop in earnings
Fastenal reports sharp declines in earnings and revenue. But even with the recession, the company is planning for the recovery. CEO Will Oberton told analysts Monday that, based on "recent sales improvements and our confidence going forward," Fastenal expects to open 25 stores in the fourth quarter. It opened only a dozen new stores in the second and third quarters, including just three in the third quarter. For the quarter ended Sept. 30, Fastenal reported net income of $47.6 million, down 35 percent from a year ago. That works out to 32 cents a share, a penny below the average consensus of analysts. Third–quarter revenue was $489.3 million, down 21.7 percent from a year earlier. Fastenal's stock closed Monday at $38.44, down 95 cents, or 2.4 percent. Assuming the economy remains somewhat stable, company executives said they anticipate adding stores at an annual rate of 7 to 10 percent in 2010. At the end of the third quarter, Fastenal was operating 2,352 stores. With reduced rental rates on commercial spaces, Oberton said now is a good time to start expanding store locations. Fastenal ended the third quarter with a workforce of 12,076 employees, which was 11.4 percent smaller compared with the end of 2008. Oberton said that the company will "hold very tight" on expenses, including labor.
