Snap-on (NYSE:SNA) reported first-quarter 2026 results that management characterized as resilient in the face of uncertainty, citing higher sales and earnings along with continued investment in new products and technology. CEO Nick Pinchuk pointed to “uncertainty and tariffs, opposing currencies, rising material costs” as headwinds during the quarter, while noting that gross margins “resisted the impacts” and profits remained strong.
Quarterly results and profitability
Net sales rose 5.8% year over year to $1.207 billion, a first-quarter record and the company’s second-highest quarterly sales ever, according to Pinchuk. The increase included 3.4% organic growth and $26.9 million in favorable foreign currency translation, CFO Aldo Pagliari said.
Including financial services, consolidated operating earnings were $318.8 million versus $313.4 million last year, and the operating margin was 24.4% compared with 25.2% in 2025. Net earnings were $247.0 million, or $4.69 per diluted share, up from $240.5 million, or $4.51 per share, a year ago. The effective tax rate was 22.0%.
Market backdrop: vehicle repair strength and “green shoots”
Pinchuk said Snap-on continues to view the vehicle repair environment as “robust” and “extremely favorable,” driven by aging vehicles and increasing complexity. He cited an average vehicle age of 12.8 years and said household spending on vehicle repairs was up “high single digits” in the quarter. He also pointed to higher hours worked by technicians and rising wages as indicators that “vehicle repair is stronger than ever.”
At the same time, management said uncertainty remains elevated, contributing to a preference among technicians for “shorter payback solutions.” Pinchuk said conversations with franchisees suggested “green shoots” in demand, including an uptick in tool storage. “Even with our tool storage rooms, they were up this quarter,” he said, while also cautioning that one quarter is not definitive.
Segment performance: C&I, Tools Group, and RS&I
Commercial & Industrial (C&I): C&I sales increased 10.8% to $381.6 million, including 7.1% organic growth and $11.9 million of favorable currency. Pagliari said the organic increase reflected gains across the segment, including “a high single-digit improvement with customers in critical industries” and a rise in the specialty torque business. He noted higher sales to U.S. and international customers in aviation, heavy duty, and natural resources, while shipments serving military applications were “essentially flat year-over-year” after being down double digits last year, as Pinchuk described.
C&I gross margin fell to 40.3% from 42.6%, which Pagliari said was primarily due to higher tariffs and material costs and 50 basis points of unfavorable currency effects. Operating earnings rose to $54.9 million from $53.2 million, while operating margin declined to 14.4% from 15.5%.
In response to a question on heavy duty, Pinchuk said Snap-on did not see “so much softness” and suggested performance reflected the company “understanding the work” and providing more customized solutions, adding, “we’re also capturing some share in our business.”
Snap-on Tools Group: Tools Group sales were $486.0 million, up from $462.9 million, including 3.4% organic growth and $7.2 million of favorable currency. Pagliari said the organic rise reflected low single-digit gains in both U.S. and international operations. Operating earnings increased to $105.0 million from $92.4 million, and operating margin improved 160 basis points to 21.6%.
Tools Group gross margin rose 140 basis points to 47.7%, which Pagliari said was driven by increased sales and RCI savings, partially offset by higher material and other costs. Pinchuk said the company has been “pivoting to match the customer’s preference for short payback items,” and highlighted demand for tool storage products during the quarter. In Q&A, Pinchuk said hand tools and power tools were up, while diagnostics were “tepid” and “challenged” in the period.
Repair Systems & Information (RS&I): RS&I sales rose 2.0% to $485.3 million, including $9.1 million in favorable currency; organic sales were up slightly. Pinchuk said it was the “highest ever sales quarter” for the group, reflecting increased diagnostic and repair information product sales to independent shop owners and managers, offset by lower sales to OEM dealerships.
RS&I operating earnings decreased to $119.5 million from $122.1 million, and operating margin declined to 24.6% from 25.7%. Pagliari said operating expenses rose as a percentage of sales to 21.4% from 20.0%, driven by unfavorable currency, higher personnel costs, and “expanded technology investments,” including support for “the segment’s growing software-based businesses.” Pinchuk said the company is investing to fortify its proprietary databases, including enhancements using large language models.
Financial services, cash flow, and capital deployment
Financial services revenue was $101.1 million, down from $102.1 million, primarily due to lower interest income stemming from a smaller average portfolio, Pagliari said. Financial services operating earnings declined to $68.0 million from $70.3 million. Loan originations were $264.6 million, down 1.5% year over year. The U.S. 60-day+ delinquency rate for finance receivables was 1.9%, down 10 basis points from the first quarter of 2025 and down 20 basis points sequentially, which Pagliari said reflects typical seasonality.
Operating cash flow was $368.7 million, or 145% of net earnings, up from $298.5 million a year earlier, primarily due to working capital changes and higher net earnings. Investing cash outflow was $28.6 million, including $21.2 million of capital expenditures and $5.1 million for the acquisition of a former independent Car-O-Liner collision distributor in Australia.
Financing cash outflow was $211.1 million, including $126.8 million in dividends and $99.9 million used to repurchase 267,000 shares. At quarter end, Snap-on had $234.1 million remaining under existing share repurchase authorizations, $1.753 billion in cash, and more than $900 million available under credit facilities, with no borrowings outstanding.
Tariffs, currency, and outlook items
Management reiterated that Snap-on is “relatively advantaged” on tariffs because it principally manufactures in the markets where it sells, though costs can still be affected by trade policies, Pagliari said. In Q&A, Pinchuk called tariffs “blizzards” and said the company is “not planning or expecting some changes” to tariffs going forward. Pagliari said Snap-on is filing for potential tariff rebates through a newly opened portal to protect its rights before liquidation dates, while emphasizing tariffs are “not as significant to Snap-on as they might be to many other companies.”
On currency, management noted mixed effects. In response to a question, Pagliari said foreign exchange provided “two cents of good news” to operating income, while Pinchuk added that currency was negative on margins because it “added a lot of sales and almost no profit” proportionally.
For outlook items, Pagliari said Snap-on expects corporate costs of about $28 million per quarter, capital expenditures of approximately $100 million for full-year 2026, and a full-year effective tax rate in the range of 22% to 23%. He also reminded listeners that third-quarter 2025 earnings per share included a $0.31 non-recurring benefit from the Arnot Group legal settlement.
Pinchuk closed by saying the company continues to see its markets as driven by “solid secular trends” and said Snap-on will keep investing in what it views as “corridors of decisive advantage,” including its franchise network, critical industries, and RS&I capabilities.
About Snap-On (NYSE:SNA)
Snap‑On Incorporated (NYSE: SNA) is a designer, manufacturer and marketer of tools, diagnostic equipment, repair information and shop equipment for professional users. The company’s product range includes hand and power tools, tool storage and cabinets, diagnostic scan tools and software, shop equipment such as lifts and tire changers, and specialized specialty tools for automotive, aviation, marine and industrial applications. Snap‑On also offers information and workflow solutions that combine diagnostic data, repair procedures and parts information to support professional technicians.
Founded in 1920 and headquartered in Kenosha, Wisconsin, Snap‑On has established a long history in the professional tools market.
