Consolidated Results - Net sales remained unchanged at $1,179.4 million, with a 0.7% organic sales decline offset by a 0.7% favorable currency translation[10] - Gross profit was $595.5 million, representing a gross margin of 50.5%, a decrease of 10 bps from the previous year's 50.6%[10] - Operating earnings were $327.3 million, resulting in an operating margin of 25.5%, a decrease from 27.4% in the prior year[10] - Diluted EPS decreased by 6.9% to $4.72[10] Segment Performance - **Commercial & Industrial:** Sales decreased by 6.5% to $347.8 million, with a 7.6% organic sales decline[11] - **Snap-on Tools:** Sales increased by 1.9% to $491.0 million, driven by a 1.6% organic sales increase[12] - **Repair Systems & Information:** Sales increased by 3.0% to $468.6 million, with a 2.3% organic sales gain[13] - **Financial Services:** Revenue increased by 1.2% to $101.7 million, while operating earnings decreased by 2.8%[14] Financial Position - Gross finance portfolio totaled $2,540.8 million[15] - Net debt was $(254.6) million, resulting in a net debt to capital ratio of (4.7)%[17] Cash Flow - Net cash provided by operating activities was $237.2 million[16] - Free cash flow was $191.1 million[16]

Q2 2025 Earnings Release Summary [Financial Highlights](index=1&type=section&id=Financial%20Highlights) In Q2 2025, Snap-on reported net sales of $1,179.4 million, unchanged from the previous year, reflecting a 0.7% organic decline offset by favorable currency translation. Diluted EPS decreased to $4.72 from $5.07 in Q2 2024, with the prior year's results including a significant benefit from legal payments Q2 2025 Key Financial Metrics | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,179.4 | $1,179.4 | 0.0% | | Gross Margin | 50.5% | 50.6% | -10 bps | | Operating Earnings before Financial Services | $259.1 | $280.3 | -7.6% | | Operating Margin before Financial Services | 22.0% | 23.8% | -180 bps | | Net Earnings | $250.3 | $271.2 | -7.7% | | Diluted EPS | $4.72 | $5.07 | -6.9% | - Net sales were **flat year-over-year**, as a **$8.6 million (0.7%) organic sales decline** was completely offset by an **$8.6 million positive impact** from foreign currency translation[3](index=3&type=chunk) - The decline in operating earnings and net earnings was impacted by the prior-year period (Q2 2024) including an **$11.2 million benefit** (**$8.7 million after-tax**, or **$0.16 per diluted share**) from final payments related to a legal matter[3](index=3&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management expressed encouragement with the Q2 results, highlighting the return of sales growth in the U.S. Tools Group and resilient margins despite macroeconomic uncertainty. The company successfully pivoted to 'quick payback items' to match customer preferences and saw gains in diagnostics and precision-torque solutions. The strategy remains focused on manufacturing in local markets and leveraging structural strengths to navigate challenges - The company is encouraged by the **return to sales growth in the U.S. Tools Group** and **resilient gross margins**[4](index=4&type=chunk) - Strategic actions were taken to overcome variation in confidence among vehicle repair technicians by focusing on product development and marketing of **'quick payback items'**[4](index=4&type=chunk) - The company advanced with OEM dealerships and independent shops, particularly with its **diagnostics platforms** and **precision-torque solutions**[4](index=4&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) In Q2 2025, segment performance was mixed. The Snap-on Tools Group and Repair Systems & Information Group both posted organic sales growth of 1.6% and 2.3% respectively. Conversely, the Commercial & Industrial Group experienced a significant organic sales decline of 7.6%. Financial Services revenue grew slightly, but its operating earnings saw a small decrease [Commercial & Industrial Group](index=2&type=section&id=Commercial%20%26%20Industrial%20Group) The Commercial & Industrial Group saw **6.5% sales decline** and **7.6% organic decrease** in Q2 2025, with operating earnings down **24.6%** Commercial & Industrial Group Q2 Performance | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change | | :--- | :--- | :--- | :--- | | Segment Sales | $347.8 | $372.0 | -6.5% | | Organic Sales Change | -7.6% | N/A | N/A | | Operating Earnings | $46.9 | $62.2 | -24.6% | | Operating Margin | 13.5% | 16.7% | -320 bps | - The **organic sales decline** was primarily driven by **reductions in Asia Pacific and European-based hand tools businesses** and **lower activity with customers in critical industries**, partially offset by a **rise in the specialty torque operation**[5](index=5&type=chunk) [Snap-on Tools Group](index=2&type=section&id=Snap-on%20Tools%20Group) The Snap-on Tools Group achieved **1.9% sales growth** and **1.6% organic growth**, maintaining a **23.8% operating margin** Snap-on Tools Group Q2 Performance | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change | | :--- | :--- | :--- | :--- | | Segment Sales | $491.0 | $482.0 | +1.9% | | Organic Sales Change | +1.6% | N/A | N/A | | Operating Earnings | $116.7 | $114.8 | +1.7% | | Operating Margin | 23.8% | 23.8% | 0 bps | - The **organic sales increase** was driven by **higher sales in the U.S.**, while **international operations were essentially flat**[7](index=7&type=chunk) [Repair Systems & Information Group](index=2&type=section&id=Repair%20Systems%20%26%20Information%20Group) The Repair Systems & Information Group achieved **3.0% sales growth** and **2.3% organic growth**, improving its operating margin by **60 bps** Repair Systems & Information Group Q2 Performance | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change | | :--- | :--- | :--- | :--- | | Segment Sales | $468.6 | $454.8 | +3.0% | | Organic Sales Change | +2.3% | N/A | N/A | | Operating Earnings | $119.8 | $113.6 | +5.5% | | Operating Margin | 25.6% | 25.0% | +60 bps | - **Organic growth** was driven by **higher activity with OEM dealerships** and **increased sales of diagnostic and repair information products**, partially offset by **lower volumes of undercar equipment**[8](index=8&type=chunk) [Financial Services](index=3&type=section&id=Financial%20Services) Financial Services reported a **1.2% revenue increase** to **$101.7 million**, with operating earnings decreasing **2.8%** Financial Services Q2 Performance | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | Change | | :--- | :--- | :--- | :--- | | Revenue | $101.7 | $100.5 | +1.2% | | Operating Earnings | $68.2 | $70.2 | -2.8% | | Originations | $293.0 | $308.1 | -4.9% | [2025 Outlook](index=3&type=section&id=2025%20Outlook) Snap-on anticipates continued progress in 2025 by leveraging its capabilities in automotive repair and expanding into adjacent markets and critical industries. The company projects capital expenditures to be approximately $100 million and expects a full-year effective income tax rate between 22% and 23% - The company expects to make **ongoing progress** along its **runways for coherent growth**, including **expansion in automotive repair, adjacent markets, and critical industries**[11](index=11&type=chunk) - Projected capital expenditures for 2025 are **approximately $100 million**[11](index=11&type=chunk) - The full-year 2025 effective income tax rate is anticipated to be in the range of **22% to 23%**[12](index=12&type=chunk) Consolidated Financial Statements [Condensed Consolidated Statements of Earnings](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) For the three months ended June 28, 2025, net sales were flat at $1,179.4 million. Gross profit slightly decreased to $595.5 million. Due to higher operating expenses and the absence of a prior-year legal benefit, operating earnings fell to $327.3 million from $350.5 million. Net earnings attributable to Snap-on were $250.3 million, resulting in a diluted EPS of $4.72 Q2 2025 vs Q2 2024 Statement of Earnings | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | | :--- | :--- | :--- | | Net sales | $1,179.4 | $1,179.4 | | Gross profit | $595.5 | $597.3 | | Operating earnings | $327.3 | $350.5 | | Net earnings attributable to Snap-on | $250.3 | $271.2 | | Diluted EPS | $4.72 | $5.07 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 28, 2025, Snap-on's total assets increased to $8.20 billion from $7.90 billion at year-end 2024, driven by higher cash and inventories. Total liabilities remained stable at $2.46 billion. Total shareholders' equity grew to $5.74 billion from $5.42 billion, reflecting retained earnings growth Balance Sheet Summary | Metric | June 28, 2025 ($ millions) | Dec 28, 2024 ($ millions) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $1,458.3 | $1,360.5 | | Total current assets | $4,219.6 | $3,989.4 | | Total assets | $8,201.8 | $7,896.8 | | **Liabilities and Equity** | | | | Total current liabilities | $941.5 | $961.5 | | Long-term debt | $1,186.0 | $1,185.5 | | Total liabilities | $2,462.3 | $2,479.8 | | Total equity | $5,739.5 | $5,417.0 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash provided by operating activities was $535.7 million, a decrease from $649.8 million in the prior year, mainly due to changes in working capital. Net cash used in investing activities was $78.0 million. Financing activities used $364.5 million, primarily for dividends and treasury stock purchases, resulting in a year-to-date increase in cash of $97.8 million Six Months Ended Cash Flow Summary | Metric | Six Months Ended June 28, 2025 ($ millions) | Six Months Ended June 29, 2024 ($ millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $535.7 | $649.8 | | Net cash used by investing activities | $(78.0) | $(123.4) | | Net cash used by financing activities | $(364.5) | $(292.1) | | Effect of exchange rate changes on cash | $4.6 | $(3.1) | | **Increase in cash and cash equivalents** | **$97.8** | **$231.2** | Supplemental Information [Non-GAAP Measures and Supplemental Data](index=10&type=section&id=Non-GAAP%20Measures%20and%20Supplemental%20Data) The report provides supplemental non-GAAP data to offer insight into the separate performance of Snap-on's core non-financial services Operations and its Financial Services business. This data presents the Financial Services segment on an equity method basis within the Operations results, clarifying the distinct financial performance and position of each business unit. For Q2 2025, the Operations segment generated $250.3 million in net earnings, while the Financial Services segment contributed $38.1 million - Supplemental data is provided to show the performance of Snap-on's **non-financial services ("Operations")** and **Financial Services businesses separately**[28](index=28&type=chunk) - The supplemental data for Operations reflects results with Financial Services presented on the **equity method**[29](index=29&type=chunk) Q2 2025 Non-GAAP Net Earnings Attributable to Snap-on Inc. | Metric | Operations ($ millions) | Financial Services ($ millions) | | :--- | :--- | :--- | | Q2 2025 | $250.3 | $38.1 | | Q2 2024 | $271.2 | $38.8 |

Core Viewpoint - Snap-on is expected to report earnings on July 17, 2025, with analysts projecting earnings of $4.66 per share on sales of $1.16 billion, indicating a decline from the previous year's earnings of $5.07 per share on sales of $1.18 billion [2][3] Financial Performance - Snap-on has a market capitalization of $17 billion and generated $4.7 billion in revenue over the past twelve months, with operating profits and net income both at $1.0 billion [3] Earnings Reaction History - Over the past five years, Snap-on has recorded 20 earnings data points, resulting in 10 positive and 10 negative one-day (1D) returns, with positive returns occurring approximately 50% of the time [5][6] - The median positive return for the 1D post-earnings period is 2.9%, while the median negative return is -5.9% [6][9] Post-Earnings Positioning - Traders can utilize historical probabilities to position themselves ahead of earnings releases, and evaluate the relationship between immediate and medium-term returns to guide trading decisions [6][7] - Correlation data indicates that understanding the relationship between 1D and subsequent 5D returns can inform trading strategies, particularly if a positive 1D return is observed [7][8]

Core Viewpoint - Analysts project Snap-On (SNA) will report quarterly earnings of $4.61 per share, a decline of 6.1% year over year, with revenues expected to reach $1.15 billion, down 2.2% from the same quarter last year [1] Earnings Estimates - There has been no revision in the consensus EPS estimate for the quarter over the last 30 days, indicating analysts' collective reconsideration of their initial forecasts [1][2] - Changes in earnings estimates are crucial for predicting investor reactions to the stock [2] Key Metrics Projections - Analysts estimate 'Net Sales- Repair Systems & Information Group' will reach $469.57 million, reflecting a year-over-year increase of 3.3% [4] - 'Net Sales- Snap-on Tools Group' is expected to be $467.58 million, indicating a decline of 3% year over year [4] - 'Net Sales- Commercial & Industrial Group' is projected at $359.03 million, down 3.5% year over year [4] Operating Earnings Forecast - 'Operating earnings / (losses)- Financial services' is expected to be $68.73 million, compared to $70.20 million from the previous year [5] - 'Operating earnings / (losses)- Commercial & Industrial Group' is forecasted at $57.86 million, down from $62.20 million year over year [5] - 'Operating earnings / (losses)- Snap-on Tools Group' is projected at $107.02 million, compared to $114.80 million in the same quarter last year [6] - 'Operating earnings / (losses)- Repair Systems & Information Group' is expected to be $112.74 million, slightly down from $113.60 million year over year [6] Stock Performance - Over the past month, Snap-On shares have returned +2.4%, while the Zacks S&P 500 composite has changed +4% [7] - Snap-On currently holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [7]

Core Viewpoint - Snap-on Incorporated (SNA) is expected to report declines in both revenue and earnings for the second quarter of 2025, with a revenue estimate of $1.2 billion, reflecting a 2.2% decrease from the previous year [1] Financial Performance - The consensus estimate for quarterly earnings is stable at $4.61 per share, indicating a 6.1% decline from the same quarter last year [2] - Snap-on has experienced a negative trailing four-quarter earnings surprise of nearly 1% on average, with a notable negative surprise of 6.2% in the last reported quarter [2] Influencing Factors - The company is focusing on enhancing value creation through initiatives in safety, service quality, customer satisfaction, and innovation, including expanding its franchise network and increasing its presence in emerging markets [3] - Snap-on's innovation pipeline remains strong, with ongoing investments in product development and global brand expansion [3] Challenges - External challenges include macroeconomic headwinds, geographic pressures in key industries, and geopolitical disruptions, which are likely impacting performance [4] - The Tools Group unit has been sluggish due to lower activity in U.S. operations and adverse foreign currency translations, with an estimated 4% decline expected in the second quarter [5] - Rising raw material and operational costs continue to pose risks to profitability [4][9] Market Position - Despite challenges, Snap-on's manufacturing strategy allows for quick adjustments to evolving production landscapes, with expected resilience in the automotive repair sector due to increased household spending on repairs [6] - The Repair Systems & Information Group is predicted to see a 3% rise in the second quarter [6] Valuation - Snap-on's stock is trading at a forward 12-month price-to-earnings ratio of 16.54x, which is below its five-year high of 18.63x and the industry average of 17.50x, presenting an attractive investment opportunity [8] Recent Performance - Over the past three months, Snap-on's shares have decreased by 4.8%, compared to a 0.8% drop in the industry [10]

Core Insights - The North American medium and heavy-duty commercial vehicle (CV) electronic service tools (EST) market is experiencing gradual growth driven by advancements in vehicle complexity, focus on efficiency, and regulatory pressures [2][3][7] Market Dynamics - The market is influenced by stringent emissions regulations, such as the US EPA standards, which compel fleet operators to adopt advanced diagnostic tools for compliance [3][7] - Increasing complexity of heavy-duty truck systems necessitates sophisticated diagnostics software for optimal performance [2][8] - There is a growing demand for comprehensive fleet management solutions that provide real-time monitoring and diagnostics [9] Competitive Landscape - The market features a mix of OEMs and aftermarket companies, with key players including Cummins, Daimler Trucks North America, Volvo Group, PACCAR Inc., and Navistar International Corporation [4] - Aftermarket participants include Noregon Systems, Snap-on Inc., and Autel Intelligent Technology Corp. Ltd. [4] - The competitive dynamics have shifted, with an increasing average age of trucks leading to greater opportunities for aftermarket vendors [24] Emerging Trends - Key trends include the adoption of cloud-based solutions, shop automation, modularity, and product customization [5] - Innovative business models are emerging, such as product-as-a-service (PaaS) and technician as a service (TaaS) [18][19] - The market is witnessing technological disruptions due to the challenges faced by electric vehicles (EVs), prompting a shift towards alternative fuel engines [20][21] Growth Drivers - Stringent emission regulations are a significant driver for the demand for advanced diagnostic tools [7] - The rising complexity of truck systems increases the need for effective diagnosis and repair solutions [8] - Fleet management solutions are increasingly sought after to optimize performance and reduce costs [9] Growth Restraints - Integration issues with existing vehicle systems can pose challenges, especially for older models [13] - High initial investment and ongoing maintenance costs can impact long-term affordability [14] - Market saturation and product commoditization are leading to increased competition among established players [15][16] Key Competitors - Major competitors in the market include OEMs like Cummins, Daimler, Volvo, PACCAR, and Navistar, as well as aftermarket companies like Noregon Systems and Snap-on Inc. [26][28] - The competitive factors include technology development, product pricing, customer support, and distribution networks [28]

Company Overview - Snap-on (NYSE: SNA) is characterized as a reliable stock, often overlooked in the news, but has a consistent history of paying quarterly cash dividends since 1936 [1] Investment Strategy - Triba Research aims to identify high-quality businesses capable of delivering sustainable, double-digit returns over the long term [1] - The firm's strategy focuses on companies with strong competitive advantages, operating in growing markets, maintaining low debt levels, and led by skilled management [1] - The firm is led by economist Tomas Riba, who has two decades of investment experience and seeks to generate alpha through a concentrated portfolio of 10 to 15 carefully selected securities [1]

Summary of Snap-on's Conference Call Company Overview - Snap-on has been in operation for 105 years, starting in 1920 in the vehicle repair market with a focus on providing high-quality tools to mechanics [2][5] - The company has evolved to include 36 factories worldwide, generating $5 billion in sales and employing 13,000 people, with a product range of 85,000 SKUs [5][12] Business Segments 1. **Tools Group** - Represents 40% of Snap-on's business, targeting mechanics directly through 3,500 franchise vans in the U.S. [6][8] - Achieved a 25% margin, although it faced a decline due to market uncertainty [8] 2. **Shop Equipment** - Accounts for 28% of the business, selling equipment like lifts and software to shop owners [9] - Experienced a 3.7% growth in the quarter with a 25.7% operating income margin [10] 3. **Commercial and Industrial (C&I)** - Also 28% of the business, serving critical industries such as military, aviation, and oil and gas [11] - The segment is driven by the need for reliability and repeatability in high-stakes environments [11] Competitive Landscape - Snap-on differentiates itself as a premium tool provider, focusing on observing work environments to create tailored solutions [13][14] - The company holds a market share of 50-60% among technicians and has a strong brand presence [16][17] Impact of Tariffs - Snap-on is relatively insulated from tariffs due to its manufacturing strategy, producing 80% of its products in the U.S. for the U.S. market [22][23] - The company has 36 factories globally, with 15 in the U.S., allowing for flexibility in sourcing and production [24][28] Market Sentiment and Consumer Behavior - Mechanics have shown a shift towards shorter payback items due to economic uncertainty, leading Snap-on to pivot its product development towards hand tools and lower-cost diagnostics [31][36] - Consumer sentiment dropped significantly, influenced by external factors such as inflation and geopolitical tensions [41] Financial Performance - The company maintains a strong balance sheet with a focus on investing in its business, acquisitions, and dividends [64][68] - Snap-on has consistently paid dividends since 1939, increasing them annually for the last 15 years [68] Future Growth Opportunities - Snap-on is optimistic about growth in critical industries and the automotive sector, particularly with the rise of electric vehicles and advanced driver-assistance systems [70][75] - The company is leveraging its extensive database to enhance diagnostic capabilities, which is crucial as vehicles become more complex [72][74] Product Development - Snap-on is adapting its product development processes to incorporate new technologies like 3D printing, which helps reduce prototyping costs [80] - The company emphasizes continuous improvement and efficiency in its operations, aiming to maintain high margins despite increasing complexity in the market [81][82]

Core Insights - Snap-On's international operations are crucial for assessing its financial strength and growth potential [1][2] - The company's reliance on foreign markets is essential for understanding its earnings consistency and growth prospects [2][3] Financial Performance - For the quarter ending March 2025, Snap-On reported total revenue of $1.14 billion, a decline of 3.5% year over year [4] - International revenue breakdown shows Europe contributed $177.9 million (15.59%), down 3.23% from expectations [5] - Other International revenue was $109.8 million (9.62%), a surprise decline of 7.42% compared to analyst expectations [6] Future Projections - Analysts predict Snap-On will report $1.15 billion in total revenue for the current fiscal quarter, a decline of 2.1% year over year [7] - For the full year, total revenue is projected at $4.67 billion, a decrease of 0.9% from the previous year, with Europe and Other International expected to contribute 15.8% and 10.2% respectively [8] Market Context - The company's engagement in global markets presents both opportunities and challenges, necessitating close monitoring of international revenue trends [9][10] - Analysts are focused on international trends to refine earnings predictions, acknowledging that domestic performance also significantly influences forecasts [10]

Core Viewpoint - Snap-on Inc. (SNA) experienced a 3.4% decline in share price over the past month, primarily due to disappointing first-quarter 2025 results that missed revenue expectations and showed a year-over-year decline [1][3]. Financial Performance - In Q1 2025, Snap-on reported a 3.5% year-over-year decline in revenues, missing the Zacks Consensus Estimate, attributed to a 2.3% dip in organic sales and a $13.9 million negative impact from unfavorable foreign currency translation [3][4]. - The Tools Group segment, a significant revenue contributor, saw a 7.4% year-over-year sales decline, reflecting reduced U.S. operations and technician reluctance to finance purchases [6][8]. - The Commercial & Industrial Group also faced a 4.4% decline, impacted by decreased military-related demand and softness in the European hand tools market [6][8]. - Despite the overall decline, the Repair Systems & Information Group and Financial Services segment showed positive performance, with the former exceeding expectations due to rising demand from OEM dealerships and independent shops, and the latter achieving a 2.5% revenue increase [7][8]. Margin and Cost Control - Snap-on reported a gross margin expansion of 20 basis points year-over-year to 50.7%, despite a 3.1% decline in gross profit, indicating effective cost control and a favorable product mix [8]. Outlook and Estimates - Management maintains a cautiously optimistic outlook for 2025, focusing on resilience amid macroeconomic uncertainties and aiming to drive growth through established strategic initiatives [10]. - Following the soft Q1 performance, the Zacks Consensus Estimate for SNA's earnings per share has been revised downward by 0.8% for both 2025 and 2026, now projected at $18.76 and $20.04 per share, respectively [11].