Shares of Snap-on Corporation (SNA - Free Report) have lost 9.4% year to date compared with the industry’s decline of 8.3% and against the Consumer Discretionary sector’s growth of 25.5%. The stock’s dismal run on the bourses can be attributable to the second-quarter 2020 results, wherein the bottom line lagged the Zacks Consensus Estimate. Further, both top and bottom lines declined year over year. Results were affected by the tough economic environment and unprecedented COVID-19 impacts. From April to June, the company witnessed a declining sales trend.
Also, the top line was hurt by sluggish organic sales and adverse foreign currency movements. Notably, unfavorable currency hurt sales by $14.4 million in second-quarter 2020. Moreover, adverse currency impacts of $6.9 million, $2.3 million and $4.8 million were witnessed in the company’s Commercial & Industrial Group, Tools Group, and Repair Systems & Information Group, respectively. In fact, currency headwinds are expected to continue in the coming quarters.
However, management is not sitting idle and looking into every nook and cranny to boost growth. Notably, its robust business model and focus on value-creation processes have been aiding the company’s earnings. The strategy also focusses on enhancing the franchise network, improving relationships with repair shop owners and managers and expanding critical industries in emerging markets.
Apart from these, it is making efforts to combat the uncertain COVID-19 impacts via cost-cutting initiatives and the Rapid Continuous Improvement (RCI) plan. Moreover, this RCI program, designed to enhance organizational effectiveness and efficiency and generate savings, has been aiding margins.
Despite the tough retail environment stemming from the ongoing COVID-19 outbreak, this Zacks Rank #3 (Hold) company has witnessed improving trends in the second quarter, which is likely to continue in the near term. Further, Snap-on is increasing focus on its RCI plan and other cost-cutting efforts in a bid to stay afloat amid this crisis.
Stocks to Consider
Crocs (CROX - Free Report) has a long-term earnings growth rate of 15% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Whirlpool Corporation (WHR - Free Report) has a long-term earnings growth rate of 16.7%. Currently, it sports a Zacks Rank #1.
Hanesbrands (HBI - Free Report) , also a Zacks Rank #1 stock, has a long-term earnings growth rate of 3.3%.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>