Fastenal Company Earnings Call Nuggets: Seasonal Details and Vending Contracts
Fastenal Company (NASDAQ:FAST) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.
Ryan Merkel – William Blair: So I want to start with March. It looks like the seasonal lift was little less than usual. I’m just wondering how much of that was macro and then how much do you estimate that Good Friday hurt, if at all?
Willard D. Oberton – CEO: Ryan, we look at Good Friday as probably – it’s more than a half a day. So, if you say it’s 60% we would have lost about $5 million which would be 2 percentage points. I haven’t looked at it that way, but I mean that’s what the math would be. It was a slow finish, Good Friday was. But it was also a slow month.
Ryan Merkel – William Blair: Then on gross margin, I guess a two-part question. Where do you think margins can go once the other third of stores have the price guidance (system)? Secondly, do you think that better price discipline has impacted sales at all?
Willard D. Oberton – CEO: To answer the first part, all of the stores have the price guidance. So, we just haven’t deployed it to all customer groups. So, just it might be clear on that. Where the margin can go, we’re not sure. We’re not going to speculate on the margin. We believe there’s still upside improvement. And the second question, do we think it’s affecting sales? No, we really – and Lee is here too, I’ll let him jump in, but I have heard no anecdotal – any stories about losing business because of price guidance. Could there be some? Of course, but that’s not what we’re hearing back.
Leland J. Hein – President: Yeah, I would only add, Ryan, that it would only be true if the system was so rigid that we (didn’t opt) for the flexibility of our folks to look at in order and take it if it makes sense to our business. And that is again a culture – a piece of the culture within our Company that we’ve always been flexible to the point to be wise and take orders when it makes sense.