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Snap-on Inc. (SNA - Free Report) has posted second-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 a continued positive business momentum and contributions from its Value Creation plan.
Management also remains on track with its Rapid Continuous Improvement process and other cost-reduction initiatives.
Shares of the Zacks Rank #2 (Buy) company have lost 6.5% in the past three months compared with the industry's 4.4% decline.
Image Source: Zacks Investment Research
Q2 Highlights
Snap-on’s earnings of $4.27 per share in second-quarter 2022 beat the Zacks Consensus Estimate of $3.91 and improved 13.6% from earnings of $3.76 reported in the prior-year quarter.
Net sales grew 5.1% to $1,136.6 million and beat the Zacks Consensus Estimate of $1,101 million. The increase can be attributed to organic sales growth of 8.4%. This was somewhat offset by $32.4 million of negative impacts of foreign-currency translations.
The gross profit of $553.5 million improved 1.9% year over year, while the gross margin contracted 150 basis points (bps) year over year to 48.7% in the reported quarter.
The company’s operating earnings before financial services totaled $246.6 million, up 13.6% year over year. As a percentage of sales, operating earnings before financial services expanded 160 bps to 21.7% in the second quarter. Financial Services' operating earnings were $65.3 million in the quarter, down 5.2% year over year.
Consolidated operating earnings (including financial services) were $311.9 million, up 9.1% year over year. As a percentage of sales, operating earnings expanded 100 bps to 25.5%.
SnapOn Incorporated Price, Consensus and EPS Surprise
Sales in Commercial & Industrial Group rose 2.5% from the prior-year quarter to $359.1 million, driven by organic sales growth of 7.6%. This was partly offset by a negative currency impact of $16.7 million. Organic growth was aided by higher sales in the segment’s Europe-based hand tools business and Asia Pacific operations. Organic sales also benefited from sales growth in critical industries.
The Tools Group segment’s sales rose 7.5% year over year to $520.6 million, driven by organic sales growth of 9.3%, offset by a $7.7-million negative impact of foreign currency. Robust sales in both U.S. franchise business and international operations aided organic sales.
Sales in Repair Systems & Information Group advanced 4.6% year over year to $416.8 million, with organic sales growth of 7%. Sales gains were somewhat offset by a $9.2-million negative impact from foreign currency. Strength in diagnostics and repair information products to independent repair shop owners and managers, and a rise in sales of under-car equipment contributed to segment organic sales growth. Meanwhile, activities with OEM dealerships were flat with last year.
The Financial Services business reported revenues dipped 0.6% year over year to $86.4 million in the quarter.
Financials
As of Jul 2, 2022, Snap-on’s cash and cash equivalents totaled $812.9 million, with long-term debt of $1,183.4 million and $4,324.4 million in shareholders’ equity (before non-controlling interest). It incurred $21.3 million of capital expenditure as of Jul 2, 2022.
Looking Ahead
Though Snap-on has shown resilience, management expects continued impacts from threats of new COVID-19 variants and supply-chain headwinds throughout 2022. The company is progressing well with its growth efforts, focused on expanding its professional 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.
Other Stocks to Consider
Some other top-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 97.5% on average. The GIII stock has declined 22.5% in the past three months.
The Zacks Consensus Estimate for GIII Apparel's current financial year’s sales and earnings per share suggests growth of 24.7% and 33.3%, 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 38.7%, on average. Shares of GIL have declined 17.7% in the past three months.
The Zacks Consensus Estimate for Gildan Activewear’s current financial-year sales and earnings suggests growth of 12.4% and 19.1% from the year-ago period’s reported numbers, respectively.
Toro currently carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 5.3%, on average. Shares of TTC have gained 0.4% in the past three months.
The Zacks Consensus Estimate for Toro’s current financial year’s sales and earnings suggests growth of 21.2% and 22.8%, respectively, from the year-ago period's reported numbers.
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Snap-on (SNA) Q2 Earnings & Sales Beat Amid Cost Headwinds
Snap-on Inc. (SNA - Free Report) has posted second-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 a continued positive business momentum and contributions from its Value Creation plan.
Management also remains on track with its Rapid Continuous Improvement process and other cost-reduction initiatives.
Shares of the Zacks Rank #2 (Buy) company have lost 6.5% in the past three months compared with the industry's 4.4% decline.
Image Source: Zacks Investment Research
Q2 Highlights
Snap-on’s earnings of $4.27 per share in second-quarter 2022 beat the Zacks Consensus Estimate of $3.91 and improved 13.6% from earnings of $3.76 reported in the prior-year quarter.
Net sales grew 5.1% to $1,136.6 million and beat the Zacks Consensus Estimate of $1,101 million. The increase can be attributed to organic sales growth of 8.4%. This was somewhat offset by $32.4 million of negative impacts of foreign-currency translations.
The gross profit of $553.5 million improved 1.9% year over year, while the gross margin contracted 150 basis points (bps) year over year to 48.7% in the reported quarter.
The company’s operating earnings before financial services totaled $246.6 million, up 13.6% year over year. As a percentage of sales, operating earnings before financial services expanded 160 bps to 21.7% in the second quarter. Financial Services' operating earnings were $65.3 million in the quarter, down 5.2% year over year.
Consolidated operating earnings (including financial services) were $311.9 million, up 9.1% year over year. As a percentage of sales, operating earnings expanded 100 bps to 25.5%.
SnapOn Incorporated Price, Consensus and EPS Surprise
SnapOn Incorporated price-consensus-eps-surprise-chart | SnapOn Incorporated Quote
Segmental Details
Sales in Commercial & Industrial Group rose 2.5% from the prior-year quarter to $359.1 million, driven by organic sales growth of 7.6%. This was partly offset by a negative currency impact of $16.7 million. Organic growth was aided by higher sales in the segment’s Europe-based hand tools business and Asia Pacific operations. Organic sales also benefited from sales growth in critical industries.
The Tools Group segment’s sales rose 7.5% year over year to $520.6 million, driven by organic sales growth of 9.3%, offset by a $7.7-million negative impact of foreign currency. Robust sales in both U.S. franchise business and international operations aided organic sales.
Sales in Repair Systems & Information Group advanced 4.6% year over year to $416.8 million, with organic sales growth of 7%. Sales gains were somewhat offset by a $9.2-million negative impact from foreign currency. Strength in diagnostics and repair information products to independent repair shop owners and managers, and a rise in sales of under-car equipment contributed to segment organic sales growth. Meanwhile, activities with OEM dealerships were flat with last year.
The Financial Services business reported revenues dipped 0.6% year over year to $86.4 million in the quarter.
Financials
As of Jul 2, 2022, Snap-on’s cash and cash equivalents totaled $812.9 million, with long-term debt of $1,183.4 million and $4,324.4 million in shareholders’ equity (before non-controlling interest). It incurred $21.3 million of capital expenditure as of Jul 2, 2022.
Looking Ahead
Though Snap-on has shown resilience, management expects continued impacts from threats of new COVID-19 variants and supply-chain headwinds throughout 2022. The company is progressing well with its growth efforts, focused on expanding its professional 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.
Other Stocks to Consider
Some other top-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 97.5% on average. The GIII stock has declined 22.5% 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 24.7% and 33.3%, 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 38.7%, on average. Shares of GIL have declined 17.7% in the past three months.
The Zacks Consensus Estimate for Gildan Activewear’s current financial-year sales and earnings suggests growth of 12.4% and 19.1% from the year-ago period’s reported numbers, respectively.
Toro currently carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 5.3%, on average. Shares of TTC have gained 0.4% in the past three months.
The Zacks Consensus Estimate for Toro’s current financial year’s sales and earnings suggests growth of 21.2% and 22.8%, respectively, from the year-ago period's reported numbers.