Snap-On's Q1 Results Underwhelm, CEO Stresses Resilience And Strategic Advantage Moving Forward

Snap-On Inc. SNA reported disappointing expected first-quarter 2025 results, falling short of both revenue and earnings consensus estimates.

Here’s a breakdown of the report:

• Quarterly net sales reached $1.141 billion, reflecting a 3.5% year-over-year increase and below the consensus estimate of $1.20 billion.
• Sales were impacted by a 2.3% organic decline and a $13.9 million negative effect from unfavorable foreign currency translation.   
• The gross margin expanded by 23 bps to 50.7%, and gross profit fell 3.1% year over year to $578.5 million.
• Financial services revenue rose to $102.1 million, with operating earnings at $70.3 million, up from $99.6 million and $68.3 million, respectively, in 2024.
• Consolidated operating earnings were $313.4 million, or 25.2% of revenues, compared to $339.2 million, or 26.5% of revenues, in 2024, which included an $11.3 million legal payments benefit.
• EPS for the quarter was $4.51, down from $4.91 YoY, below the consensus of $4.84.
• Operating cash flow for the quarter totaled $298.5 million, compared to $348.7 million a year ago, with $1.434 billion in cash and equivalents at the quarter’s end.

Sales by segments:

• Commercial & Industrial $343.9 million (-2.9% YoY)
• Snap-on Tools $462.9 million (-6.8% YoY)
• Repair Systems & Information $475.9 million (+3.7% YoY).

“As we move forward, we believe strongly in our long-established strategy to largely produce in the countries and regions where we sell and in our broad manufacturing capacity in the U.S., fortified by extensive facilities, enabled by deep process know-how, and fueled by experienced associates… all structural advantages that position us well to navigate today’s world,” said Snap-on CEO Nick Pinchuk.

“These are times of expanding turbulence. We are, however, confident, holding great belief in the criticality of our markets across essential repair, the considerable capabilities of our battle-tested team, and the power of our continuing investments in product, brand, and people.”

Outlook 2025: Snap-on expects to continue demonstrating resilience, focusing on growth in automotive repair and expanding into adjacent markets and critical industries.

The company plans to spend approximately $100 million on capital expenditures in 2025, with $22.9 million already spent in the first quarter.

Snap-on anticipates an effective income tax rate for 2025 in the range of 22% to 23%.

Price Action: Snap-on shares closed 1.50% lower at $332 on Wednesday.

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