Snap-on Incorporated (NYSE: SNA), a global leader in tools, equipment, diagnostics, and repair solutions for professionals, has released its first-quarter 2024 operating results. In Q1 2024, net sales totaled $1,182.3 million, a marginal decrease of $0.7 million (0.1%) compared to 2023. This decline primarily resulted from a $9.9 million (0.8%) decrease in organic sales, partially offset by $6.7 million from acquisitions and $2.5 million from favorable foreign currency translation.
Operating earnings before financial services for the quarter reached $270.9 million, up from $259.8 million in 2023, with an operating margin of 22.9%, compared to 22.0% last year.
Financial services revenue in the quarter amounted to $99.6 million, up from $92.6 million in 2023, with operating earnings of $68.3 million, compared to $66.3 million last year.
Consolidated operating earnings for the quarter stood at $339.2 million, or 26.5% of revenues, compared to $326.1 million, or 25.6% of revenues, in 2023.
The effective income tax rate for Q1 2024 was 22.2%, down from 23.1% in 2023.
Net earnings for the quarter totaled $263.5 million, or $4.91 per diluted share, compared to $248.7 million, or $4.60 per diluted share, in the previous year. These figures include a $11.3 million benefit from a legal matter in operating earnings before financial services and consolidated operating earnings, and an $8.8 million after-tax benefit in net earnings.
Nick Pinchuk, Chairman and CEO of Snap-on, expressed satisfaction with the Q1 2024 results, highlighting the company’s growth despite prevailing uncertainties. He emphasized the importance of adapting to technician preferences, maintaining momentum with repair shops and critical industries, and introducing significant new products.
Segment Results:
- Commercial & Industrial Group: Sales totaled $359.9 million, with operating earnings of $55.4 million.
- Snap-on Tools Group: Sales amounted to $500.1 million, with operating earnings of $117.3 million.
- Repair Systems & Information Group: Sales reached $463.8 million, with operating earnings of $112.9 million.
Financial Services recorded operating earnings of $68.3 million on revenue of $99.6 million.
Corporate expenses in Q1 were $14.7 million, including a benefit from the legal payment, compared to $32.3 million in the previous year.
Looking ahead, Snap-on expects ongoing progress in 2024, leveraging its capabilities in automotive repair and expanding into adjacent markets and additional geographies. Capital expenditures for 2024 are projected to be $100 million to $110 million.
The company anticipates an effective income tax rate for the full year 2024 in the range of 22% to 23%.
A conference call and webcast discussing these results will be held on April 18, 2024, at 9:00 a.m. Central Time. A replay will be available for at least 10 days following the call.
Non-GAAP Measures:
Snap-on defines “organic sales” as sales from continuing operations adjusted to exclude acquisition-related sales and the impact of foreign currency translation. Management believes this measure provides useful information for identifying underlying growth trends.
