Snap-On Q2: Earnings Beat, 5% Topline Growth & More

Snap-On Inc (NYSE: SNA) reported second-quarter FY23 sales growth of 4.8% year-on-year to $1.191 billion, marginally beating the analyst consensus of $1.19 billion.

The revenue increase reflected a $63.0 million, or 5.6%, organic sales gain, partially offset by $8.3 million of unfavorable foreign currency translation.

Segment Sales: Commercial & Industrial Group climbed 3%, Snap-on Tools Group rose 1.1% and Repair Systems & Information Group increased 8.5%, all on an organic basis.

Gross profit for the quarter gained 9% to 603.7 million, and the gross margin expanded 190 basis points to 50.6%.

Operating income for the quarter increased 10.2% to $343.9 million and the operating margin expanded 130 basis points to 26.8%.

EPS of $4.89 beat the analyst consensus of $4.56, a 14.5% increase from last year.

Snap held $871.3 million in cash and equivalents as of July 1, 2023. Operating cash flow totaled $270.3 million.

Long-term debt as of July 1, 2023, was $1.18 billion.

Outlook: Snap sees FY23 capital expenditures of approximately $100 million.

It anticipates an FY23 effective income tax rate of 23% to 24%.

Price Action: SNA shares closed lower by 0.26% at $294.31 on Wednesday.