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**【CEO Summary Section】**
- **Revenue Growth**: Q3 net sales of $2.13 billion, up 11.7% YoY, driven by double-digit growth in fasteners and national accounts. Daily sales growth of 11.2% outpaced historical benchmarks.
- **Market Share Expansion**: Gained 8.1% in active customer sites spending over $10,000/month and 15.4% in on-site locations. New contracts with major manufacturers and expansion into non-traditional markets (e.g., healthcare, logistics) contributed to resilience.
- **Fastener Expansion Project**: Invested in inventory to improve availability, resulting in 15%+ fastener sales growth and margin improvement. This initiative is a key driver of gross margin expansion.
- **Digital Growth**: 45.3% of sales through FMI technology (up from 43% YoY), with daily FMI sales growing 18% YoY. E-commerce sales grew 8%, with plans to relaunch fastenal.com in 2026.

**【CFO Financial Commentary】**
- **Profitability**: Operating margin of 20.7% (up 40bps YoY), net income of $386.9M, and EPS of $0.29 (up 12.3% YoY). Gross margin improved to 45.3% due to fastener expansion and supplier initiatives.
- **Cost Management**: SG&A at 24.6% of sales, with higher employee-related expenses offset by leverage in other costs. Inventory grew 10.5% to support customer growth and tariff mitigation.
- **Cash Flow**: Generated $386.9M in operating cash (115.3% of net income), with a conservative capital structure (debt 4.8% of total capital).

**【Q&A Highlights】**
- **Pricing Dynamics**: Q3 pricing contributed 240-270bps to growth, below initial 3-5% target due to delayed actions to align with customer needs. Q4 pricing range revised to 3.5-5.5% YoY, reflecting tariff uncertainty.
- **Gross Margin Outlook**: 2025 gross margin expected to be flat YoY, with potential Q4 margin squeeze from rising costs. Fastener expansion project offsets price/cost pressures.
- **Customer Behavior**: Sluggish industrial demand (PMI 48.6) but steady share gains through technology adoption (e.g., FMI devices) and on-site solutions. Customers delaying capital spending but maintaining operational efficiency.
- **Inventory Strategy**: Added inventory to improve availability and hedge against tariffs, with 2025 capex guidance of $235-255M for FMI devices, hubs, and automation.

Fastenal Company (FAST) Q3 2025 Earnings Call Transcript

Revenue

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FAST

FAST fundamentals

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