Snap-on Posted a Solid Third Quarter, Showing Auto Repair Demand Remains Healthy

U.S. auto repair demand remained solid in the quarter, as autos continue to be affected by the chip shortage. Consumers have been forced to hang on to vehicles a lot longer than normal, evidenced by the high average fleet age of vehicles—over 12 years currently. As vehicles age, they require more repairs to stay on roadways. A key beneficiary of this trend has been narrow-moat Snap-on. In the quarter, the company reported sales of $1.1 billion, increasing 6% year over year. Gross profit declined about 190 basis points to 48.3%, mainly due to higher material costs. That said, solid pricing and volume growth slightly offset the dilutive impact of supply chain constraints.