Fastenal misses estimates amid sluggish demand for industrial safety products

(Reuters) – Fastenal (NASDAQ:FAST) posted fourth-quarter profit below analysts’ estimates on Friday, as a sustained slowdown in construction sector dented demand for its fasteners and other safety products.

Shares of the Winona, Minnesota-based company fell 5.7% in premarket trading.

U.S. construction activity has slowed due to increased financing costs for big projects amid higher interest rates, hurting demand for industrial supplies.

“Slow rate of growth was exacerbated by many of our largest customers enacting unusually sharp production cuts in the last two weeks of December during holiday-related plant shutdowns,” Fastenal said.

Sales of fasteners, one of the core segments of the wholesale distributor, fell to 29.9% of the company’s total sales, compared with 31.1% a year earlier.

Fastenal posted a profit of 46 cents per share in the fourth quarter, while analysts on average had expected 48 cents, as per data compiled by LSEG.

Its total revenue for the quarter rose 3.7% from a year earlier to about $1.82 billion, but missed estimates of $1.84 billion.