Snap-on sees sales dip despite profit rise in Q3 2018

Snap-on recorded a slight dip in sales in Q3 2018, combating sales turbulence in its Repair Systems & Information Group with increased hand tool sales in Europe. Overall profits were $163.2m, compared to £133.4m in Q3 2018.

Net sales of $898.1 million were down $5.7m (0.6%) from 2017 levels, reflecting a $5.4m or 0.6% organic sales gain, $1.4m of acquisition-related sales and $12.5 m of unfavourable foreign currency translation.

In terms of segment results, Snap-on Tools Group sales in Q3 2018 fell 0.7% from 2017 levels to £389.8m, reflecting a $0.3m (0.1% organic sales increase) more than offset by $3.2m unfavourable foreign currency translation.

The Commercial & Industrial Group segment sales increased 5% ($15.6m) to £330.2m, reflecting a $20.7m (6.7%) organic sales gain and $1.4m acquisition-related sales, partially offset by $6.5m unfavourable foreign currency translation. Organic sales came through higher sales of power tools, increased sales in Asia Pacific and to critical industries, as well as European-based hand tools business.

The Repair Systems & Information Group sales sales fell 5.7% to £314.4m, reflecting a £15.9m (4.8%) organic sales decline and $3.2m unfavourable foreign currency translation. It saw lower sales of diagnostics and repair information products to independent repair shop owners and managers and decreased sales to OEM dealerships.

Looking ahead, Snap-on expects progress in automotive repair and adjacent markets, and in critical industries where the cost and penalties for failure can be high.

“Our third quarter results demonstrated encouraging progress on a number of fronts, including higher operating margins and net earnings, broad-based organic sales growth in our Commercial & Industrial Group and incremental improvement in organic sales trends in the Snap-on Tools Group, driven by higher year over year sales in the US franchise operations,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “While we experienced sales turbulence in our Repair Systems & Information Group this quarter, we believe the vehicle repair markets in which we operate remain robust and afford ongoing opportunity. At the same time, in addition to ongoing improvement in earnings and margins, the benefits of our Snap-on Value Creation Processes continue to be realized in a variety of ways. …our progress in the third quarter would not have been possible without the capability and commitment of our franchisees and associates, and I thank them for their dedication and their contributions.”