Fastenal (FAST) - Get Report beat Wall Street's second-quarter earnings and revenue expectations as the maker of industrial and construction fasteners reported sales of personal protection equipment surged due to the coronavirus pandemic.
Shares of the Winona, Minn., company at last check were 1.3% higher at $43.94.
Fastenal reported earnings of $238.9 million, or 42 cents a share, up from $204.6 million, or 36 cents, in the year-earlier quarter. Analysts surveyed by Zacks had expected the company to earn 36 cents a share.
Revenue totaled $1.51 billion, up 10% from a year earlier and beating the Zacks estimate of $1.48 billion.
"The second quarter of 2020 was heavily influenced by actions taken by governments and businesses around the world to address the covid-19 pandemic, which influenced our efforts in several ways," the company said in a statement.
Fastenal said it helped governments, first responders, and critical-infrastructure entities by supplying personal protective equipment products.
"This generated significant 'surge'-type PPE orders in the second quarter of 2020 that did not exist in the second quarter of 2019," the company said.
Fastenal said business closures and reduced general economic activity due to the pandemic resulted in lower sales in its traditional branch and on-site operations, and by extension, its vending business.
Fastenal operates a diversified vending machine business and roughly half of all sales of safety products occur at its vending machines.
"Taking these two variables together, surge sales of PPE more than offset the decline in our traditional business, producing the net sales increase in the second quarter of 2020," the company said.
Sales of surge-type PPE were steady at high levels in April and May, before beginning to taper slightly in June, Fastenal said.
"As we enter the third quarter of 2020, and as the chaos surrounding the pandemic and our pipeline of orders lessens, we expect surge-type orders to decline," the company said.