A distributor of industrial and construction supplies, Fastenal stocks nuts, bolts, safety gear, and thousands of other products for manufacturers, with signature blue vending machines (FASTVend and FASTBin cousins) restocking customers' shelves automatically. Founded in 1967 in Winona, Minnesota, its name comes from its original staple: fasteners. The founders' first plan—selling via vending machines—flopped, so they opened a storefront beside Bob Kierlin's father's auto shop; decades later vending became central.
Q2 2026 revenue rose 12.4% to $2.20B while gross margin fell 0.5pt to 44.6% on mix and cost pressure
fell to 44.6%, its lowest in the reported quarterly series. rose 12.4% to $2,201.7M and rose 15.4% to $0.30 as contract sales growth and pricing offset the from larger-customer mix and higher costs. The business is growing but margin pressure from mix and tariffs remains unresolved.
Key takeaways
rose 12.4% to $2,201.7M in Q2 2026, up 8.6% from Q1 2026, driven by contract sales growth of 14.6% in Q1 and pricing of roughly 350 that carried into the quarter.
What changed
Q2 2026 was 44.6%, down 0.5pt from Q2 2025's 45.3% and the lowest in the reported quarterly series, as the Q1 2026 flag of margin pressure from fastener expansion benefits anniversaring and tariff replacement advancing was realized.
Section summaries
Management's Discussion and Analysis
Q2 2026 net sales rose 14.7% to $2,386.9M, driven by contract signings and pricing, while operating margin held at 21.0% as SG&A leverage offset gross margin pressure.
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increased 14.7% to $2,386.9M in Q2 2026, with daily sales up 14.7%, reflecting improved contract signings since Q1 2024, product pricing (+290 ), and modest industrial production gains.
growth accelerated to 12.4% from 8.6% in Q2 2025 and 8.7% in Q1 2026, continuing the fastener and contract-sales recovery flagged after Q1 2025.
rose 44.3% to $378.4M from Q1 2025 and 2.8% from Q1 2026, aided by optimization noted in Q1 2026, against the Q2 2025 flag of working-capital growth from tariff preparedness.
held at $100.0M, down 20.0% from Q2 2025, consistent with the FY2025 flag of reduced .
Full-year 2026 of $310–330M is up from $230.6M in 2025, the increase flagged in Q1 2026 as a free-cash-flow watch item.
What to watch
Q3 2026 against the 44.6% Q2 level as tariff replacement advances and fastener expansion benefits anniversary
2026 progression within the $310–330M range and its effect on after H1 outlay
Tariff impact in Q3–Q4 2026 as lower-tariff is depleted
Contract sales daily sales rate continuation after 14.6% Q1 growth
declined 75 to 44.6%, primarily due to unfavorable net price/cost (~40 bps), customer mix shift toward larger accounts, higher transportation costs, and increased customer rebates.
expenses improved 80 to 23.5% of sales, driven by on employee-related costs (-70 bps) and occupancy costs (-40 bps), partially offset by higher selling-related transportation and travel.
rose 15.1% to $501.8M, with flat at 21.0% as fully offset compression.
Net decreased 4.6% to $265.7M, pressured by higher from strong late-quarter sales growth, while remained modest at $60.5M (2.5% of sales).
The company returned $305.1M (79.7% of ) to shareholders via dividends and share repurchases, and expects full-year net of $310–$330M, up from $230.6M in 2025.
Quantitative and Qualitative Disclosures About Market Risk
Market risks from tariffs, commodities, FX, and rates were immaterial in H1 2026, but tariff exposure may grow as lower-cost inventory depletes.
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Tariffs and import shipping costs were immaterial in H1 2026, but the company warns impact may increase as lower-tariff is replaced with goods subject to new and expanded tariffs.
Commodity steel prices were higher , but the effect on was immaterial due to long supply chains and raw material being a small part of total product value.
Energy prices rose , yet direct fuel and costs had an immaterial impact because they represent a relatively small cost component.
Foreign currency exposure is primarily to the Canadian dollar and Mexican peso; the stronger dollar had an immaterial effect, and the company does not hedge FX risk.
Interest rate risk is limited: a hypothetical 1% increase in floating-rate debt would add only ~$0.5 in , and the company does not use swaps.
A description of our legal proceedings, if any, is contained in Note 8 of the Notes to Condensed Consolidated Financial Statements. The description of legal proceedings, if any, in Note 8 is incorporated herein by reference.
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A description of our legal proceedings, if any, is contained in Note 8 of the Notes to Condensed Consolidated Financial Statements. The description of legal proceedings, if any, in Note 8 is incorporated herein by reference.
There have been no material changes from the risk factors described in Part I, Item 1A, Risk Factors of our most recently filed annual report on Form 10-K.
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There have been no material changes from the risk factors described in Part I, Item 1A, Risk Factors of our most recently filed annual report on Form 10-K.