Fastenal Earnings: Free Cash Flow Resilience Leads to a Special Dividend in the Fourth Quarter

Investors were pleased with Fastenal’s fourth-quarter earnings, pushing shares roughly 6% higher in intraday trading. Despite the tough operating environment, the company managed to grow sales by 3.7% year on year in the quarter and expand gross margins by 20 basis points to 45.5%. Stronger fastener margins and slightly better price/cost management were the main drivers. Operating margins came in at 20.1%, 50 basis points higher than the same period a year ago. This was a solid gain given industrial production has been challenged.