Fastenal Company

Fastenal is turning share gains into profit again: sales growth accelerated through 2026 while headcount barely moved, so operating margin is finally expanding. The bet is that this overhead leverage keeps outrunning a gross margin that shrinks by design. What would Fastenal's operating margin be if price and cost were level?

• Growth now comes from winning accounts, not from the market.

  Sites spending $50,000+ a month with Fastenal grew 19% in Q3, and sales to them rose 28%. Those deeper relationships explain how daily sales grew double digits while the industrial market only steadied. How much of Fastenal's growth comes from data center work?

• Profit is growing faster than sales on almost no new headcount.

  SG&A fell to 23.5% of sales from 24.4% a year earlier while headcount grew under 1%. Management calls the gain structural — better quoting tools, work moved to where it belongs — so more of each extra sales dollar reaches profit.

• Gross margin shrinks by design, and Q3 got one-time help.

  Bigger customers carry thinner markups, a drag of roughly half a point a year, and price is still about a third of a point behind cost. Half of Q3's gross-margin help was timing that will not repeat, so the gain rests on overhead.