Mark Elwa
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Fastenal profit falls 1.1%

Fastenal reported is profit edged 1.1% lower in the first quarter of the year as its core fastener business weakened.

Results came in short of expectations and shares in the company, up 19% over the past three months, lost 4.1% premarket to $45.01.

In the first quarter, the company's fastener product line daily growth contracted 2%, while its non-fastener product-line daily growth improved to about 5%.

For the quarter ended March 31, Fastenal reported a profit of $126.3 million, down from $127.6 million a year earlier. Per-share earnings rose to 44 cents from 43 cents on a lower share count.

Sales climbed 3.5% to $986.7 million.

Analysts polled by Thomson Reuters were looking for 45 cents a share on $989 million in revenue.

Gross margin shrank to 49.8% from 50.8%, drained by unfavorable customer and product mixes.

Fastenal, which has been contracting its store base over the past several years, said Tuesday it plans to open 40 to 60 new stores in 2016, an increase of about 2%. The company opened 17 new stores in the first quarter. It closed or consolidated 12 stores, but said most were in multiple store markets with expiring leases and didn't meaningfully impact sales.