We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Snap-on (SNA) Q4 Earnings Surpass Estimates, Sales Miss
Read MoreHide Full Article
Snap-on Inc. (SNA - Free Report) has reported mixed fourth-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate, while sales missed. However, sales and earnings advanced year over year. Results have benefited from the continued positive business momentum and contributions from its Value Creation plan.
Snap-on’s earnings of $4.75 per share in fourth-quarter 2023 surpassed the Zacks Consensus Estimate of $4.46. The figure also improved 7.5% from earnings of $4.42 in the prior-year quarter.
Net sales of the Zacks Rank #2 (Buy) company grew 3.5% year over year to $1,196.6 million and missed the Zacks Consensus Estimate of $1,202.7 million. The increase can be attributed to organic sales growth of 2.2%, $5.5 million of acquisition-related sales, and a $9.1-million positive impact of foreign currency translations.
SNA shares have gained 18.1% in the past year compared with the industry's 4.2% growth.
Image Source: Zacks Investment Research
Q4 Highlights
The gross profit of $577.6 million improved 3% year over year, while the gross margin contracted 20 basis points (bps) year over year to 48.3% in the reported quarter. We expected a gross margin of 48.3%, indicating a gross margin contraction of 20 bps for the fourth quarter.
The company’s operating earnings before financial services totaled $257.9 million, up 4% year over year. As a percentage of sales, operating earnings before financial services expanded 10 bps to 21.6% in the fourth quarter. Financial Services' operating earnings were $67.9 million in the quarter, up 6.3% year over year.
Consolidated operating earnings (including financial services) were $325.8 million, up 4.5% year over year. As a percentage of sales, operating earnings expanded 10 bps year over year to 25.2%.
Snap-On Incorporated Price, Consensus and EPS Surprise
Sales in the Commercial & Industrial Group grew 6% from the prior-year quarter to $363.9 million on organic sales growth of 3.3%. Net sales were also aided by $5.5 million of acquisition-related sales, and $3.6 million of favorable currency translation. Organic sales growth benefited from an increase in activity of customers in critical industries, partially offset by lower power tool volumes. For the quarter, we expected sales of $364.4 million from the segment.
The Tools Group segment’s sales declined 5.4% year over year to $513.3 million, which missed our estimate of $554.4 million. The dip was led by an organic sales decline of 5.7%, partly offset by a $1.6-million positive impact of foreign currency. Organic sales declined on lower activity in the U.S. operations, somewhat negated by higher sales in the segment’s international operations.
Sales in Repair Systems & Information Group advanced 2.9% year over year to $450.8 million, with organic sales growth of 2%. Sales also gained from a $4.1-million positive impact of currency. Higher activity with OEM dealerships and a rise in volumes of undercar equipment contributed to segment organic sales growth. This was partly negated by lower sales of diagnostic and repair information products to independent repair shop owners and managers. Our estimate for sales from this segment was $451.5 million in the quarter.
The Financial Services business’ revenues rose 10.1% year over year to $97.2 million in the quarter. Our estimate for sales from this segment was $92.7 million in the quarter.
Financials
As of Dec 31, 2023, Snap-on’s cash and cash equivalents totaled $1,001.3 million, with shareholders’ equity (before non-controlling interest) of $5,071.3 million. The company incurred $95 million in capital expenditure in 2023.
Looking Ahead
Management expects continued progress by leveraging capabilities in the automotive repair arena, as well as expanding its customer base in automotive repair and across geographies, including critical industries. As a result, capital expenditure for 2024 is projected to be $100-$110 million. The company anticipates an effective tax rate of 22-23% for 2024.
GIII Apparel, a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands, currently sports a Zacks Rank of 1 (Strong Buy). GIII has a trailing four-quarter earnings surprise of 541.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GIII’s fiscal 2024 EPS suggests growth of 39.3% from the year-ago period’s reported level. The consensus estimate for fiscal 2024 sales indicates a decline of 2.4% from the year-ago quarter’s actual.
PVH Corp, a leading lifestyle retailer, currently has a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 18.9%, on average.
The Zacks Consensus Estimate for PVH’s fiscal 2023 sales and EPS indicates year-over-year increases of 1.2% and 16.6%, respectively.
Ralph Lauren, a major designer, marketer and distributor of premium lifestyle products in North America, Europe, Asia, and internationally, carries a Zacks Rank of 2 at present. RL has a trailing four-quarter earnings surprise of 18%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales and EPS suggests growth of 1.6% and 14.2%, respectively, from the year-ago reported figures.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Snap-on (SNA) Q4 Earnings Surpass Estimates, Sales Miss
Snap-on Inc. (SNA - Free Report) has reported mixed fourth-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate, while sales missed. However, sales and earnings advanced year over year. Results have benefited from the continued positive business momentum and contributions from its Value Creation plan.
Snap-on’s earnings of $4.75 per share in fourth-quarter 2023 surpassed the Zacks Consensus Estimate of $4.46. The figure also improved 7.5% from earnings of $4.42 in the prior-year quarter.
Net sales of the Zacks Rank #2 (Buy) company grew 3.5% year over year to $1,196.6 million and missed the Zacks Consensus Estimate of $1,202.7 million. The increase can be attributed to organic sales growth of 2.2%, $5.5 million of acquisition-related sales, and a $9.1-million positive impact of foreign currency translations.
SNA shares have gained 18.1% in the past year compared with the industry's 4.2% growth.
Image Source: Zacks Investment Research
Q4 Highlights
The gross profit of $577.6 million improved 3% year over year, while the gross margin contracted 20 basis points (bps) year over year to 48.3% in the reported quarter. We expected a gross margin of 48.3%, indicating a gross margin contraction of 20 bps for the fourth quarter.
The company’s operating earnings before financial services totaled $257.9 million, up 4% year over year. As a percentage of sales, operating earnings before financial services expanded 10 bps to 21.6% in the fourth quarter. Financial Services' operating earnings were $67.9 million in the quarter, up 6.3% year over year.
Consolidated operating earnings (including financial services) were $325.8 million, up 4.5% year over year. As a percentage of sales, operating earnings expanded 10 bps year over year to 25.2%.
Snap-On Incorporated Price, Consensus and EPS Surprise
Snap-On Incorporated price-consensus-eps-surprise-chart | Snap-On Incorporated Quote
Segmental Details
Sales in the Commercial & Industrial Group grew 6% from the prior-year quarter to $363.9 million on organic sales growth of 3.3%. Net sales were also aided by $5.5 million of acquisition-related sales, and $3.6 million of favorable currency translation. Organic sales growth benefited from an increase in activity of customers in critical industries, partially offset by lower power tool volumes. For the quarter, we expected sales of $364.4 million from the segment.
The Tools Group segment’s sales declined 5.4% year over year to $513.3 million, which missed our estimate of $554.4 million. The dip was led by an organic sales decline of 5.7%, partly offset by a $1.6-million positive impact of foreign currency. Organic sales declined on lower activity in the U.S. operations, somewhat negated by higher sales in the segment’s international operations.
Sales in Repair Systems & Information Group advanced 2.9% year over year to $450.8 million, with organic sales growth of 2%. Sales also gained from a $4.1-million positive impact of currency. Higher activity with OEM dealerships and a rise in volumes of undercar equipment contributed to segment organic sales growth. This was partly negated by lower sales of diagnostic and repair information products to independent repair shop owners and managers. Our estimate for sales from this segment was $451.5 million in the quarter.
The Financial Services business’ revenues rose 10.1% year over year to $97.2 million in the quarter. Our estimate for sales from this segment was $92.7 million in the quarter.
Financials
As of Dec 31, 2023, Snap-on’s cash and cash equivalents totaled $1,001.3 million, with shareholders’ equity (before non-controlling interest) of $5,071.3 million. The company incurred $95 million in capital expenditure in 2023.
Looking Ahead
Management expects continued progress by leveraging capabilities in the automotive repair arena, as well as expanding its customer base in automotive repair and across geographies, including critical industries. As a result, capital expenditure for 2024 is projected to be $100-$110 million. The company anticipates an effective tax rate of 22-23% for 2024.
Other Stocks to Consider
Some other top-ranked companies are GIII Apparel Group (GIII - Free Report) , PVH Corporation (PVH - Free Report) and Ralph Lauren (RL - Free Report) .
GIII Apparel, a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands, currently sports a Zacks Rank of 1 (Strong Buy). GIII has a trailing four-quarter earnings surprise of 541.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GIII’s fiscal 2024 EPS suggests growth of 39.3% from the year-ago period’s reported level. The consensus estimate for fiscal 2024 sales indicates a decline of 2.4% from the year-ago quarter’s actual.
PVH Corp, a leading lifestyle retailer, currently has a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 18.9%, on average.
The Zacks Consensus Estimate for PVH’s fiscal 2023 sales and EPS indicates year-over-year increases of 1.2% and 16.6%, respectively.
Ralph Lauren, a major designer, marketer and distributor of premium lifestyle products in North America, Europe, Asia, and internationally, carries a Zacks Rank of 2 at present. RL has a trailing four-quarter earnings surprise of 18%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales and EPS suggests growth of 1.6% and 14.2%, respectively, from the year-ago reported figures.