This Industrial Giant Expects Inflation to Be Sticky
Fastenal signals that rising costs and labor shortages will continue to make the reopening environment tricky to navigate.
Cost pressures and worker issues beat pandemic peril.
Photographer: Luke Sharrett/Bloomberg
The key question heading into this industrial earnings season was whether some combination of the delta variant of Covid-19, rising costs and supply chain crunches would derail the burgeoning manufacturing recovery. So far, the answer seems to be no. But that doesn’t mean the reopening environment is easy to navigate.
Fastenal Co., a $31 billion distributor of factory floor odds and ends, unofficially kicked things off on Tuesday. The company’s quarterly numbers and commentary typically offer useful insights for what’s to come when its manufacturing customers report their results later this month. The results were strong overall: second-quarter sales were about as good as analysts had expected as a snapback in demand from manufacturing and construction customers nearly offset a tough comparison with last year’s unsustainable surge in purchases of face masks and other protective gear. Fastenal’s net sales were up 10% compared with those in 2019.