Snap-on Inc

Snap-on is a leading global innovator, manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions for professional users performing critical tasks including those working in vehicle repair, aerospace, the military, natural resources, and manufacturing. Products and services are sold through the company's network of widely recognized franchisee vans as well as through direct and distributor channels, under a variety of notable brands. The company also provides financing programs to facilitate the sales of its products and to support its franchise business. Snap-on markets its products and brands worldwide in more than 130 countries ¹. Snap-on's largest geographic market is the United States. In addition, Snap-on has a meaningful presence across continental Europe and in the Asia Pacific region, as well as in Canada and the United Kingdom.

Snap-on competes on the basis of its product quality and performance, product line breadth and depth, service, brand awareness and imagery, technological innovation and availability of financing (through SOC or its international finance subsidiaries). While Snap-on does not believe that any single company competes with it across all of its product lines and distribution channels, various companies compete in one or more product categories and/or distribution channels. Snap-on is a leading manufacturer and distributor of professional tools, tool storage, diagnostics, equipment products, and repair software and solutions, offering a broad line of these products to both vehicle service and industrial marketplaces. Major competitors selling diagnostics, shop equipment, and information to vehicle dealerships and independent repair shops include OEMs and their proprietary electronic parts catalogs and diagnostics and information systems, and other companies that offer products serving this sector.

Snap-on generates revenue from the sale of tools, diagnostics, information and management systems, and equipment, as well as from financial services revenue from various financing programs. The company's primary customer segments include: (i) commercial and industrial customers, including professionals in critical industries and in emerging markets; (ii) professional vehicle repair technicians who purchase products through the company's multinational mobile tool distribution network; and (iii) other professional customers related to vehicle repair, including owners and managers of independent service and repair shops, as well as OEM dealership service and repair shops. Snap-on's Financial Services customer segment includes: (i) franchisees' customers, principally serving vehicle repair technicians, and Snap-on customers who require financing for the purchase or lease of tools, diagnostics, and equipment products on an extended-term payment plan; and (ii) franchisees who require financing options for vehicle and business needs.

Snap-on offers a broad line of products and complementary services that are grouped into three product categories: (i) tools; (ii) diagnostics, information and management systems; and (iii) equipment. The tools product category includes hand tools, power tools, tool storage products and other similar products. For many industrial customers, Snap-on creates specific, engineered solutions, including facility-level tool control and asset management hardware and software, custom kits in a wide range of configurations, and custom-built tools designed to meet customer requirements. The diagnostics, information and management systems product category includes handheld and computer-based diagnostic products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems and services, point-of-sale systems, integrated systems for vehicle service shops, OEM purchasing facilitation services, and warranty management systems and analytics to help OEM dealerships manage and track performance. The equipment product category includes solutions for the service of vehicles and industrial equipment, including wheel alignment equipment, wheel balancers, tire changers, vehicle lifts, test lane equipment, collision repair equipment, vehicle air conditioning service equipment, brake service equipment, fluid exchange equipment, transmission troubleshooting equipment, safety testing equipment, battery chargers and hoists. Net sales of tools were $2,541.9 million ² in 2025, compared to $2,546.2 million ³ in 2024. Net sales of diagnostics, information and management systems were $1,112.2 million ⁴ in 2025, compared to $1,028.1 million ⁵ in 2024. Net sales of equipment were $1,089.1 million ⁶ in 2025, compared to $1,133.1 million ⁷ in 2024.

Financial Services generates revenue from various financing programs that include: (i) installment sales and lease contracts arising from franchisees' customers and Snap-on customers who require financing for the purchase or lease of tools, diagnostics, and equipment products on an extended-term payment plan; and (ii) business and vehicle loans and leases to franchisees. Financing revenue is recognized over the life of the underlying contracts, with interest or finance charges computed primarily on the average daily balances of the underlying contracts. Financial services revenue was $412.9 million ⁸ in 2025, compared to $401.0 million ⁹ in 2024. Originations were $1,120.9 million ¹⁰ in 2025, compared to $1,182.9 million ¹¹ in 2024. The average yields on finance receivables were 17.6% ¹² in 2025 and 17.7% ¹³ in 2024. The average yields on contract receivables were 9.1% ¹⁴ in 2025 and 9.0% ¹⁵ in 2024.

During the fourth quarter of 2025, Snap-on refined its footprint and aspects of its go-to-market strategy within the Commercial & Industrial Group. These activities included the sale of a building for a net gain of $15.9 million ¹⁶, the retirement of certain trademarks at a cost of $8.9 million ¹⁷, and restructuring charges of $2.5 million ¹⁸ (collectively, the "2025 footprint actions"). The 2025 footprint actions resulted in a net benefit to operating expenses of $4.5 million ¹⁹. In 2025, Snap-on repurchased 987,000 ²⁰ shares of its common stock for $328.6 million ²¹ under its previously announced share repurchase programs. As of 2025 year end, Snap-on had remaining availability to repurchase up to an additional $260.0 million ²² in common stock pursuant to its Board's authorizations. Cash dividends paid in 2025 totaled $462.2 million ²³. On November 6, 2025, the company announced that its Board increased the quarterly cash dividend by 14.0% ²⁴ to $2.44 per share ²⁵ ($9.76 per share annualized ²⁶).

Consolidated net sales of $4,743.2 million ²⁷ in 2025 represented an increase of $35.8 million ²⁸, or 0.8% ²⁹, from 2024 levels, reflecting a $16.5 million ³⁰, or 0.3% ³¹, organic sales gain and $19.3 million ³² of favorable foreign currency translation. Operating earnings before financial services of $1,045.9 million ³³ in 2025, including a $22.0 million ³⁴ benefit from the settlement of a legal matter, compared to $1,068.8 million ³⁵ in 2024, which included a $22.5 million ³⁶ benefit for the final payments received associated with a separate legal matter. Net earnings attributable to Snap-on of $1,016.9 million ³⁷, or $19.19 per diluted share ³⁸, in 2025, included a $16.2 million ³⁹, or $0.31 per diluted share ⁴⁰, after-tax benefit from the 2025 legal settlement and an $18.5 million ⁴¹, or $0.35 per diluted share ⁴², after-tax year-over-year increase in non-service net periodic benefit costs. Net earnings attributable to Snap-on of $1,043.9 million ⁴³, or $19.51 per diluted share ⁴⁴, in 2024, included a $17.5 million ⁴⁵, or $0.32 per diluted share ⁴⁶, after-tax benefit from the 2024 legal payments.

Snap-on currently anticipates that its full-year 2026 effective income tax rate will be in the range of 22% to 23% ⁴⁷.

Snap-on expects to make ongoing progress along its decisive runways for coherent growth, leveraging capabilities already proven in the automotive repair arena, 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 are high. The Repair Systems & Information Group intends to focus on extending the product offering with new products and services, continuing software and hardware upgrades to further improve functionality, performance and efficiency, further building proprietary databases to enhance software solutions, including using artificial intelligence (AI) to accelerate expansion in that arena, advancing productivity through RCI initiatives and the optimization of resources, and increasing geographic penetration, including in emerging markets.

The Snap-on Tools Group intends to focus on enhancing franchisee sales productivity, profitability, commercial health, and satisfaction; developing new programs and products to match current technician preferences, reaching new customers and increasing penetration with existing customers; expanding investment in new product innovation and development; and improving customer service levels and productivity in back office support functions, manufacturing and the supply chain through RCI initiatives and capacity investment. The Commercial & Industrial Group intends to focus on expanding its business with existing customers and reaching new customers in critical industries and other market segments; leveraging its investments in emerging markets to support growth initiatives; broadening its product offering designed particularly for critical industry segments; increasing its customer-connection-driven understanding of work across multiple industries; investing in innovation that, guided by that understanding of work, delivers an ongoing stream of productivity-enhancing custom-engineered solutions; and continuing to reduce structural and operating costs, as well as improve efficiencies, through RCI initiatives.

Snap-on expects pension expense of approximately $10.3 million ⁴⁸ in 2026, primarily reflecting lower amortization of pension actuarial losses. To determine the 2026 net periodic benefit cost, Snap-on is using weighted-average discount rates for its domestic and foreign pension plans of 5.5% ⁴⁹ and 4.9% ⁵⁰, respectively, and an expected return on plan assets for its domestic pension plans of 7.5% ⁵¹. The expected returns on plan assets for foreign pension plans ranged from 2.2% to 6.7% ⁵² as of 2025 year end.

Snap-on projects that capital expenditures in 2026 will approximate $100 million ⁵³. Snap-on intends to make contributions of $4.5 million ⁵⁴ to its foreign pension plans and $3.7 million ⁵⁵ to its domestic pension plans in 2026, as required by law. Depending on market and other conditions, Snap-on may make additional discretionary cash contributions to its pension plans in 2026.

Snap-on projects that capital expenditures in 2026 will approximate $100 million ⁵⁶. Snap-on intends to make contributions of $4.5 million ⁵⁷ to its foreign pension plans and $3.7 million ⁵⁸ to its domestic pension plans in 2026, as required by law. Depending on market and other conditions, Snap-on may make additional discretionary cash contributions to its pension plans in 2026.

The company's business is subject to risks related to, among other factors, tariffs and additional trade protection measures put in place by the United States or other countries, as well as U.S. international trade relations, including those with China, Canada, the European Union and other nations. Starting in the first quarter of 2025, the United States government announced additional tariffs on goods imported into the U.S. from numerous countries and multiple nations countered with reciprocal tariffs and other actions in response. While the company is relatively advantaged in the tariff environment, generally manufacturing products in the markets where they are sold, its costs can be affected by trade policies. In that regard, in the fourth quarter and for the year ended January 3, 2026, Snap-on mitigated the effects of incremental tariffs.

Approximately 29% ⁵⁹ of our revenues in 2025 were generated outside of the United States. Future growth rates and success of our business depends in large part on continued growth in our non-U.S. operations, including growth in emerging markets and critical industries. Numerous risks and uncertainties affect our non-U.S. operations, including political, economic and social instability, such as acts of war, armed conflicts, civil disturbance or acts of terrorism, local labor conditions, and adverse changes in trade relations with China, Canada, the European Union and other nations.

The performance of Snap-on's mobile tool distribution business depends on the success of its franchisees, as approximately 38% ⁶⁰ of consolidated net revenues in 2025 were generated by the Snap-on Tools Group, which consists of Snap-on's business operations primarily serving vehicle service and repair technicians through the company's multinational mobile tool distribution channel. If franchisees are not successful, or if effective relationships are not maintained, the delivery of products, the collection of receivables and/or the relationship with end users could be adversely affected. The global tool, equipment, diagnostics, and repair information industries are competitive, and price competition is intense. Snap-on faces strong competition in all of its market segments, and any inability to maintain customer satisfaction could diminish Snap-on's premium image and reputation and could result in a lessening of its ability to command premium pricing. Foreign operations are subject to political, economic, trade and other risks, as approximately 29% ⁶¹ of revenues in 2025 were generated outside of the United States. These risks include political and economic instability, changes in trade relations, tariffs, sanctions, currency volatility, and supply chain inefficiencies. The company's inability to provide acceptable financing alternatives to franchisees and other end-user customers could adversely impact operating results, as an integral component of its business and profitability is the ability to offer competitive financing alternatives. Adverse fluctuations in interest rates and/or the ability to provide competitive financing programs could also have an adverse impact on revenue and profitability.

Management's message emphasizes that the company's 2025 operating performance demonstrates the advantages inherent in its strategy, generally making in the markets where we sell, and in its structure, its ability to produce many of its solutions in most geographies by leveraging its 36 manufacturing facilities worldwide, including its 15 plants in the United States. Despite the complexities of the current macroeconomic and trade environments, management believes the special resilience of its markets, the considerable capability of its combined operations, and its experienced team enable it to prevail in the difficulties of today. Management states that throughout the recent uncertainty, it maintained and further extended its ongoing advantages in its products, in its brands and in its people. The strategic priorities emphasized for the period ahead include continuing to build on the Snap-on Value Creation Processes – the suite of strategic principles and processes employed every day designed to create value, and employed in the areas of safety, quality, customer connection, innovation and Rapid Continuous Improvement (RCI). Management expects to continue to deploy these processes in existing operations as well as into more recently acquired businesses. Snap-on currently anticipates that its full-year 2026 effective income tax rate will be in the range of 22% to 23% ⁶².