Fastenal Co. reported Monday revenue of $2.08 billion for the second quarter of 2025, an 8.6% increase from the same quarter a year ago and the first time the company’s sales exceeded $2 billion in a three-month period.
Company executives attributed the revenue growth in part to a 9.5% increase in customer contracts to 3,446 from 3,146 a year ago, as well as to price increases that averaged between 1.4% and 1.7% for the quarter, largely a result of U.S. tariffs driving up costs.
Company executives said the pace of price increases accelerated throughout the April-to-June quarter and current prices are now about 3% higher than a year ago. Prices by the end of the year could be 5-8% higher than they were at the end of 2024, executives told investment analysts Monday, while emphasizing that uncertainty over tariffs made predictions difficult.
“There’s lots we still don’t know, but we’re moving forward with what we do know,” said Kevin Fitzgerald vice president of sales operations.
CEO Daniel L. Florness said the distributor was increasing prices to keep up with its rising costs and not to increase profit margins.
“What we are trying to do is understand what are we seeing in our costs and how do we communicate that to our customers,” he said on the earnings conference call. “Our goal is to defend our margins, not enhance it.”
To minimize the impact of U.S. tariffs, Florness said in some cases Fastenal is shipping products directly into Canada and Mexico. While breaking down shipments by country is more expensive than delivering an entire order to a port in the U.S., when factoring in U.S. tariffs, this tactic reduces total cost in some cases, he said. Canada and Mexico represent about 15% of the company’s business.
Fastenal distributes screws, bolts and other fasteners as well as a range of other industrial products. Manufacturers account for 75% of its sales and non-residential construction for another 8.5%, according to the company. Fastenal is ranked No. 3 in the Distribution Strategy Group’s Public Distributor Index of distributors active in North America.
The company reported operating income of $436.1 million, or 21.0% of net sales, a 13.0% increase from $386.4 million in the second quarter of 2024, when operating margin was 20.2%.
Serving smaller customers better through ecommerce
Fastenal’s sales increased more quickly among its larger customers than smaller ones. For example, sales to manufacturers that purchase at least $10,000 per month from the company grew by 10.8% in the second quarter year over year, while sales to manufacturers that purchase less fell by 4.2%.
Company executives credit much of the growth among larger customers to its Fastenal Managed Inventory program that provides technology enabling Fastenal to track customer inventory and suggest replenishment orders.
The number of FMI devices, which include vending machines that order replacements as inventory gets low, reached 132,174 in the second quarter, an increase of 10.8% over 119,306 a year earlier and 23.4% over 107,115 in Q2 2023. FMI sales represented 44.1% of revenue in Q2 2025 versus 41.8% and 39.8% in the second quarters of 2024 and 2023, respectively.
Adding in ecommerce sales from Fastenal.com, and revenue from what Fastenal calls its “digital footprint” accounted for 61.0% of sales in Q2 2025, versus 59.4% and 55.3% in the second quarters of 2024 and 2023, respectively.
Total ecommerce, which includes some EDI transactions also counted in the FMI figure, represented 30.0% of Fastenal’s business in the second quarter, compared to 28.7% a year earlier. Florness said the company aims to improve its ecommerce site as a way to win back business from smaller customers who may have fallen away as the company consolidated physical locations over the last several years.
Speaking of ecommerce, Florness said, “We were bad at it and today we’re not great at it.” And, referring to smaller customers, he added later, “What would be great is if we had an ecommerce solution that customers hop on to and easily order from us, and we would pick up business there.” He said the company is making improvements to Fastenal.com, including by incorporating artificial intelligence to improve search results.
For the second quarter ended June 30, 2025, Fastenal reported:
- Net sales of $2,080.3 million, an increase of 8.6% from $1,916.2 million in the second quarter of 2024.
- Net income of $330.3 million, up 12.8% from $292.7 million in the year-ago period.
For the first six months of 2025, Fastenal reported:
- Net sales of $4,039.7 million, an increase of 6.0% from $3,811.3 million in the first half of 2024.
- Net income of $628.9 million, 6.5% higher than $590.4 million in the first half of 2024.
