Fastenal

Pricing power is solid but bounded by category commoditization and customer mix. Management estimated 170 to 200 basis points of 2025 sales growth came from pricing tied to tariff pass-throughs, indicating leveragable but situational pricing.

Gross margin held near 45.0% despite adverse mix from large contract and Onsite customers which typically carry lower margins. Over a cycle, we expect Fastenal to defend margins through value-in-use, private labels, and process savings rather than pure price increases.

The latent lever exists in service intensity and analytics (FAST360), not list-price hikes. Risks: deflation, procurement software competition, and increased bargaining power at large accounts.