Snap-on Inc. reports near 5% uptick in Q2 sales
Snap-on Inc. reported net sales of $1,191.3 million in the second quarter of 2023, which represented an increase of $54.7 million, or 4.8%, from 2022 levels, reflecting a $63.0 million, or 5.6%, organic sales gain. This was partially offset by $8.3 million of unfavorable foreign currency translation, the company said.
Operating earnings before financial services for the quarter of $277.0 million compared to $246.6 million in 2022. As a percentage of net sales, operating earnings before financial services of 23.3% in the second quarter compared to 21.7% last year, reflecting an improvement of 160 basis points.
Financial services revenue in the quarter of $93.4 million compared to $86.4 million in 2022; financial services operating earnings of $66.9 million compared to $65.3 million last year.
Consolidated operating earnings for the quarter of $343.9 million, or 26.8% of revenues (net sales plus financial services revenue), compared to $311.9 million, or 25.5% of revenues, last year.
The second quarter effective income tax rate was 22.9% in 2023 and 23.8% in 2022.
Net earnings in the quarter of $264.0 million, or $4.89 per diluted share, compared to net earnings of $231.5 million, or $4.27 per diluted share, a year ago.
See “Non-GAAP Measures” below for a definition of, and further explanation about, organic sales.
“Our performance was again encouraging, demonstrating the broad and substantial strength of our enterprise, driving ongoing overall momentum in sales, in profitability, and in earnings, all achieved quarter by quarter in a range of environments,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “Today’s results confirm the wide opportunities along our runways for both growth and improvement. While activity may vary from period to period, we believe we are well positioned in our automotive repair operations, by enhancing the van channel and expanding with repair shop owners and managers, and in our activities outside the garage, by consistently extending our businesses serving critical industries.
"At the same time," he continued, "we also have extraordinary confidence in our Snap-on Value Creation Processes that have authored continuing improvement and have emphatically reaffirmed that power this quarter, delivering earnings advancements of considerable proportion in each of our operating segments. And, we believe that with this proven and effective approach we will maintain that positive trajectory as we proceed on through the days to come. Finally, I want to thank our franchisees and associates worldwide for their steadfast contributions, for their uninterrupted dedication, and for their deep enthusiasm for our path forward.”
Snap-on said it expects to make ongoing progress in 2023 along its defined runways for coherent growth, leveraging capabilities already demonstrated in the automotive repair arena and developing and expanding its professional customer base, not only in automotive repair, but in adjacent markets, additional geographies and other areas, including extending in critical industries, where the cost and penalties for failure can be high. In pursuit of these initiatives, we project that capital expenditures in 2023 will approximate $100 million, of which $48.8 million was incurred in the first six months of the year.
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