Analyst Note| Brian Bernard, CFA, CPA |
While Fastenal's top and bottom lines were unchanged from the year-ago period, we thought the wide-moat-rated industrial distributor's second-quarter results were solid. A strong rebound in fasteners and other nonsafety product sales, which increased 28% and 13% year over year, respectively, was offset by a 39% decline in safety product revenue. We were expecting a drop in safety product sales given a tough prior-year sales comparison and the significant decrease in COVID-19 cases in the United States, and the decrease was similar to the 42% decline reported by fellow distributor MSC Industrial for its most recent quarter. Still, Fastenal's $1.5 billion of sales was 10% higher than the second quarter of 2019, which tells us the company's traditional end markets are recovering while pandemic-related sales continue, albeit at more moderate levels.