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Snap-on (SNA) Earnings and Sales Surpass Estimates in Q1
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Snap-on Inc. (SNA - Free Report) has posted impressive first-quarter 2022 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate and advanced year over year. Despite the ongoing pandemic-related disruptions, inflationary pressures and supply-chain challenges, results have gained from continued positive business momentum and contributions from its Value Creation plan.
The company also noted that it progressed well beyond the pre-pandemic level of 2019. Management also remains on track with its Rapid Continuous Improvement process and other cost-reduction initiatives.
Shares of Snap-on have gained 7.4% in a year compared with the industry's 0.1% growth.
Image Source: Zacks Investment Research
Q1 Highlights
Snap-on’s earnings of $4.00 per share in first-quarter 2022 beat the Zacks Consensus Estimate of $3.68. The figure was up 14.3% from earnings of $3.50 reported in the prior-year quarter.
Net sales grew 7.1% to $1,097.8 million and beat the Zacks Consensus Estimate of $1,053 million. The uptick can be attributed to organic sales growth of 8% and $8.5 million of contributions from acquisitions, somewhat offset by $15.7 million of negative impacts of foreign-currency translations.
The top line also advanced 19.1% from the first-quarter 2019 figure, driven by organic sales growth of 16.9%.
SnapOn Incorporated Price, Consensus and EPS Surprise
The gross profit was $534.3 million, up 4% year over year, while the gross margin contracted 150 basis points (bps) year over year to 48.6% in the reported quarter.
The company’s operating earnings before financial services totaled $223.1 million, up 11.1% year over year. The metric, as a percentage of sales, expanded 70 bps to 20.3% in the quarter under review. Financial Services’ operating earnings were $70.4 million in the quarter.
Consolidated operating earnings were $293.5 million, up 10.3% year over year. As a percentage of sales, operating earnings expanded 90 bps to 24.8%.
Segmental Details
Sales in Commercial & Industrial Group decreased 1.6% from the prior-year quarter to $340.1 million, driven by organic sales growth of 1.1%, which was more than offset by a negative currency impact of $9.2 million. Organic growth was aided by higher sales in the segment’s Asia Pacific operations, offset by declines in critical industries.
The Tools Group segment’s sales rose 7.1% year over year to $512.1 million, driven by organic sales growth of 7.7%, offset by a $3-million negative impact of foreign currency. Robust activity in the U.S. franchise business, offset by the drab international operations, aided organic sales.
Sales in Repair Systems & Information Group advanced 14.6% year over year to $398.2 million. Organic sales in the segment rose 13.3% from the year-ago quarter, along with gains of $8.5 million from acquisitions aided sales. This was somewhat offset by a $3.6-million negative impact from foreign currency. Strength in diagnostics and repair information products to independent repair shop owners and managers, a rise in sales of under-car equipment, and higher activity with OEM dealerships contributed to segment organic sales growth.
The Financial Services business reported revenues of $87.7 million, down from $88.6 million in the year-ago quarter.
Financials
As of Apr 2, 2022, Snap-on’s cash and cash equivalents totaled $861.1 million, with long-term debt of $1,183.2 million and $4,298.3 million in shareholders’ equity. It incurred $20.2 million of capital expenditure in first-quarter 2022.
Looking Ahead
Though Snap-on has shown resilience, the Zacks Rank #3 (Hold) company expects continued impacts from potential threats of new COVID-19 variants and supply-chain headwinds for 2022. It remains focused on expanding the customer base, particularly in the automotive repair and critical industries. As a result, the capital expenditure for 2022 is projected to be $90-$100 million. It expects an effective tax rate of 23-24% for 2022.
Stocks to Consider
Some better-ranked companies from the Consumer Discretionary sector are GIII Apparel Group (GIII - Free Report) , Gildan Activewear (GIL - Free Report) and Toro (TTC - Free Report) .
GIII Apparel currently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 160.6% on average. The GIII stock has gained 11.6% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GIII Apparel's current financial year’s sales and earnings per share suggests growth of 8.7% and 5.2%, respectively, from the year-ago period's reported numbers.
Gildan Activewear presently flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 66.6%, on average. Shares of GIL have declined 4.7% in the past three months.
The Zacks Consensus Estimate for Gildan Activewear’s current financial-year sales and earnings suggests growth of 8.9% and 3.3% from the year-ago period’s reported numbers, respectively.
Toro currently carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 7.3%, on average. Shares of TTC have declined 8% in the past three months.
The Zacks Consensus Estimate for Toro’s current financial year’s sales and earnings suggests growth of 12.5% and 11.6%, respectively, from the year-ago period's reported numbers.
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Snap-on (SNA) Earnings and Sales Surpass Estimates in Q1
Snap-on Inc. (SNA - Free Report) has posted impressive first-quarter 2022 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate and advanced year over year. Despite the ongoing pandemic-related disruptions, inflationary pressures and supply-chain challenges, results have gained from continued positive business momentum and contributions from its Value Creation plan.
The company also noted that it progressed well beyond the pre-pandemic level of 2019. Management also remains on track with its Rapid Continuous Improvement process and other cost-reduction initiatives.
Shares of Snap-on have gained 7.4% in a year compared with the industry's 0.1% growth.
Image Source: Zacks Investment Research
Q1 Highlights
Snap-on’s earnings of $4.00 per share in first-quarter 2022 beat the Zacks Consensus Estimate of $3.68. The figure was up 14.3% from earnings of $3.50 reported in the prior-year quarter.
Net sales grew 7.1% to $1,097.8 million and beat the Zacks Consensus Estimate of $1,053 million. The uptick can be attributed to organic sales growth of 8% and $8.5 million of contributions from acquisitions, somewhat offset by $15.7 million of negative impacts of foreign-currency translations.
The top line also advanced 19.1% from the first-quarter 2019 figure, driven by organic sales growth of 16.9%.
SnapOn Incorporated Price, Consensus and EPS Surprise
SnapOn Incorporated price-consensus-eps-surprise-chart | SnapOn Incorporated Quote
The gross profit was $534.3 million, up 4% year over year, while the gross margin contracted 150 basis points (bps) year over year to 48.6% in the reported quarter.
The company’s operating earnings before financial services totaled $223.1 million, up 11.1% year over year. The metric, as a percentage of sales, expanded 70 bps to 20.3% in the quarter under review. Financial Services’ operating earnings were $70.4 million in the quarter.
Consolidated operating earnings were $293.5 million, up 10.3% year over year. As a percentage of sales, operating earnings expanded 90 bps to 24.8%.
Segmental Details
Sales in Commercial & Industrial Group decreased 1.6% from the prior-year quarter to $340.1 million, driven by organic sales growth of 1.1%, which was more than offset by a negative currency impact of $9.2 million. Organic growth was aided by higher sales in the segment’s Asia Pacific operations, offset by declines in critical industries.
The Tools Group segment’s sales rose 7.1% year over year to $512.1 million, driven by organic sales growth of 7.7%, offset by a $3-million negative impact of foreign currency. Robust activity in the U.S. franchise business, offset by the drab international operations, aided organic sales.
Sales in Repair Systems & Information Group advanced 14.6% year over year to $398.2 million. Organic sales in the segment rose 13.3% from the year-ago quarter, along with gains of $8.5 million from acquisitions aided sales. This was somewhat offset by a $3.6-million negative impact from foreign currency. Strength in diagnostics and repair information products to independent repair shop owners and managers, a rise in sales of under-car equipment, and higher activity with OEM dealerships contributed to segment organic sales growth.
The Financial Services business reported revenues of $87.7 million, down from $88.6 million in the year-ago quarter.
Financials
As of Apr 2, 2022, Snap-on’s cash and cash equivalents totaled $861.1 million, with long-term debt of $1,183.2 million and $4,298.3 million in shareholders’ equity. It incurred $20.2 million of capital expenditure in first-quarter 2022.
Looking Ahead
Though Snap-on has shown resilience, the Zacks Rank #3 (Hold) company expects continued impacts from potential threats of new COVID-19 variants and supply-chain headwinds for 2022. It remains focused on expanding the customer base, particularly in the automotive repair and critical industries. As a result, the capital expenditure for 2022 is projected to be $90-$100 million. It expects an effective tax rate of 23-24% for 2022.
Stocks to Consider
Some better-ranked companies from the Consumer Discretionary sector are GIII Apparel Group (GIII - Free Report) , Gildan Activewear (GIL - Free Report) and Toro (TTC - Free Report) .
GIII Apparel currently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 160.6% on average. The GIII stock has gained 11.6% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GIII Apparel's current financial year’s sales and earnings per share suggests growth of 8.7% and 5.2%, respectively, from the year-ago period's reported numbers.
Gildan Activewear presently flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 66.6%, on average. Shares of GIL have declined 4.7% in the past three months.
The Zacks Consensus Estimate for Gildan Activewear’s current financial-year sales and earnings suggests growth of 8.9% and 3.3% from the year-ago period’s reported numbers, respectively.
Toro currently carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 7.3%, on average. Shares of TTC have declined 8% in the past three months.
The Zacks Consensus Estimate for Toro’s current financial year’s sales and earnings suggests growth of 12.5% and 11.6%, respectively, from the year-ago period's reported numbers.