Higher unit sales boost Fastenal's top line in Q2

Fastenal Company achieved a 1.6% growth rate in net sales during the second quarter, even though fastener growth contracted and earnings decreased.

Net sales for the quarter ended June 30 were $1.01 billion, up 1.6% year-over-year.

However, net earnings decreased 6.3% to $131.5 million.

Within the fastener business, the product line experienced a 2% contraction in the first half of 2016, following a 6% contraction in the fourth quarter of 2015.

"The [production/construction market] is a great business, but it can be cyclical because about 75% of our manufacturing customer base is engaged in some type of heavy manufacturing," said the company in a statement. "The sale of production fasteners is also a sticky business in the short-term as it is expensive and time consuming for our customers to change their supplier relationships. While our customers value the capabilities we bring to the table, in the last eight quarters this group of customers has seen a contraction in its production and therefore its need for fasteners."

As for non-fastener sales, the product line improved to 5% growth during the first half of 2016 after it contracted to about 2% growth in the fourth quarter of 2015.

The company also highlighted growth in employee count, logging 4.1% growth in end-of-period total employee count. That's 296 store employees and 797 employees total in the last 12 months.

Fastenal also opened 27 stores in the first six months of 2016, compared with 8 stores in the year-ago period.

"Fastenal is a growth focused organization and we constantly strive to make investments into the growth drivers of our business," said the company. "These investments typically center on people. By adding more people we add to our ability to interact with and to serve our customers from our local store and to back them up in some type of support role."