SNA | Q4 2024

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Overview

• Non-GAAP EPS of $4.82 beats by $0.03.

• Revenue of $1.2B in-line (flat Y/Y).

Takeaways

Snap-on (SNA) wrapped up 2024 on a good note, posting steady results despite some uncertainty in the market.

The company brought in $1.2 billion in sales, a small but positive increase from last year.

Profitability remained strong, with its operating margin hitting an all-time high for the fourth quarter at 22.1%, while earnings per share (EPS) rose to $4.82, up from $4.75 last year.

A big bright spot this quarter was Snap-on’s Commercial & Industrial (C&I) division, which had its best Q4 sales ever at $379.2 million.

Demand was especially strong for specialized torque tools, which are used in industries like aviation, oil and gas, and heavy machinery. The company’s ability to develop high-quality, precision tools is paying off, leading to better sales and profitability in this segment.

The Repair Systems & Information (RS&I) business also had a strong quarter, with sales reaching $456.6 million, driven by increased demand from auto dealerships and repair shops.

More shops are relying on Snap-on’s diagnostic tools and software to handle today’s increasingly complex cars, and the company’s Mitchell 1 software division continues to expand its database, which now holds over 3 billion repair records. This kind of data advantage creates a network effect for the company and is key to keeping Snap-on ahead of the competition.

The Tools Group, which sells directly to mechanics through Snap-on’s well-known franchise network, had more of a mixed quarter.

Sales dipped slightly to $506.6 million, as demand for larger, high-cost tool storage units remained weak. However, smaller, everyday tools that help mechanics work faster are still selling well, especially internationally.

Despite the challenges, Snap-on continues to invest in its franchisees, earning recognition as one of the top franchises for veterans and maintaining strong support within its dealer network.

CEO Nick Pinchuk emphasized that the vehicle repair industry is only getting more complex, with electric vehicles (EVs), hybrid systems, and advanced driver-assist features making repairs more difficult. Snap-on is well-positioned to benefit from this trend, thanks to its high-tech tools and data-driven solutions that help technicians diagnose and fix problems efficiently.

Back to the financials, the company generated $293.5 million in free cash flow, which allowed it to continue rewarding shareholders through dividends and share buybacks.

Overall, Snap-on ended the year on a strong note, with record-high profitability in key areas and a business that continues to adapt to shifting market demands. While sales in the franchise tool network have room to improve, the company’s ability to pivot toward high-demand tools, diagnostics, and software solutions continues to position Snap-on for long-term success.

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