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Will Snap-on (SNA) Beat on Q3 Earnings Despite Inflation Woes?
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Snap-on Incorporated (SNA - Free Report) is slated to release its third-quarter 2023 results on Oct 19, before market open. The company is likely to record top and bottom-line growth when it posts third-quarter results.
The Zacks Consensus Estimate for third-quarter earnings is pegged at $4.43 per share, suggesting growth of 7% from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days. The consensus estimate for quarterly revenues is pegged at $1.14 billion, indicating a rise of 3.7% from the year-ago quarter’s actual.
In the last reported quarter, the company posted an earnings surprise of 8%. SNA has a trailing four-quarter earnings surprise of 9.3%, on average.
Snap-On Incorporated Price, Consensus and EPS Surprise
Snap-on has been focused on several growth strategies. These include enhancing the franchise network, improving relationships with repair shop owners and managers, and expanding into critical industries in emerging markets.
Our model estimates sales growth of 1.6% for Commercial & Industrial Group, 3% for Snap-on Tools Group, and 4.4% for Repair Systems & Information Group in the third quarter. We expect year-over-year consolidated organic revenue growth of 4% for the third quarter, driven by a 3.6% rise in Commercial & Industrial Group, 4% growth in Snap-on Tools Group, and 5.4% growth in Repair Systems & Information Group.
The company's emphasis on its Rapid Continuous Improvement (RCI) process has been aimed at enhancing organizational effectiveness, reducing costs, and boosting sales and margins. Savings from the RCI initiative come from continuous productivity and process improvement plans. The company has also been investing in new products and increasing brand awareness globally.
Management is dedicated to harnessing its strengths within the automotive repair sector and extending its customer reach, with a particular emphasis on automotive repair and vital industries. With these strategies in place, the company anticipates a capital expenditure of $100 million in 2023.
We expect SNA’s gross margin to expand 90 basis points (bps) to 49.2% in the third quarter, while the operating margin is likely to expand 30 bps year over year to 26.6%.
However, Snap-on has been facing ongoing challenges due to macroeconomic headwinds, which will likely persist throughout 2023. The company has been grappling with the impacts of rising cost inflation, primarily driven by increased raw material expenses and other related costs. These factors are expected to have partly hurt the company's profitability in the to-be-reported quarter.
We expect the company’s operating expenses to increase 4.3% year over year to $322.4 million in the third quarter mainly due to elevated costs. As a percentage of sales, we expect operating expenses to increase 50 bps year over year to 28.5% in the third quarter.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Snap-on this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Snap-on has a Zacks Rank #3 and an Earnings ESP of 0.00%.
Stocks Poised to Beat Earnings Estimates
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Caesars Entertainment (CZR - Free Report) currently has an Earnings ESP of +37.22% and a Zacks Rank #2. CZR is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.92 billion, suggesting 1% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Caesars Entertainment’s third-quarter earnings is pegged at 26 cents, suggesting 8.3% growth from the 24 cents reported in the year-ago quarter. The consensus mark has moved up by 2 cents in the past 30 days.
Marriott International (MAR - Free Report) currently has an Earnings ESP of +1.59% and a Zacks Rank #3. MAR is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $5.91 billion, suggesting 11.2% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Marriott’s third-quarter earnings is pegged at $2.09, suggesting year-over-year growth of 23.8%. The consensus mark has moved up by a penny in the past 30 days.
Cinemark Holdings (CNK - Free Report) currently has an Earnings ESP of +70.56% and a Zacks Rank #3. Cinemark Holdings is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $798.6 million, suggesting 22.8% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Cinemark Holdings’ third-quarter earnings is pegged at 33 cents, suggesting 265% growth from that reported in the year-ago quarter. The consensus mark has moved up by a penny in the past 30 days.
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Will Snap-on (SNA) Beat on Q3 Earnings Despite Inflation Woes?
Snap-on Incorporated (SNA - Free Report) is slated to release its third-quarter 2023 results on Oct 19, before market open. The company is likely to record top and bottom-line growth when it posts third-quarter results.
The Zacks Consensus Estimate for third-quarter earnings is pegged at $4.43 per share, suggesting growth of 7% from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days. The consensus estimate for quarterly revenues is pegged at $1.14 billion, indicating a rise of 3.7% from the year-ago quarter’s actual.
In the last reported quarter, the company posted an earnings surprise of 8%. SNA has a trailing four-quarter earnings surprise of 9.3%, on average.
Snap-On Incorporated Price, Consensus and EPS Surprise
Snap-On Incorporated price-consensus-eps-surprise-chart | Snap-On Incorporated Quote
Key Factors to Note
Snap-on has been focused on several growth strategies. These include enhancing the franchise network, improving relationships with repair shop owners and managers, and expanding into critical industries in emerging markets.
Our model estimates sales growth of 1.6% for Commercial & Industrial Group, 3% for Snap-on Tools Group, and 4.4% for Repair Systems & Information Group in the third quarter. We expect year-over-year consolidated organic revenue growth of 4% for the third quarter, driven by a 3.6% rise in Commercial & Industrial Group, 4% growth in Snap-on Tools Group, and 5.4% growth in Repair Systems & Information Group.
The company's emphasis on its Rapid Continuous Improvement (RCI) process has been aimed at enhancing organizational effectiveness, reducing costs, and boosting sales and margins. Savings from the RCI initiative come from continuous productivity and process improvement plans. The company has also been investing in new products and increasing brand awareness globally.
Management is dedicated to harnessing its strengths within the automotive repair sector and extending its customer reach, with a particular emphasis on automotive repair and vital industries. With these strategies in place, the company anticipates a capital expenditure of $100 million in 2023.
We expect SNA’s gross margin to expand 90 basis points (bps) to 49.2% in the third quarter, while the operating margin is likely to expand 30 bps year over year to 26.6%.
However, Snap-on has been facing ongoing challenges due to macroeconomic headwinds, which will likely persist throughout 2023. The company has been grappling with the impacts of rising cost inflation, primarily driven by increased raw material expenses and other related costs. These factors are expected to have partly hurt the company's profitability in the to-be-reported quarter.
We expect the company’s operating expenses to increase 4.3% year over year to $322.4 million in the third quarter mainly due to elevated costs. As a percentage of sales, we expect operating expenses to increase 50 bps year over year to 28.5% in the third quarter.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Snap-on this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Snap-on has a Zacks Rank #3 and an Earnings ESP of 0.00%.
Stocks Poised to Beat Earnings Estimates
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Caesars Entertainment (CZR - Free Report) currently has an Earnings ESP of +37.22% and a Zacks Rank #2. CZR is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.92 billion, suggesting 1% growth from the figure reported in the prior-year quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Caesars Entertainment’s third-quarter earnings is pegged at 26 cents, suggesting 8.3% growth from the 24 cents reported in the year-ago quarter. The consensus mark has moved up by 2 cents in the past 30 days.
Marriott International (MAR - Free Report) currently has an Earnings ESP of +1.59% and a Zacks Rank #3. MAR is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $5.91 billion, suggesting 11.2% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Marriott’s third-quarter earnings is pegged at $2.09, suggesting year-over-year growth of 23.8%. The consensus mark has moved up by a penny in the past 30 days.
Cinemark Holdings (CNK - Free Report) currently has an Earnings ESP of +70.56% and a Zacks Rank #3. Cinemark Holdings is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $798.6 million, suggesting 22.8% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Cinemark Holdings’ third-quarter earnings is pegged at 33 cents, suggesting 265% growth from that reported in the year-ago quarter. The consensus mark has moved up by a penny in the past 30 days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.