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Snap-on Inc (SNA)·Q3 2026 Earnings Summary

Executive Summary

  • Total revenues of $1.2919B (+3.6% YoY) and net sales of $1.1908B (+3.8% YoY); diluted EPS of $5.02 included a $0.31 one-time benefit from a legal settlement; gross margin held at 50.9% and consolidated operating earnings margin reached 26.9% .
  • RS&I delivered strong organic growth (+8.9%) and margin expansion (30.4% including legal benefit), Tools grew modestly (+1.0% organic) with solid margins, while C&I saw a small organic decline (-0.8%) amid Asia-Pacific weakness; Financial Services operating earnings were $68.9M with originations down 4.8% .
  • Versus Wall Street Q3 consensus, Snap-on beat EPS and revenue in the comparable prior year quarter (Q3 2025): EPS $4.71 actual vs $4.66 estimate; revenue $1.292B actual vs $1.160B estimate; for the current period, Q3 2026 consensus stands at EPS $5.03 and revenue $1.238B (S&P Global)*.
  • Notable corporate items: Board raised the quarterly dividend 14% to $2.44 per share in November 2025, underscoring confidence in cash generation and strategic positioning .

What Went Well and What Went Wrong

What Went Well

  • RS&I momentum: organic sales +8.9%, operating margin 30.4% bolstered by higher activity with OEM dealerships and robust diagnostic/software demand; legal settlement provided a $22M benefit to RS&I expenses .
  • Tools Group resilience: +1.0% organic sales; operating margin 21.7%, aided by international strength and U.S. stabilization, with continued success of quick-payback items and new product launches .
  • Gross margin stability: consolidated gross margin at 50.9% despite tariff and FX headwinds, with RCI savings offsetting adverse currency impacts .
  • “Encouraging momentum” narrative: CEO emphasized advantages of making where they sell (15 U.S. plants, 36 worldwide) and pivot to quicker payback tools as market conditions evolve .
  • Strong cash generation: Q3 operating cash flow of $277.9M; cash balance increased to $1.534B .

What Went Wrong

  • C&I softness: organic sales -0.8% on Asia-Pacific reductions; operating margin fell to 15.6% from 16.7% YoY; FX headwinds also impacted margins .
  • Financial Services: operating earnings declined to $68.9M (from $71.7M), with originations down 4.8% and higher provisions for credit losses .
  • FX and tariffs: unfavorable currency (notably SEK vs EUR/USD) and trade policy uncertainty pressured profitability, though mitigated by RCI .
  • Working capital: DSO increased to 71 days and inventories rose, reflecting demand mix shifts and supply-chain mitigation .
  • Non-GAAP/legal factors: EPS and margins benefited from a one-time legal settlement ($0.31 per share), complicating clean comparability .

Financial Results

MetricQ3 2024Q2 2025Q3 2025Q3 2025 ConsensusNotes
Total Revenues ($USD Billions)$1.2474 $1.2811 $1.2919 $1.1596Actual vs consensus (S&P Global)*
Net Sales ($USD Billions)$1.1470 $1.1794 $1.1908 ——
Diluted EPS ($USD)$4.70 $4.72 $5.02 $4.6557EPS included $0.31 legal benefit
Gross Margin (%)51.2% 50.5% 50.9% —FX headwinds noted
Operating Earnings Margin (% of Revenues)26.0% 25.5% 26.9% —Includes $22M legal benefit

Segment breakdown (Net Sales and Operating Earnings):

SegmentQ3 2024 Net Sales ($MM)Q3 2025 Net Sales ($MM)Q3 2024 Op Earnings ($MM)Q3 2025 Op Earnings ($MM)
Commercial & Industrial$365.7 $367.7 $61.0 $57.5
Snap-on Tools Group$500.5 $506.0 $108.3 $109.9
RS&I Group$422.7 $464.8 $107.3 $141.2
Financial Services (Rev/Op Earnings)$100.4/$71.7 $101.1/$68.9 ——

KPIs and Operating Metrics:

KPIQ3 2024Q2 2025Q3 2025
Financial Services Originations ($MM)—$293.0 $274.1
Avg Yield Finance Receivables (%)17.7% 17.5% 17.7%
Avg Yield Contract Receivables (%)9.1% 9.1% 9.1%
DSO (days)—65 71
Inventory Turns (TTM)—2.4 2.3
Operating Cash Flow ($MM)—$237.2 $277.9

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Effective Tax RateFY 202522–23% 22–23% Maintained
Capital ExpendituresFY 2025~$100M (YTD $42.6M at Q2) ~$100M (YTD $62.5M at Q3) Maintained
Corporate ExpensesQ4 2025—~$27M Established
Non-service Pension CostsQ4 2025—~$6M pretax; ~$0.09 EPS headwind Established
DividendOngoing$2.14/qtr $2.44/qtr (14% raise) Raised

Earnings Call Themes & Trends

TopicQ1 2025Q2 2025Current Period (Q3 2025)Trend
Technician sentiment & quick-payback pivotConfidence poor; pivot broadened to lower-end big-ticket (e.g., SOLUS, carts) Pivot gained traction; U.S. Tools up; diagnostics & hand tools strong Sequential momentum; tools margin strong; SFC orders up mid-single digits Improving pivot execution
Tariffs/macro & FXHeightened uncertainty; tariff “fog”; strategy advantaged by U.S. production Liberation Day shock; accommodation later; FX (SEK) headwinds Resilient gross margin; continued FX pressure mitigated by RCI Headwinds mitigated
RS&I product & OEM dealershipsRecord margin; software/databases and AI NLP enhancing data quality Double-digit OEM activity, strong new Triton handheld RS&I +8.9% organic; OEM and independent repair strength Continuing strength
Critical industries (C&I)Military delays; still robust opportunity Project delays early; order book improved through quarter Asia-Pacific weakness; aviation/natural resources solid Mixed, improving
Financial Services creditDelinquencies trending up modestly; yields stable Originations down 4.9%; higher provisions; yields stable Originations down 4.8%; provisions higher Slightly negative

Management Commentary

  • “Our third quarter was encouraging…resilient gross margins, and…strong profitability…enabled by our distinct advantages in strategy…generally making in the markets where we sell…and in structure…15 factories in the U.S. and 36 plants worldwide” — CEO Nick Pinchuk .
  • “Operating expenses included a $22.0 million benefit from the settlement of a legal matter…Operating earnings margin of 26.9%” — CFO Aldo Pagliari .
  • “Repair shop owners and managers know they have to upgrade to keep pace…RS&I can put them right on target with our innovative hardware and powerful software” — CEO .
  • “Financial services…originations…represented a decrease of 4.8%…higher provisions for credit losses” — CFO .

Q&A Highlights

  • RS&I consistency: Management cited better launch execution (Triton) and balanced performance across platforms; undercar equipment stabilized, while OEM dealership programs and share gains supported growth .
  • Tools demand cadence: Diagnostics and hand tools outperformed; tool storage remained soft; international tools were flat; pricing remained disciplined; margins held despite mix .
  • C&I outlook: Project delays tied to tariff uncertainty eased into quarter-end; aviation/natural resources strengthened; Asia-Pacific remained turbulent; order book improved .
  • Financial Services & credit: Originations down modestly; yields stable; provisions up; delinquency rates and net losses stayed “balanced” given the environment .
  • Corporate costs & pension: ~$27M corporate expense and ~$6M Q4 non-service pension cost expected, with ~$0.09 EPS quarterly headwind .

Estimates Context

  • Q3 2025 comparison (prior-year quarter): EPS actual $4.71 vs consensus $4.6557; revenue actual $1.2919B vs consensus $1.1596B (S&P Global)*.
  • Q3 2026 consensus (current period): EPS $5.0325; revenue $1.2377B; EPS estimates count: 4; revenue estimates count: 8 (S&P Global)*.

Key Takeaways for Investors

  • RS&I remains the growth engine; strength in OEM dealership programs and intelligent diagnostics/software underpins margins and cash flow; monitor continued product rollouts and OEM partnerships .
  • Tools pivot is working; quick-payback items and targeted lower-end big-ticket offerings offset hesitation in large storage; watch SFC order conversion in Q4 and international tools stabilization .
  • C&I mixed but improving; project momentum recovering into quarter-end; Asia-Pacific weakness persists; focus on aviation/natural resources torque solutions and custom tools as catalysts .
  • Margin durability amid tariffs/FX signals strong execution; RCI savings and U.S.-centric manufacturing footprint mitigate external pressures; gross margin resilience supports valuation .
  • Financial Services quality intact; modest originations decline and higher provisions bear watching; stable yields and balanced portfolio metrics limit downside risk .
  • Dividend raised 14% to $2.44 signals confidence in FCF and balance sheet; consider dividend-growth profile in total return outlook .
  • Near-term trading: Favorable print with beat vs prior-year consensus, RS&I strength, and gross margin stability could support shares; medium-term thesis anchored on diagnostics/software scaling, disciplined capital allocation, and resilient core auto repair end-markets .

* Values retrieved from S&P Global.