Al Root

Industrial distributor Fastenal reported solid first-quarter results. Investors, however, aren't worried about the first quarter; they want to know what comes next as President Donald Trump's global trade war heats up.

The first quarter represents the calm before the storm. The company, however, did raise prices in April to offset tariff cost increases.

Fastenal reported first-quarter earnings per share of 52 cents from sales of just under $2 billion Friday morning, right in line with what Wall Street was looking for. A year ago, Fastenal reported EPS of 52 cents from sales of $1.9 billion.

Shares were flat in premarket trading at $75.77, while S&P 500 and Dow Jones Industrial Average futures were up 0.2% and 0.1%, respectively. Coming into Friday trading, Fastenal stock was up about 5% year to date.

Distributor results provide a close to real-time look at the health of the manufacturing economy. They sell thousands of products to thousands of customers every day.

Things are improving. Daily sales, a metric the company always reports, rose 5% year over year. Selling rates picked up through the quarter, with March sales up 8.3% year over year. Daily sales grew 1.9% year over year in the first quarter of 2024. Sales of fasteners grew 1.1%, improving from down 4.4% in the first quarter of 2024. Fastenal also announced a 44-cent quarterly dividend, up a penny from the amount announced in January.

Operating profit margins, however, declined by 0.5 percentage point.

Prices went up in April to help address cost increases. "Price contribution to growth could be 3% to 4% in second-quarter 2025 with potential to be higher in second half 2025 as a result," reads part of Fastenal earnings releases. "We expect to take further appropriate price actions should the reciprocal tariffs announced in April ultimately come into effect."

While the quarter was solid, investors will want to hear more about tariff impacts on costs, pricing, demand, and the supply chain. Some tariffs on steel and aluminum are in place, but many other significant tariffs were not yet implemented in the first quarter. On Wednesday, President Trump paused implementing tariffs on many countries for 90 days.

It is hard to say exactly what will happen next. Investors will look for additional guidance from management when executives speak on their conference call at 10 a.m. Eastern time.

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

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 11, 2025 07:35 ET (11:35 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.