Snap-on(SNA) - 2025 Q3 - Quarterly Results

Executive Summary & Highlights Snap-on reported strong Q3 2025 results, with increased sales and EPS, boosted by a legal settlement, and the CEO highlighted strategic advantages and growth opportunities Third Quarter 2025 Financial Highlights Snap-on reported increased sales and diluted EPS for Q3 2025, with a significant benefit from a legal settlement contributing to improved operating earnings and net earnings compared to the prior year Key Financial Metrics | Metric | Q3 2025 | Q3 2024 | Change (%) | | :----------------------------------- | :------ | :------ | :--------- | | Net Sales | $1,190.8M | $1,147.0M | +3.8% | | Organic Sales | N/A | N/A | +3.0% | | Gross Margin | 50.9% | N/A | N/A | | Diluted EPS | $5.02 | $4.70 | +6.8% | | Diluted EPS (incl. legal settlement) | $5.02 (+$0.31) | N/A | N/A | | Operating Earnings before Financial Services | $278.5M | $252.4M | +10.3% | | Operating Earnings before Financial Services (% of sales) | 23.4% | 22.0% | +1.4 pp | | Consolidated Operating Earnings | $347.4M | $324.1M | +7.2% | | Consolidated Operating Earnings (% of revenues) | 26.9% | 26.0% | +0.9 pp | | Net Earnings | $265.4M | $251.1M | +5.7% | | Effective Income Tax Rate | 22.6% | 22.9% | -0.3 pp | CEO Commentary CEO Nick Pinchuk highlighted encouraging Q3 results, attributing success to sales growth, resilient gross margins, strong profitability, and strategic advantages like localized manufacturing and flexible plant structure - The third quarter was encouraging, demonstrating continuing momentum in meeting and overcoming considerable uncertainty and trade turbulence, evidenced by overall sales growth, resilient gross margins, and strong profitability[5] - Success is enabled by distinct advantages in strategy (making in markets where sold) and structure (utilizing flexibility of 15 U.S. and 36 worldwide plants)[5] - The company is maintaining actions to match vehicle technicians' preference for quick payback items and extending profitable penetration of critical industries, alongside robust expansion with OEM dealerships and independent shops, fortified by software portfolio gains[5] Segment Results This section details the financial performance of Snap-on's Commercial & Industrial, Snap-on Tools, Repair Systems & Information, and Financial Services segments Commercial & Industrial Group The Commercial & Industrial Group saw a slight sales increase due to favorable foreign currency translation, despite an organic sales decline primarily in Asia Pacific, offset by growth in critical industries and specialty torque Commercial & Industrial Group Performance | Metric | Q3 2025 | Q3 2024 | Change | | :---------------- | :------ | :------ | :----- | | Segment Sales | $367.7M | $365.7M | +$2.0M | | Organic Sales | N/A | N/A | -0.8% | | Operating Earnings | $57.5M | $61.0M | -$3.5M | | Operating Margin | 15.6% | 16.7% | -1.1 pp | - Organic sales decline primarily due to reductions in the segment's Asia Pacific business, partially offset by higher activity with customers in critical industries and in the specialty torque operation[6] Snap-on Tools Group The Snap-on Tools Group reported increased sales driven by organic growth in international operations and slightly higher U.S. sales, along with favorable foreign currency translation Snap-on Tools Group Performance | Metric | Q3 2025 | Q3 2024 | Change | | :---------------- | :------ | :------ | :----- | | Segment Sales | $506.0M | $500.5M | +$5.5M | | Organic Sales | N/A | N/A | +1.0% | | Operating Earnings | $109.9M | $108.3M | +$1.6M | | Operating Margin | 21.7% | 21.6% | +0.1 pp | - Organic sales gain is due to increased activity in the segment's international operations and slightly higher sales in the U.S. business[8] Repair Systems & Information Group The Repair Systems & Information Group experienced significant sales and operating earnings growth, largely due to an 8.9% organic sales increase from higher activity with OEM dealerships and diagnostic/repair information products, and a substantial benefit from a legal settlement Repair Systems & Information Group Performance | Metric | Q3 2025 | Q3 2024 | Change | | :---------------- | :------ | :------ | :----- | | Segment Sales | $464.8M | $422.7M | +$42.1M | | Organic Sales | N/A | N/A | +8.9% | | Operating Earnings | $141.2M | $107.3M | +$33.9M | | Operating Margin | 30.4% | 25.4% | +5.0 pp | - Organic gain includes higher activity with OEM dealerships and increased sales of diagnostic and repair information products to independent repair shop owners and managers, partially offset by lower volumes of undercar equipment[9] - Operating earnings for the period include a benefit of $22.0 million from a legal settlement[10] Financial Services Financial Services reported a slight increase in revenue but a decrease in operating earnings, with originations declining by 4.8% compared to the prior year Financial Services Performance | Metric | Q3 2025 | Q3 2024 | Change | | :---------------- | :------ | :------ | :----- | | Revenue | $101.1M | $100.4M | +$0.7M | | Operating Earnings | $68.9M | $71.7M | -$2.8M | | Originations | $274.1M | $288.0M | -$13.9M (-4.8%) | - Corporate expenses in the third quarter were $30.1 million, compared to $24.2 million last year[11] Company Outlook & Guidance Snap-on anticipates continued progress in its growth strategies, leveraging automotive repair expertise and expanding into adjacent markets and critical industries, projecting capital expenditures of approximately $100 million for 2025 and a full-year effective income tax rate of 22% to 23% - Snap-on expects ongoing progress along its decisive runways for coherent growth, leveraging capabilities in automotive repair and expanding its professional customer base in adjacent markets, additional geographies, and critical industries[12] - Projected capital expenditures for full-year 2025 will approximate $100 million, with $62.5 million incurred in the first nine months[12] - The full-year 2025 effective income tax rate is anticipated to be in the range of 22% to 23%[13] Additional Information This section provides details on the conference call, non-GAAP measures, company overview, forward-looking statements, and contact information Conference Call and Webcast Snap-on scheduled a webcast and conference call for October 16, 2025, at 9:00 a.m. Central Time to discuss the earnings release, with replay and slide presentation access available online - A discussion of this release will be webcast on Thursday, October 16, 2025, at 9:00 a.m. Central Time[14] - Access to the webcast and accompanying slide presentation is available via the Snap-on investor relations website[14] Non-GAAP Measures Definition This section defines "organic sales" as a non-GAAP measure, explaining it excludes acquisition-related sales and foreign currency translation impacts to provide insight into underlying business growth from existing operations - Organic sales refer to sales from continuing operations, adjusted to exclude acquisition-related sales and the impact of foreign currency translation[15] - Management uses organic sales growth to evaluate sales performance, reflecting growth from existing businesses due to increased output, expanded customer base, geographic expansion, new product development, and pricing changes[15] - This non-GAAP measure is considered meaningful to investors as it aids in identifying underlying growth trends and facilitates comparisons with prior periods[15] About Snap-on Snap-on Incorporated is a global innovator, manufacturer, and marketer of tools, equipment, diagnostics, and repair solutions for professional users across various critical tasks - Snap-on is a leading global innovator, manufacturer, and marketer of tools, equipment, diagnostics, repair information, and systems solutions for professional users performing critical tasks[16] - Products and services are sold through franchisee vans, direct, and distributor channels under various brands[16] - The company generated sales of $4.7 billion in 2024 and is headquartered in Kenosha, Wisconsin[16](index=