FAST · Q1 2026 Earnings

Bullish

Fastenal

Reported April 13, 2026

30-second summary

Q1 revenue grew 12.4% YoY to $2.20B with gross margin at 44.6% and operating margin at 20.3% (+20bps YoY), landing the double-digit FY26 call cleanly on the first datapoint while management candidly acknowledged tariff-related costs flowed through the P&L roughly 40bps short of management's own internal Q1 gross margin target, with a 50bps YoY price-cost headwind. The $50K+ customer site count reached 2,909 (+16.3% YoY from 2,502), Digital Footprint penetration was 61.5% (+50bps YoY from 61.0%), and FMI weighted signings of 6,950 MEU put the company on pace for the raised 28,000-30,000 FY target. The story is no longer "will the double-digit guide be credible" — Q1 answered that — it is now whether mid-year price-cost neutrality is achievable as tariff costs continue to step through inventory.

Headline numbers

EPS

Q1 FY2026

$0.30

Revenue

Q1 FY2026

$2.20B

+12.4% YoY

Gross margin

Q1 FY2026

44.6%

Free cash flow

Q1 FY2026

$0.32B

Operating margin

Q1 FY2026

20.3%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$2.20B	+12.4%	$2.03B	+8.6%
EPS	$0.30	—	$0.26	+15.4%
Gross margin	44.6%	—	44.3%	+30bps
Operating margin	20.3%	—	19.0%	+130bps
Free cash flow	$0.32B	—	—	—

Guidance

Company reaffirms full-year guidance; Q1 delivers 12.4% YoY revenue growth in-line with double-digit expectations, with FASTBin/FASTVend signings on pace for 28k–30k annual target.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Net sales growth	Q1 FY2026	double-digit	12.4%	in-line (12.4% YoY growth meets double-digit expectation)	Beat

New guidance

Metric	Period	Guide	YoY
Capital expenditures (net)	FY 2026	$310.0 to $330.0 million	—
Income tax rate	FY 2026	approximately 24.6%	—
National account contract signings	FY 2026	approximately 250 new signings	—

Reaffirmed unchanged this quarter: Weighted FASTBin and FASTVend device signings (MEUs) (28,000 to 30,000)

Segment KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
Direct Materials	$0.855B	+13.1%
Indirect Materials	$1.346B	+12.4%
Heavy Manufacturing	$0.966B	+14.1%
Other Manufacturing	$0.709B	+9.9%
Non-residential Construction	$0.181B	+17.2%
Other End Markets	$0.344B	+11.3%
Contract Sales	$1.66B	+14.6%
Non-Contract Sales	$0.542B	+6.7%

Other KPIs

Q1 FY2026

Segment	Q1 FY2026
Digital Footprint Sales	$1,371.8 million
Digital Footprint % of Sales	61.5%
FMI Sales	$1,001.4 million
FMI % of Sales	44.9%
Weighted FASTBin/FASTVend Installations (MEUs)	137,702
Weighted FASTBin/FASTVend Signings (MEUs)	6,950
Customer Sites $50k+/Mo	2,909
Operating Cash Flow as % of Net Income	111.4%

Management tone

Q1 FY2026 brought the first explicit, quantified acknowledgment of execution shortfall in the pricing algorithm. From the CFO's prepared remarks on the call: "Tariff-related costs moved through the P&L faster than our pricing, leaving us … approximately 40 basis points short of our own targets." This is a specific basis-point gap to internal Q1 gross margin targets, not to external commitments — management is willing to absorb candor about near-term margin pressure to preserve credibility on the longer-term share-gain story.

The macro framing inverted. Q1 FY2026 commentary cites three consecutive months of PMI above 50 and frames the FY outlook as "positive" — "that generally gives us confidence of what we're going to be seeing three and four months out." Notably, the 12.4% Q1 print itself was credited to internal execution ("we really didn't see much of a tailwind"), so the macro positivity is being saved as a forward kicker rather than a current explanation.

The construction narrative completed a full reversal. Per Florness, non-res construction was negative mid-single digits in 2023-2024, grew about 4% across 2025, exited 2025 growing nearly 10%, and printed +17.2% in Q1 FY2026. Management explicitly called the magnitude of the swing in the prepared remarks, and the cohort is now meaningful enough to be a category driver rather than a category drag. For the model, this means the non-manufacturing book — historically the weak side of the ledger — is now contributing to the upside.

Digital was reinforced as a primary growth engine, with the company citing 13.6% daily-sales growth in Digital Footprint outpacing the company average and FMI driving 44.9% of sales (+160bps YoY). Digital Footprint penetration at 61.5% advanced 50bps YoY from 61.0%.

Recurring themes management leaned on this quarter:

Market stabilization after prolonged PMI sub-50 periodDigital and FMI technology as growth acceleratorsLarge customer account strategy outperforming via 50K+ sitesPricing discipline challenged by tariff volatility but commitment to price-cost neutralityInternational expansion accelerating (24% growth in March)Construction and non-manufacturing segment turnaround

Risks management surfaced:

Tariff uncertainty delaying customer pricing conversations and decision-makingBranded supplier cost increases (6-8%) outpacing Fastenal's pricing actionsGross margin pressure from customer mix skewing toward larger, lower-margin accountsCommodity inflation (nitrogloves cost 'through the roof' due to Middle East developments)Broader macro environment remains 'uneven and in some areas uncertain'

Q&A highlights

David Banthe · Baird

Will pricing gains continue at 20 bps or less sequentially, and is the 5-8% peak pricing target still valid? When will price-cost neutrality be achieved?

Management stated pricing actions will continue but at a slower pace than Q1. They reaffirmed the 5-8% cumulative pricing estimate and expect plateau around mid-year. Price-cost neutrality timing remains uncertain but is being actively pursued. Management acknowledged over-communicating in January and underestimating Q1 execution difficulty.

5-8% is cumulative, not quarter-over-quarterPricing plateau expected around mid-yearQ1 traction was slower than desiredPart-time headcount has been reloaded after COVID hollowing

Chris Snyder · Morgan Stanley

Why is price-cost management more difficult now versus prior inflation cycles? Is it tariff uncertainty causing execution challenges? Will Q2 be worse before getting better?

Management explained that struggles are primarily in branded products (safety, cutting tools) rather than fasteners, where visibility is greater. Fastener business has strong margins due to 4-month inventory visibility allowing price discussions. Q2 will be challenging, with pricing changes phased in through May/June from discussions dating back to December. Q3-Q4 outlook is more positive.

Fastener margins performing well despite branded product challengesFastener inventory provides 4-month visibility for pricingQ1 was challenging but anticipatedMultiple pricing effective dates: March 1, April 1, May 1, June 1

Stephen Volkman · Jefferies

Is growth accelerating across end markets? Should we expect growth acceleration to continue given tougher Q2 comps?

Management expressed cautious optimism on growth continuation, noting April data showing continued market expansion. Mid-60s percentage of locations growing is healthy. Emphasized sequential revenue patterns are strong, with customer acquisition at rapid pace while maintaining/growing wallet share. Flagged Q2 pricing comps will create headwind on year-over-year growth rates despite underlying share gains.

Mid-60s percentage of locations growing consistently since last fallApril numbers showing continued market expansionStrong customer acquisition with simultaneous wallet share growthPricing started in Q2 of prior year creates comp headwind

Ryan Merkel · William Blair

What is being done to fix the slower-than-expected pricing issue? Are suppliers continuing to push pricing and should we expect higher inflation from oil prices?

Management described divisive approach with analytics team (Kevin Fitzgerald) quantifying specific pricing outcomes by region. Acknowledged unique pricing environment with suppliers pushing aggressively, particularly in petroleum-based products like nitrile gloves. Emphasized need for push-back decisions on suppliers based on cost component analysis and legitimacy assessment.

Kevin Fitzgerald leading analytics efforts on pricing outcomesRegional flexibility identified for pricing executionNitrile glove prices volatile due to petroleum content99% of typical annual supplier increases occur by Q1

Nigel Coe · Wolf Research

How do changes to IEPA, Section 122, and Section 232 tariffs impact Fastenal? Has inventory cost headwind passed through the P&L?

IEPA represents small portion of tariff landscape, largely replaced by Section 122 with minimal P&L impact. Section 232 unchanged and not impactful. Tariff uncertainty creates 'slog' in pricing negotiations but headline impacts are smaller than perceived. Inventory cost headwind roughly 50% complete, with full flow-through expected by mid-year.

IEPA is small portion of total tariff exposureSupreme Court ruling creates education/negotiation delaysSection 232 has no recent changes and no impactInventory cost headwind will complete by mid-year

Answers to last quarter's watch list

Q1 FY2026 revenue versus the double-digit FY guide. Q1 delivered +12.4% YoY revenue growth, inside the double-digit FY band. The momentum claim is intact and arguably strengthened. Status: Resolved positively

$50K+ customer site count trajectory. Q1 came in at 2,909, +16.3% YoY from 2,502 per the transcript, with average monthly sales per site rising $5,700. The embedded-customer flywheel thesis is intact. Status: Resolved positively

FMI weighted signings tracking to a ~7,000-7,500 quarterly run rate. Q1 weighted signings of 6,950 MEU sit just below the implied quarterly run rate needed for the FY 28,000-30,000 target. Tracking to the lower bound, not the midpoint — credible but not yet validated for the upper band. Status: Continue monitoring

Q1 FY2026 gross margin trajectory. Q1 came in at 44.6%, down 50bps YoY from 45.1% in Q1 FY2025, and 40bps below management's own internal Q1 target due to tariff cost flow exceeding pricing pace. The FY gross margin trajectory remains under pressure with explicit basis-point acknowledgment from management. Status: Continue monitoring

CapEx pacing through 1H FY2026. The FY $310-330M envelope was reaffirmed; Q1 net capex of $57.6M is a modest start versus the FY range. Intra-year pacing detail beyond the reaffirmation was limited. Status: Continue monitoring

What to watch into next quarter

Whether gross margin advances toward 45% or holds in the 44.5-44.6% area. Management telegraphed pricing actions phased through March-June effective dates targeting mid-year price-cost neutrality; Q2 FY2026 is the cleanest test of whether the algorithm catches up or whether the 40bps gap to internal target widens.

Q2 FY2026 revenue YoY growth against a tougher pricing comp. Per the CFO, the company began pricing actions in Q2 FY2025, so the YoY pricing contribution will narrow; anything below ~10% YoY would suggest the underlying share-gain pace is decelerating once the comp tightens.

Whether FMI weighted signings in Q2 FY2026 step up to the 7,500+ quarterly pace. Q1's 6,950 is at the lower-bound trajectory for the 28,000-30,000 FY target; a Q2 print at or below this pace makes the upper bound of the FY band increasingly unreachable.

Whether the $50K+ site count crosses 3,000. Q1 reached 2,909; a similar-magnitude sequential addition would push the metric past 3,000 and confirm the flywheel is compounding.

National account contract signings cadence against the ~250 FY target. Newly disclosed metric — Q2 FY2026 should provide a year-to-date count that pegs the cadence required for the remaining three quarters.

Digital Footprint % of sales sustaining YoY expansion. Q1 FY2026 advanced 50bps YoY to 61.5% from 61.0%; whether Q2 FY2026 sustains a similar pace of YoY expansion will indicate whether digital penetration is still compounding.

Sources

Fastenal Q1 FY2026 earnings release, filed with SEC on April 13, 2026: https://www.sec.gov/Archives/edgar/data/815556/000081555626000019/ex_99103312026earningsrele.htm

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