Fastenal Co. crossed a major milestone in its fiscal Q2 of 2025, reporting more than $2 billion in quarterly sales for the first time in its history, which was driven by accelerating growth in digital commerce, supply chain services, and contract wins.
Fastenal sales rose 8.6% year over year to $2.03 billion. That marked the company’s strongest quarterly growth rate since early 2023. Executives attributed the gains not to market conditions, which remain “sluggish,” they said, but to stronger execution, pricing actions, and rising digital engagement.
Fastenal’s contract-based sales rose 11% in the quarter and now account for 73.2% of total revenue. That’s up from 71.2% a year ago. The company signed 84 new contracts during the quarter, a notable increase from the prior two quarters.
“I’d like to express my appreciation to everyone across the organization for their contributions,” said Jeffery Michael Watts, Fastenal’s new president and chief sales officer, on an earnings call with investors. “We’re focused on becoming more than a distributor. We’re a supply chain partner embedded at the point of use.”
Fastenal digital sales in Q2
The company also reported robust performance across customer locations, generating $10,000 or more per month in sales. These “larger sites” saw 11.6% revenue growth, with especially strong gains among customers spending $50,000 or more monthly — a segment that grew sales 14.5% and expanded by 12.4% in site count. Revenue from large non-manufacturing customers jumped 30% year-over year.
Digital operations were another key driver. E-business sales increased 13.5% from a year ago, accounting for more than 30% of total revenue for the first time. Combined with Fastenal’s automated inventory management (FMI) programs, 61% of the company’s Q2 revenue came through digital channels—up from the mid-50% range two years ago.
“Our goal is to exit the year with 63% to 64% of revenue under our digital footprint,” said CEO Dan Florness.
Fastenal now has more than 132,000 FMI devices installed globally, up 11% year-over-year. While new device installations slowed slightly compared with last year’s pace, the company still expects to deploy 25,000 to 26,000 additional devices in 2025.
Fastenal also plans to relaunch its website later this year to better serve smaller customers, a segment that saw modest attrition, particularly among those spending less than $500 a month. Executives said the new digital platform aims to expand share across all customer tiers.
Amid growing tariff pressure and supply chain complexity, the company implemented three pricing actions in Q2. CFO Sheryl Lisowski said additional pricing steps are likely in the second half of the year.
“Despite the uncertainty, we did not detect any meaningful prebuying,” Lisowski said. “The sales performance was driven by self-help, not external tailwinds.”
Capital spending totaled $64.3 million, driven by FMI deployment, IT investment, and continued automation across Fastenal’s distribution network.
Looking ahead, executives expressed cautious optimism, noting that demand remains uncertain amid volatile trade policy. Still, the company believes its decentralized sales model, customer integration, and expanding digital capabilities position it well to gain market share.
“We’ve historically won during disruption,” Lisowski said. “That’s what we expect again in the current environment.”
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