Net sales increased $123.6, or 10.4%, in the first quarter of 2019 when compared to the first quarter of 2018. Due to the one fewer selling day in the current period, our daily sales increased 12.2% in the first quarter of 2019 when compared to the first quarter of 2018. This increase was driven by higher unit sales related primarily to continued strength in underlying market demand and contribution from our growth drivers, most notably industrial vending, Onsite locations, and construction. A lesser contributor to our sales growth in the first quarter of 2019 was higher product pricing as a result of increases implemented over the course of 2018 to mitigate the impacts of general and tariff-related inflation in the marketplace. These positive factors were slightly offset by adverse weather across many of our northern regions in both periods that created temporary disruptions in activity and reduced sales. Sales of our fastener products grew 11.8% on a daily basis over the first quarter of 2018 and represented 34.8% of sales in the first quarter of 2019. Sales of our non-fastener products grew 12.7% on a daily basis over the first quarter of 2018 and represented 65.2% of sales in the first quarter of 2019.
Our gross profit, as a percentage of net sales, declined 100 basis points to 47.7% in the first quarter of 2019 from 48.7% in the first quarter of 2018. The most significant factors behind the decline in our gross profit percentage in the period were the impacts of customer and product mix and net inflation on product margins, higher freight costs, and lower net rebates reflecting our inventory control programs. Relative to the fourth quarter of 2018, our first quarter of 2019 gross profit percentage was flat with lower freight costs offset by lower net rebates.
Our operating income, as a percentage of net sales, improved to 20.0% in the first quarter of 2019 from 19.8% in the first quarter of 2018. Our operating and administrative expenses (including the (gain) loss on sales of property and equipment), as a percentage of net sales, improved to 27.8% in the first quarter of 2019 compared to 28.9% in the first quarter of 2018. The primary reason for this improvement was our ability to leverage employee-related and occupancy-related expenses.
Employee-related expenses, which represent 65% to 70% of total operating and administrative expenses, increased 7.1% in the first quarter of 2019 when compared to the first quarter of 2018. The increase in employee-related expenses was mainly related to: (1) an increase of 6.2% in our full-time equivalent ('FTE') headcount, (2) moderate increases in hourly base wages, (3) higher bonuses and commissions due to growth in net sales and net earnings, and (4) higher profit sharing expense. Occupancy-related expenses, which represent 15% to 20% of total operating and administrative expenses, increased 2.3%. This was primarily due to an increase of 10.9% in expenses related to industrial vending equipment, as facility costs were essentially flat, with an increase in non-branch occupancy expenses being mostly offset by a decline in branch occupancy expenses. All other operating and administrative expenses, which represent 15% to 20% of total operating and administrative expenses, increased 4.9%. This was primarily due to (1) higher spending on information technology and (2) higher expenses related to legal settlements and a bad debt write-off. Selling-related transportation costs were roughly flat year over year.
Our net interest expense was $3.9 in the first quarter of 2019 compared to $2.7 in the first quarter of 2018. This increase was mainly caused by a higher average debt balance during the period and higher average interest rates.
We recorded income tax expense of $63.4 in the first quarter of 2019, or 24.6% of earnings before income taxes. Income tax expense was $57.6 in the first quarter of 2018, or 24.8% of earnings before income taxes. We continue to believe our ongoing tax rate, absent any discrete tax items, will be in the 24.5% to 25.0% range.
Our net earnings during the first quarter of 2019 were $194.1, an increase of 11.4% when compared to the first quarter of 2018. Our diluted net earnings per share were $0.68 during the first quarter of 2019 compared to $0.61 during the first quarter of 2018, an increase of 11.9%.
Fastenal Company Reports 2019 First Quarter Earnings | Fastenal Company
