Fastenal's stock flies, but an earnings beat comes with a warning about demand trends

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CFO Lewis said feedback from regions point to ‘sluggish demand’ and cautious outlook for spending

Shares of Fastenal Co. powered higher Thursday toward the best levels seen in 18 months, after the fasteners and tools and janitorial supplies company beat third-quarter profit expectations, with daily sales rates breaking records in the past month.

The stock FAST, +6.25% shot up 6.6% in afternoon trading, enough to make it the biggest gainer among S&P 500 index SPX components, and to put it on track for the biggest one-day gain since it rallied 6.9% on March 26, 2020. It was also headed for the highest close since April 6, 2022. But as Chief Financial Officer Holden Lewis explained on the call, while he was “encouraged” by the September DSR strength, it seemed to have more to do with easing comparisons in certain businesses than a clear signal of firming customer demand or brightening outlooks.

The difference in performance between its product lines, which includes fasteners, safety supplies and other products, such as tools, janitorial supplies and cutting tools, also warns of slowing of the manufacturing economy.

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Fastenal stock moves up after it beats earnings estimate by 2 cents a shareSteve Gelsi covers banking and cannabis as a Senior Reporter for MarketWatch.
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