Snap-On Q3: 5% Topline Growth, Changing Environment & More

Snap-On Inc SNA reported third-quarter FY23 sales growth of 5.2% year-on-year to $1.16 billion.

The revenue increase reflected a $52.4 million, or 4.7%, organic sales gain, $4.4 million of favorable foreign currency translation.

Segment Sales: Commercial & Industrial Group climbed 3.2%, Snap-on Tools Group rose 3.7% and Repair Systems & Information Group increased 3.1%, all on an organic basis.

Gross profit for the quarter gained 8.6% to 578.2 million, and the gross margin expanded to 49.8%.

Operating income for the quarter increased 8.5% to $314.6 million, and the operating margin expanded around 80 basis points to 27.1%.

EPS of $4.51 improved from $4.14 in the same period last year.

Snap held $959.3 million in cash and equivalents as of September 30, 2023. Operating cash flow totaled $285.4 million.

"We're encouraged by our third quarter as it reflects ongoing advancement in sales, profitability, and earnings in a continually changing environment, and it demonstrates the wide-ranging and considerable strengths that mark each of our operating segments," said Chairman and CEO Nick Pinchuk.

Outlook: Snap sees FY23 capital expenditures of approximately $100 million. It currently anticipates its 2023 effective income tax rate to be about 23%.

Price Action: SNA shares closed lower by 3.35% at $250.35 on Wednesday.