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Fastenal Company (FAST)Stock (General Building Materials Industry, Manufacturing Industry)
 In 2007 a 30% increase in the price of gasoline resulted in a 20% increase in the amount of money Fastenal spent to power it's distribution and delivery trucks.[3][4] Likewise, spending on new home construction decreased 20% in 2007.[5] As a result, Fastenal's revenue growth decresed from 19% in 2006 to 14% in 2007.[6] On the other hand, Hurricane Katrina resulted in $60 billion dollars worth of insured damage in 2005.[7] This resulted in 27% year over year sales growth for Fastenal in September 2005.[8] Fastenal competes with other construction and industrial supplies retailers like W.W. Grainger (GWW), MSC Industrial Direct Company (MSM) and Anixter International (AXE). [edit] BusinessFastenal sells threaded fasteners and construction products through wholesale leads and through the company's stores.[9] The company's main products include bolts, nuts, screws, washers, studs and other fasteners. Fastenal's other products include tools, cutting tools, abrasives, janitorial supplies and electrical supplies as well as accessories for pneumatic, hydraulic, plumbing and air conditioning systems. 50% of the company's sales come from fasteners and the company's stores each carry 349,000 different kinds of fasteners.[10][11] About 95% of the company's products are manufactured by third parties, some of which are branded with Fastenal names. The other 5% are manufactured by Fastenal.[12] Fastenal's brand names include Fastenal, Blackstone and Rock River Anchors.[13] Fastenal competes with other construction and industrial supplies retailers like W.W. Grainger (GWW), MSC Industrial Direct Company (MSM) and Anixter International (AXE). Fastenal Total Revenues, Operating Income and Net Income[15][16]
[edit] Key Trends and Forces[edit] Rising fuel costs increase the amount of money Fastenal spends on shipping and deliveryWhen the price of fuel rises, Fastenal has to spend more money to power its fleet of distribution and delivery vehicles. On the other hand, when the price of fuel falls, Fastenal has to spend less money to power its fleet of distribution and delivery vehicles. Between December 2006 and December 2007, the average national price of gasoline rose from $2.36 per gallon to $3.07 per gallon.[17] As a result of the increase in the price of gasoline, the amount of money Fastenal spent of fuel increased almost 20% from $24.3 million in 2006 to $29.1 million in 2007.[18] [edit] Decreased spending on new home construction results in slowed revenue growth for FastenalWhen spending on new home construction drops, so does spending on construction equipment and supplies resulting in slowed revenue growth for Fastenal. On the other hand, when spending on new home construction increases, spending on construction supplies increases resulting in faster revenue growth for Fastenal. Between April 2007 and April 2008, total construction spending fell 4%, with a 20% decrease in residential construction spending.[19] As a result of the decrease in new home construction spending, Fastenal's revenue growth slowed from 19% in 2006 to 14% in 2007.[20] [edit] Natural disasters increase the demand for Fastenal's construction products, thereby increasing Fastenal's sales growthWhen natural disasters occur, people buy supplies and tools to repair the damages from stores like Fastenal, increasing Fastenal's sales. In late August 2005 Hurricane Katrina caused nearly $60 billion worth of damage to insured belongings including houses and other buildings.[21] Partially as a result of the effort to clean up and repair the damage caused by Hurricane Katrina, Fastenal's sales grew 27% between September 2005 and September 2004 compared to 22% year over year sales growth in the three months leading up to Katrina.[22] [edit] Key Competitors
Fastenal and Key Competitors ($ in millions)
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