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Snap-on Inc SNA

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Snap-on’s Third-Quarter Results Show Auto Repair Demand Remains Resilient; FVE Up 2% to $171

Dawit Woldemariam Equity Analyst

Analyst Note

| Dawit Woldemariam |

Snap-on reported solid third-quarter results that were slightly above our expectations. Net sales increased 10% year over year to $1.03 billion, thanks to sustained growth across the company’s segments following the pandemic. The commercial and industrial segment was hit hard by the pandemic, while auto repair demand was relatively resilient in the back half of 2020. In the quarter, C&I posted nearly 14% sales growth, showing that the impact from the COVID-19 pandemic continues to ease. The tools segment grew nearly 5%, given the year-ago period was a tough comparison (up nearly 17% in the third quarter of 2020). The repair systems and information segment also showed strong growth, up almost 15% year over year. The segment was up in the quarter largely due to strong double-digit sales in diagnostic and repair equipment, in addition to undercar equipment.

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Company Profile

Business Description

Snap-on is a manufacturer of premium tools and software for professional technicians. Hand tools are sold through franchisee-operated mobile vans that serve auto technicians who purchase tools at their own expense. A unique element of its business model is that franchisees bear significant risk, as they must invest in the mobile van, inventory, and software. At the same time, franchisees extend personal credit directly to technicians on an individual tool basis. Snap-on currently operates three segments—repair systems and information, commercial and industrial, and tools. The company’s finance arm provides financing to franchisees to run their operations, which includes offering loans and leases for mobile vans.

2801 80th Street
Kenosha, WI, 53143
T +1 262 656-5200
Sector Industrials
Industry Tools & Accessories
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 12,300