Nuts and bolts distributor Fastenal Co. on Thursday reported a quarterly profit that beat market expectations by a penny, on a rebound in daily sales growth.

Shares of the company were up $3.65, or about 9 percent, at $45.89 in late morning trade on the Nasdaq. Earlier in the session, the shares touched a new year-high of $46.49.

Daily sales, defined as sales for the month divided by the number of business days in the month, improved in June, relative to April and May, the Winona, Minnesota-based company said in a statement.

We believe there is potential upside as the company transitions its business model, sustaining and accelerating growth while leveraging fixed costs, which should drive significantly higher margins and returns, Robert W. Baird & Co. analyst Daniel Leben said in a note to his clients.

Fastenal continues to actively drive sales and manage costs through initiatives like a new freight model, working capital model, including adding more stocking space and sales personnel at its existing stores, Leben said.

He has an outperform rating on the stock.

The company earned $60.3 million, or 40 cents a share, on net sales of $519.7 million for the second quarter, compared with earnings of $51.5 million, or 34 cents a share, on net sales of $458.8 million a year-ago.

Fastenal, however, said rising fuel costs hurt the latter part of the second quarter.

(Reporting by Swagata Gupta, Sunil Mathew Paul in Bangalore)