Snap-on Incorporated (NYSE: SNA), a leading global innovator in tools, equipment, diagnostics, repair information, and systems solutions, has released its operating results for the second quarter of 2024. Net sales totaled $1,179.4 million for the quarter, marking a decrease of $11.9 million, or 1.0%, compared to the previous year. This decline was due to a $13.5 million (1.1%) drop in organic sales and $5.7 million in unfavorable foreign currency translation, although these were partially offset by $7.3 million from acquisition-related sales.
Operating earnings before financial services were $280.3 million, up from $277.0 million in 2023. This represents 23.8% of net sales, compared to 23.3% in the same quarter last year.
Financial services revenue was $100.5 million, an increase from $93.4 million in 2023. Operating earnings from financial services rose to $70.2 million from $66.9 million.
Consolidated operating earnings were $350.5 million, or 27.4% of total revenues (net sales plus financial services revenue), up from $343.9 million, or 26.8%, in the previous year.
The effective income tax rate for the quarter was 22.6%, slightly lower than the 22.9% reported in 2023.
Net earnings for the quarter were $271.2 million, or $5.07 per diluted share, compared to $264.0 million, or $4.89 per diluted share, the previous year. The operating earnings before financial services and consolidated operating earnings included an $11.2 million benefit from final payments related to a legal matter, while net earnings included an $8.7 million ($0.16 per diluted share) after-tax benefit from these legal payments.
Segment Results:
- Commercial & Industrial Group: Sales were $372.0 million, up from $364.2 million last year. This includes a $4.3 million (1.2%) organic sales gain and $7.3 million from acquisitions, partially offset by $3.8 million in unfavorable foreign currency translation. Organic growth was driven by increased activity with critical industry customers, although power tool and European hand tool operations saw declines. Operating earnings improved to $62.2 million, with a margin increase to 16.7% from 16.0%.
- Snap-on Tools Group: Sales fell to $482.0 million from $523.1 million, reflecting a $40.3 million (7.7%) organic sales decline and $0.8 million in unfavorable currency effects. The decrease was attributed to lower activity in U.S. operations, though international sales were higher. Operating earnings were $114.8 million, with the operating margin dropping to 23.8% from 26.3%.
- Repair Systems & Information Group: Sales were $454.8 million, slightly up from $452.0 million. The $4.3 million (1.0%) organic increase was partially offset by $1.5 million in unfavorable foreign currency translation. The organic gain included increased OEM dealership activity, while sales to independent repair shops declined. Operating earnings rose to $113.6 million, with the margin improving to 25.0% from 24.4%.
- Financial Services: Operating earnings were $70.2 million on $100.5 million in revenue, compared to $66.9 million on $93.4 million a year ago. Originations decreased by $18.2 million (5.6%) from 2023.
Corporate expenses for the quarter were $10.3 million, including benefits from the legal payments, down from $29.2 million in the prior year.
Nick Pinchuk, Snap-on’s Chairman and CEO, commented, “Despite ongoing uncertainty, we are encouraged by our second quarter results. We have faced challenges but have also seized significant growth opportunities. Our progress with customers and franchisees demonstrates our commitment to advancement and improvement. We remain dedicated to leveraging our Snap-on Value Creation Processes to drive future growth and maintain our momentum. I extend my gratitude to our franchisees and associates for their dedication and belief in our future.
