Dave Manthey

Max explained the remaining 40bps net price-cost drag is roughly 3-4 points of incremental margin; expects mid-20s incrementals as it normalizes.

Watts affirmed continuity of the three strategic pillars while emphasizing AI tools speeding new-business onboarding and global expansion.

Max committed to improving Q2 sequential pricing trajectory vs Q1. Confirmed the 5-8% cumulative pricing estimate is unchanged. Dan acknowledged over-answering in January and underestimating the difficulty of pushing pricing through Q1, describing it as a slog.

Dan said teams have good capacity built in with role specificity and reloaded part-time ranks post-COVID. Jeff added technology and solutions make the historical revenue-to-headcount correlation obsolete. Max confirmed Q1 SG&A leverage trajectory should continue.

Dan explained rebates came in lower than estimated. Notably, year-end supplier deals were completely absent. Dan's read was suppliers hit their numbers and kept gunpowder dry for next year rather than being too far from targets. Max quantified: the 50bps YoY drop was split between rebate true-up (the bigger portion) and inventory timing cost flows, both expected to completely normalize.

Dan firmly stated this is not guidance but momentum-based thinking. He declined to get specific on pricing expectations, citing a history of being wrong. Emphasized alignment of the sales team and confidence in execution capabilities. Shared an anecdote about a saved email from Casey Miller about weather killing January 2025 results to contrast with better momentum entering 2026.

Dan explained a deliberate 30-day delay allowed better customer discussions and more effective substitution options. The lower cadence means more substitutions in place, which is frankly a good thing.

Dan admitted uncertainty on whether peak pricing gets pushed to 2026. An economist briefed their board recently suggesting things may calm. The optimist view: year-end pricing may be the plateau.

Dan explained 10K+ customers have similar gross margin to company average but better SG&A leverage from rationalized branch network. 10K+ group is almost 80% of sales so it naturally reflects the company profile.

Dan clarified the fastener expansion is already paying off through revenue, margin, and freed-up field time. In H2 and 2026, some rationalization of distribution inventory will further improve returns on the investment.

Dan confirmed contracts allow price adjustments. Key issue is optionality: moving steel-based product out of China avoids layered duties. For every dollar customers spend with Fastenal, they spend ten elsewhere.

Dan explained Fastenal built tariff management capabilities in 2018, can give granular visibility to customers, and diverted 35-40 containers from East to West Coast proactively.

Dan said they have identified potential for 58 Onsites per DM on average versus current 7-8. He sees incredible opportunity to grow in the next decade through supply chain partnership.

Jackson directly disputed the published multifamily data, caveated that BFS only plays in five-story-and-below wood structures, and said peers agree with him.

Beckmann separated productivity savings from cost actions and Jackson clarified the incremental cuts are predominantly fixed SG&A starting in July.

CEO described bifurcation: affluent buyers strong, bottom-end starter homes getting simpler and smaller. Stability to improvement would likely reaccelerate content per home. Townhouse trend continuing.

CEO said preliminary pilot last year, now dialing in for scale. Another rollout planned for later 2026 to prove new training regime. Broader acceleration expected in 2027. Process going well but slow.

CEO confirmed aggressive ramp required, underappreciated how dramatically big builders slowed at 2025 year-end. On track to hit numbers but needs steep Q1 ramp.

CEO explained disciplined operators have gotten back to fundamentals in slower period. Consolidations maintained OTIF and customer satisfaction. No catch-up items expected.

CFO explained contribution varies based on margin direction. CEO confirmed mid- to high teens as secular contribution margin, not intending to change prior messaging.

CFO listed acquisition lapping, inflation on costs, productivity (muted by ERP focus), and lower jump-off point for 2025. CEO emphasized ongoing technology transformation investment.

CEO highlighted multifamily projects on the cusp that 50bps would help, plus consumer sentiment benefits. But unlikely to help 2025 meaningfully.

CFO cited weakening SF starts, residual multifamily normalization, and softer commodity environment as main Q2-to-Q3 revenue bridge drivers.

CEO candidly acknowledged slower-than-expected pace, described December adoption reset. Still confident in $1B target but timing uncertain until 2025 results prove out.

CEO contrasted last year's optimism with current uncertainty around tariffs, immigration, and housing policy. Wider band reflects unknowns, not weaker fundamentals.

CFO said back-half refunds will be fairly immaterial and were hard to estimate quarterly; most were booked in Q2.

CFO directly stated approximately five points of price in North America. Brief and clear response.

CFO explained margin trajectory shifting to U-shape due to Q1 outperformance, private label cost timing, and fuel headwinds. Thorough answer.

DG explained conservative planning philosophy; January strong across the board with some Japan competitive outage tailwind. Confident in 7.5% for the year.

DG said ePro now closest to 40% share, up meaningfully; vast majority of contract customers have ePro and KeepStock combination.

DG clarified September and November pricing actions are both High-Touch related; Zoro had strategic pricing changes throughout year.

Dee confirmed total U.K. exit impact is about $40 million in Q4 revenue across Cromwell and Zoro U.K.

Dee confirmed outlook would not include LIFO drag; underlying operations similar. On implied FIFO basis, EPS would have been up north of 6%.

Dee expects gross margin improvement from Q3 to Q4 as September pricing takes hold, helping year-end operating earnings.

Dee confirmed tariff-driven pricing at higher contribution margins could achieve 20% incremental at lower growth rate.

Dee confirmed Zoro leverage is mostly sustainable from improving repeat rates, not just volume surprise.

DG confirmed north of 20% incremental margins on unexpected volume upside.

CEO framed M&A around tuck-ins and core adjacencies with strategic/cultural/financial fit but declined specifics.

CEO pointed to building materials and chemicals plus network scale as share-gain levers but gave no quantification.

Hart confirmed the 60-80% leverage ratio is the long-term target but 2026 will run below that due to incentive compensation reload of approximately $15 million at low single-digit growth. Arvan added that greenfield absorption and slowed new investment should benefit the back half.

Arvan attributed chemical strength to private label dealer conversions happening pre-season, particularly on the retail side, paired with technology tools and water testing apps. California benefited from atypically warm weather. Cautioned against drawing large conclusions from Q1 given its small scale.

Hart confirmed incentive comp is a sliding scale. With flat sales, no change to incentive comp year-over-year. Arvan added they would take other cost actions if the market lags.

Arvan cited supply chain execution, pricing optimization, renovation mix improvement, and exclusive brands as upside levers. Competitive pressures and chemical deflation as headwinds, but not expected to differ materially from 2025.

Arvan explained trichlor deflation is in the sanitizer category only. Balancers and specialty products holding up. Building materials seeing slight inflation. Equipment vendor pricing consistent with recent years.

Hart confirmed the leverage model stays intact. Incentive comp and volume-related variable expenses like drivers and warehouse staff would come back, but professional staffing and sales center managers already maintained.

Arvan explained that despite positive near-term trends, permit data does not support a back-half construction rebound, driving the modest guidance reduction.

Arvan emphasized housing turnover as the key demand driver rather than direct rate impact on pool financing. Home equity access through transactions is the primary catalyst.

Arvan explained Horizon focus remains Sunbelt, with limited capital needs. Expansion will follow new home construction recovery.

Arvan confirmed good 2024 weather creates a slightly tougher comp but noted it's incorporated into guidance.

Bill guided similar or slightly higher SG&A growth with continued operating leverage for the year.

Bill walked through operating-margin progression (~30-50bps this year), flagged an outsized mid-year gross-margin gain that has now normalized, and deferred 2026 specifics to February.

Kevin did not put a number on the cross-sell rate but described early engagement across multiple nonresidential customer groups as the new way of working.

Management described the 410A-to-A2L refrigerant transition lifting equipment pricing, offset by a repair-over-replace mix, netting low-single-digit HVAC inflation.

Bill confirmed the temporary timing benefit and expects gross margin to revert to the normalized 30%-31% range as it wanes through the back half.

Brundage attributed most of the raise to Q3 flow-through plus earlier-than-expected deflation moderation, strong gross margins and streamlining, not a materially more optimistic Q4.

Murphy said the A2L conversion is largely complete with some 410A left through mid-Q4; Brundage put HVAC price inflation at low single digits, so growth is volume-led.

CFO confirmed mid-single-digit opex growth (3% volume plus investment and wage/infrastructure inflation) and expects back-half revenue acceleration to improve SG&A leverage.

CFO confirmed one fewer selling day in Q3 (likely February, versus last year's leap day) but could not specify the month and said nothing unusual affects the SG&A progression.

CFO framed contribution in basis points (70 bps from Q1 deals, 30 bps from Q2) rather than a dollar run rate, noting one recent deal was already consolidated.

CEO acknowledged ES weakness was more self-inflicted (pricing too aggressive) in H2 2025 but now more market-driven. Petrochemical and biotech verticals slower, other verticals improving.

CEO described full mix of recurring integrated plant waste contracts and event-driven remediation projects ranging from 2 weeks to 8-9 months in duration.

Jon acknowledged the team had to recalibrate as competitors got more aggressive on price, with pipeline improvements expected to surface in H2 and into 2027.

Brian attributed flat subcontractor costs to strong procurement renegotiations, normalizing after the post-pandemic reset.

Jon described diversified end markets with manufacturing as the largest segment including chemicals, oil and gas, and general production, plus utilities and government.

Brian described sequential improvement with September better than August and October tracking similarly, but a tough Q4 comp from a $50M emergency response job.

Brian clarified Q3 2024 had $20M of non-recurring benefits: $15M insurance recovery and $5M bad debt recovery, creating a 40bps tough comp.

Jon noted fewer emergency response events and manufacturers pausing discretionary cleanups due to tariff/macro uncertainty, though pipeline remains healthy.