Sign in
SI

Snap-on Inc (SNA)·Q2 2026 Earnings Summary

Executive Summary

  • As of November 20, 2025, Snap-on has not reported Q2 2026 results; Wall Street consensus expects Q2 2026 diluted EPS of $5.07 and revenue of ~$1.23B, implying a modest YoY increase versus Q2 2025 actuals (values retrieved from S&P Global)*.
  • Trend context: Q2 2025 delivered resilient gross margin at 50.5% and consolidated operating margin of 25.5% despite macro/tariff headwinds, while Q3 2025 showed sequential momentum with gross margin at 50.9% and consolidated operating margin at 26.9% .
  • Management highlights continued traction from the Tools Group pivot to faster payback items and strong RS&I demand at OEM dealerships and independent shops; Asia-Pacific and European hand tools remained soft and undercar equipment weaker, though stabilizing in Q3 .
  • Guidance items maintained through 2025: capital expenditures ~$100M and effective tax rate 22–23%, with corporate expenses ~$27M per quarter and non-service pension costs $6M per quarter ($0.09 EPS impact per quarter) .
  • Dividend catalysts: quarterly dividend increased from $2.14 (Aug 2025) to $2.44 (Nov 2025), reinforcing capital returns and confidence in future potential .

What Went Well and What Went Wrong

What Went Well

  • Tools Group pivot to quick payback items overcame technician uncertainty; management: “pivot to quick payback items, gaining significant traction…reestablishing positive momentum” .
  • RS&I strength: “double-digit increase in activity with OEM dealerships” and “high single-digit” gains in diagnostics/repair information in Q2; continued strong performance in Q3 with 8.9% organic growth and elevated margins (including legal benefit) .
  • Gross margin resilience and tariff resistance: Q2 gross margin 50.5% with RCI offsetting FX; Q3 gross margin 50.9% as volumes and RCI actions mitigated tariff impacts .

What Went Wrong

  • Commercial & Industrial (CNI) contraction: Q2 CNI sales down 6.5% (7.6% organic) on Asia-Pacific and European hand tools softness; operating margin fell to 13.5% .
  • Financial Services originations declined: Q2 originations down 4.9%; Q3 down 4.8%, reflecting lower big-ticket tool storage demand and ongoing technician financing hesitation .
  • FX headwinds: Q2 FX reduced EPS by ~$0.06 and contributed 50 bps of gross margin drag; Q3 FX negative impact moderated to ~$0.01 and ~20 bps on gross margin .

Financial Results

MetricQ1 2025Q2 2025Q3 2025Q2 2026E
Revenue (Net Sales, $USD Millions)$1,141.1 $1,179.4 $1,190.8 $1,229.8*
Diluted EPS ($)$4.51 $4.72 $5.02 $5.07*
Gross Margin %50.7% 50.5% 50.9% —
Op. Margin before Financial Services %21.3% 22.0% 23.4% —
Consolidated Operating Earnings Margin %25.2% 25.5% 26.9% —

Values retrieved from S&P Global*.

Segment Sales ($USD Millions)

SegmentQ1 2025Q2 2025Q3 2025
Commercial & Industrial Group$343.9 $347.8 $367.7
Snap-on Tools Group$462.9 $491.0 $506.0
Repair Systems & Information Group$475.9 $468.6 $464.8

Segment Operating Earnings ($USD Millions)

SegmentQ1 2025Q2 2025Q3 2025
Commercial & Industrial Group$53.2 $46.9 $57.5
Snap-on Tools Group$92.4 $116.7 $109.9
Repair Systems & Information Group$122.1 $119.8 $141.2

KPIs

KPIQ1 2025Q2 2025Q3 2025
Financial Services Revenue ($USD Millions)$102.1 $101.7 $101.1
Financial Services Operating Earnings ($USD Millions)$70.3 $68.2 $68.9
Loan Originations ($USD Millions)$268.7 $293.0 $274.1
U.S. 60+ Day Delinquency (Extended Credit)—1.8% 2.0%
Avg Yield on Finance Receivables—17.5% 17.7%
Cash & Cash Equivalents ($USD Millions)$1,434.9 $1,458.3 $1,534.1

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Capital ExpendituresFY 2025~$100M ~$100M Maintained
Effective Tax RateFY 202522%–23% 22%–23% Maintained
Corporate ExpensesQ4 2025~$27M per quarter ~$27M (Q4) Maintained
Non-service Pension CostsFY 2025~$6M/qtr; ~($0.09) EPS/qtr ~$6M/qtr; ~($0.09) EPS (Q4) Maintained
Quarterly DividendQ3 2025$2.14/share (declared) $2.44/share (raised Nov 2025) Raised (+14%)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q1 2025; Q-1: Q2 2025)Current Period (Q2 2026)Trend
Tools Group pivot to faster payback itemsTechnician reluctance to financed products; pivot emphasized ; pivot gaining traction Not yet reported; investor focus remains on sustained pivot effectivenessImproving
Diagnostics (Triton)RS&I up; diagnostics strength ; Triton launched; strong uptake Not yet reported; watch continued diagnostic momentumStrengthening
OEM dealershipsDouble-digit increases in Q2 ; strong Q3 performance Not yet reported; continued program/share gains in focusStrengthening
Under-car equipmentHigh-single-digit decline in Q2 Low-single-digit decline in Q3; stabilizing Stabilizing
Tariffs/macro uncertainty“Liberation Day” shock; accommodation building Volatility ongoing but operations resilient Ongoing, accommodated
FX impacts (Swedish krona)50 bps gross margin drag; EPS -$0.06 Q2 ~20 bps drag; EPS -$0.01 Q3 Easing
Asia-PacificDouble-digit declines (CNI) in Q2 Continued weakness in Q3 Weak
Financial Services portfolioOriginations down; credit metrics balanced Originations down; delinquencies seasonally higher but balanced Mixed
Supply chain/production strategy“Make in markets where we sell” advantages reiterated Strategy remains a structural advantageDurable

Management Commentary

  • “We’re encouraged by our second quarter results…pivot to quick payback items, gaining significant traction…positive momentum” — Nick Pinchuk, CEO .
  • “Third quarter was encouraging…continuing momentum…enabled by advantages in strategy (making in markets where we sell) and structure (15 U.S. factories)” .
  • “Consolidated gross margin of 50.9%…year-over-year decline of 30 bps primarily reflected 20 bps of unfavorable FX…tariff impacts largely offset by higher sales and RCI initiatives” — CFO Aldo Pagliari .
  • “RS&I organic sales up 8.9%…double-digit OEM dealership activity…diagnostics and repair information gains” .

Q&A Highlights

  • FX impact on EPS: ~$0.06 negative in Q2 2025 and ~$0.01 negative in Q3 2025; management emphasized moderation in Q3 .
  • Tools Group mix: Q2 hand tools led growth; diagnostics strong while tool storage weak; Q3 hand tools did not have a great quarter while diagnostics remained strong and power tools ramped late-quarter on new product .
  • Originations/financing: declines tied to big-ticket storage hesitation; diagnostic launches provided some offset .
  • SFC (Franchisee Conference) orders: up mid-single digits year over year; management noted orders are not sales and cancellations can occur; packages designed to reduce cancellation risk .
  • CNI backlog/timing: project delays amid tariff uncertainty led to order build but slower deliveries; signs of improvement exiting Q2 .

Estimates Context

  • Q2 2026 Wall Street consensus: Diluted EPS $5.07 (5 estimates) and revenue ~$1.23B (8 estimates), EBITDA ~$388.4M; target price consensus $361 (8 estimates)*. Values retrieved from S&P Global.
  • Relative to Q2 2025 actuals, consensus implies modest YoY increases, with investor focus on sustaining gross margin resilience, RS&I momentum, and further stabilization in CNI .

Key Takeaways for Investors

  • Margin resilience remains a core strength (Q2 gross margin 50.5%; Q3 50.9%) despite tariffs/FX; continued RCI execution is offsetting external headwinds .
  • Tools Group pivot is working against technician financing hesitancy; watch mix (hand tools vs. diagnostics/tool storage) and new product cadence for sustained momentum .
  • RS&I is the growth engine (double-digit OEM dealership activity; diagnostics/repair information gains); this ecosystem supports higher, more durable profitability .
  • CNI remains the swing factor: Asia-Pacific/European hand tools are weak; critical industries and specialty torque are offsets; trajectory improved sequentially in Q3 .
  • Financial Services shows stable revenue/earnings with originations pressured by big-ticket storage; credit metrics remain relatively balanced .
  • 2025 guidance maintained (capex ~$100M; tax rate 22–23%; corporate expense ~$27M/qtr; non-service pension ~$6M/qtr with ~$0.09 EPS impact), reducing near-term estimate risk .
  • Dividend growth underscores confidence (from $2.14 to $2.44 in 2025), supporting total return while internal investments continue .

Notes:

  • Q2 2026 financials are not yet reported; comparisons leverage Q1–Q3 2025 actuals and S&P Global consensus for Q2 2026*.
  • Values retrieved from S&P Global*.