Fastenal Stock Dives. What Its Earnings Say About U.S. Manufacturing.

Coming into Monday trading, Fastenal stock had raced ahead by 27% so far in 2025. Shares were up about 19% over the past 12 months. (Getty Images)

Key Points

• Fastenal reported third-quarter earnings per share of 29 cents on sales of $2.1 billion, missing analyst estimates of 30 cents per share.
• Operating profit margins for Fastenal increased to 20.7% in the third quarter of 2025, up 0.4 percentage points from 20.3% a year ago.
• Fastenal’s third-quarter sales rose almost 12% year over year, with average daily sales in July and August advancing by 12.8% and 11.8% respectively.

Industrial distributor Fastenal kicked off the manufacturing sector’s earnings season, reporting third-quarter earnings that just missed Wall Street estimates.

Things are getting better, but investors wanted more. Fastenal shares fell on Monday.

The company, on Monday, reported earnings per share of 29 cents from sales of $2.1 billion. Wall Street was looking for third-quarter earnings of 30 cents a share from sales of $2.1 billion. Sales rose 11.7% year over year.

A year ago, Fastenal reported per-share earnings of 26 cents from sales of $1.9 billion. Operating profit margins in the third quarter of 2025 were 20.7%, up from 20.3% a year ago.

There was improvement—just not as much as Wall Street had forecast. Shares of the distributor dropped 7.5% to $42.33, while the S&P 500 and Dow Jones Industrial Average gained 1.6% and 1.3%, respectively.

Despite the drop, William Blair analyst Ryan Merkel told investors to “buy the dip,” adding in a Monday report that double-digit sales growth is tough to find with industrial companies. He expects profit margins to continue to improve. “Slight EPS miss does not take away from impressive growth.” Merkel rates shares “Outperform,” and doesn’t have a price target for the stock.

Fastenal offers investors a close to real-time look into the sector. It sells hundreds of thousands of products to thousands of industrial customers. Investors have not been pleased with what they have seen lately.

The Institute for Supply Management’s Purchasing Managers’ Index, or ISM PMI, came in at 49.1 in September, up from 48.7 in August. A reading above 50 indicates growth. The September reading is the seventh consecutive reading below that level. The January reading was positive at 50.9, snapping a streak of 26 consecutive months below 50, after all revisions.

There have been pockets of strength, mainly related to building AI data centers or commercial aircraft, but it has been a terrible stretch for many manufacturers.

Fastenal typically outpaces the industrial sector, and its sales growth is accelerating—one reason shares were up about 27% year to date coming into Monday trading.

Fastenal’s second-quarter sales growth was almost 9% from the year-earlier quarter. Average daily sales at Fastenal stores in July and August advanced by 12.8% and 11.8%, respectively, from the prior year. Third-quarter sales rose almost 12% year over year.

Things are improving, but high expectations dinged the stock on Monday.

Recent gains have left Fastenal stock trading for about 37 times estimated next year’s earnings, up from about 35 times a year ago.

Write to Al Root at allen.root@dowjones.com