What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-17 compared with 2025-04-17 · 218 added, 88 removed, 320 unchanged (49% of the section changed)

47 unchanged sentences

from numerous countries and multiple nations countered with reciprocal tariffs and other actions in response.

government stated that it is willing to negotiate with other countries regarding the tariffs.

While the company generally manufactures products in the markets where they are sold, the tariffs may negatively impact demand and result in an increase in some product costs.

Snap-on is currently analyzing the impacts of the tariffs and actions that can be taken to moderate and/or minimize their effects.

government continues to negotiate with other countries regarding the tariffs.

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 second quarter of 2025, Snap-on mitigated the effects of incremental tariffs.

SNAP-ON INCORPORATED

2 unchanged sentences

RESULTS OF OPERATIONS

Results of operations for the three months ended March 29, 2025, and March 30, 2024, are as follows:

Results of operations for the three months ended June 28, 2025, and June 29, 2024, are as follows:

Three Months Ended

(Amounts in millions) March 29, 2025 March 30, 2024 Change

(Amounts in millions) June 28, 2025 June 29, 2024 Change

Net sales $ 1,179.4 100.0 % $ 1,179.4 100.0 % $ — — %

17 unchanged sentences

All income statement line item percentages below “Operating earnings from financial services” are calculated as a percentage of the sum of Net sales and Financial services revenue.

Net sales of $1,141.1 million in the first quarter of 2025 represented a decrease of $41.2 million, or 3.5%, from 2024 levels, reflecting a $27.3 million, or 2.3%, organic decline and $13.9 million of unfavorable foreign currency translation.

Gross profit of $578.5 million in the first quarter of 2025 compared to $596.7 million last year.

Gross margin (gross profit as a percentage of net sales) in the quarter improved 20 basis points (100 basis points (“bps”) equals 1.0 percent) from the first quarter of 2024 primarily reflecting benefits from the company’s “Rapid Continuous Improvement” or “RCI” initiatives.

Net sales of $1,179.4 million in the second quarter of 2025 were unchanged from 2024 levels, reflecting an $8.6 million, or 0.7%, organic decline, offset by $8.6 million of favorable foreign currency translation.

Gross profit of $595.5 million in the second quarter of 2025 compared to $597.3 million last year.

Gross margin (gross profit as a percentage of net sales) in the quarter decreased 10 basis points (100 basis points (“bps”) equals 1.0 percent) from the second quarter of 2024 primarily reflecting 50 bps of unfavorable foreign currency effects, partially offset by benefits from the company’s “Rapid Continuous Improvement” or “RCI” initiatives.

Snap-on’s RCI initiatives employ a structured set of tools and processes across multiple businesses and geographies intended to eliminate waste and improve operations.

1 unchanged sentence

Unless individually significant, it is not practicable to disclose each RCI activity that generated savings and/or segregate RCI savings embedded in sales volume increases.

Operating expenses of $335.4 million in the first quarter of 2025 compared to $325.8 million last year, which included an $11.3 million benefit for payments received in 2024 associated with a legal matter (the “legal payments”).

Operating expenses as a percentage of net sales rose 180 bps from last year primarily due to a 90 bps non-recurring benefit from the legal payments in 2024 and the effects of lower sales volumes, partially offset by savings from RCI initiatives.

Operating earnings before financial services of $243.1 million in the first quarter of 2025 compared to $270.9 million in 2024, which included an $11.3 million benefit from the legal payments.

Operating expenses of $336.4 million in the second quarter of 2025 compared to $317.0 million last year, which included an $11.2 million benefit for the final payments received in 2024 associated with a legal matter (the “legal payments”).

Operating expenses as a percentage of net sales rose 170 bps from last year primarily due to a 100 bps non-recurring benefit from the legal payments in 2024, and increased personnel and other costs.

Operating earnings before financial services of $259.1 million in the second quarter of 2025 compared to $280.3 million in 2024, which included an $11.2 million benefit from the legal payments.

As a percentage of net sales, operating earnings before financial services were 22.0% compared to 23.8% last year, which included a 100 bps benefit from the legal payments.

Financial services revenue of $102.1 million in the first quarter of 2025 compared to $99.6 million last year.

Financial services revenue of $101.7 million in the second quarter of 2025 compared to $100.5 million last year.

Financial services operating earnings of $68.2 million compared to $70.2 million in 2024.

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OF OPERATIONS

Operating earnings of $313.4 million in the first quarter of 2025 compared to $339.2 million in 2024, which included an $11.3 million benefit from the legal payments.

Operating earnings of $327.3 million in the second quarter of 2025 compared to $350.5 million in 2024, which included an $11.2 million benefit from the legal payments.

As a percentage of revenues (net sales plus financial services revenue), operating earnings were 25.5% in the quarter compared to 27.4% last year, which included a 90 bps benefit from the legal payments.

Interest expense in the first quarter of 2025 decreased $0.1 million from last year.

Interest expense was $12.3 million in the second quarters of both 2025 and 2024.

See Note 7 to the Condensed Consolidated Financial Statements for additional information on debt and credit facilities.

Other income (expense) – net primarily includes interest income, non-service components of net periodic benefit costs, and net gains and losses associated with hedging and currency exchange rate transactions.

In the first quarter of 2025, other income (expense) – net included $6.1 million of increased year-over-year non-service net periodic benefit costs, primarily reflecting higher amortization of actuarial losses.

In the second quarter of 2025, other income (expense) – net included $5.8 million of increased year-over-year non-service net periodic benefit costs, primarily reflecting higher amortization of actuarial losses.

See Note 15 to the Condensed Consolidated Financial Statements for additional information on Other income (expense) – net.

The effective income tax rate on earnings attributable to Snap-on was 22.2% in the first quarters of both 2025 and 2024.

The effective income tax rate on earnings attributable to Snap-on was 22.5% and 22.6% in the second quarters of 2025 and 2024, respectively.

S ee Note 6 to the Condensed Consolidated Financial Statements for additional information on income taxes.

Net earnings attributable to Snap-on of $240.5 million, or $4.51 per diluted share, in the first quarter of 2025 compared to $263.5 million, or $4.91 per diluted share, in the first quarter of 2024, which included an $8.8 million, or $0.16 per diluted share, after-tax benefit from the legal payments.

Net earnings attributable to Snap-on of $250.3 million, or $4.72 per diluted share, in the second quarter of 2025 compared to $271.2 million, or $5.07 per diluted share, in the second quarter of 2024, which included an $8.7 million, or $0.16 per diluted share, after-tax benefit from the legal payments.

Results of operations for the six months ended June 28, 2025, and June 29, 2024, are as follows:

Six Months Ended

(Amounts in millions) June 28, 2025 June 29, 2024 Change

Net sales $ 2,320.5 100.0 % $ 2,361.7 100.0 % $ (41.2) (1.7) %

Cost of goods sold (1,146.5) (49.4) % (1,167.7) (49.4) % 21.2 1.8 %

Gross profit 1,174.0 50.6 % 1,194.0 50.6 % (20.0) (1.7) %

Operating expenses (671.8) (29.0) % (642.8) (27.3) % (29.0) (4.5) %

Operating earnings before financial services 502.2 21.6 % 551.2 23.3 % (49.0) (8.9) %

Financial services revenue 203.8 100.0 % 200.1 100.0 % 3.7 1.8 %

Financial services expenses (65.3) (32.0) % (61.6) (30.8) % (3.7) (6.0) %

Operating earnings from financial services 138.5 68.0 % 138.5 69.2 % — — %

Operating earnings 640.7 25.4 % 689.7 26.9 % (49.0) (7.1) %

Interest expense (24.7) (1.0) % (24.8) (0.9) % 0.1 0.4 %

Other income (expense) – net 28.7 1.1 % 36.8 1.4 % (8.1) (22.0) %

Earnings before income taxes 644.7 25.5 % 701.7 27.4 % (57.0) (8.1) %

Income tax expense (141.2) (5.6) % (154.5) (6.0) % 13.3 8.6 %

Net earnings 503.5 19.9 % 547.2 21.4 % (43.7) (8.0) %

Net earnings attributable to noncontrolling interests (12.7) (0.5) % (12.5) (0.5) % (0.2) (1.6) %

Net earnings attributable to Snap-on Inc.

$ 490.8 19.4 % $ 534.7 20.9 % $ (43.9) (8.2) %

Percentage Disclosure:

All income statement line item percentages below “Operating earnings from financial services” are calculated as a percentage of the sum of Net sales and Financial services revenue.

Net sales of $2,320.5 million in the first six months of 2025 represented a decrease of $41.2 million , or 1.7% , from 2024 levels, reflecting a $35.9 million , or 1.5% , organic decline and $5.3 million of unfavorable foreign currency translation.

Gross profit of $1,174.0 million in the first six months of 2025 compared to $1,194.0 million last year.

Gross margin in the first six months was unchanged from 2024 primarily reflecting 20 bps of unfavorable foreign currency offset by benefits from the company’s RCI initiatives.

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

Operating expenses of $671.8 million in the first six months of 2025 compared to $642.8 million last year, which included a $22.5 million benefit from the legal payments.

Operating expenses as a percentage of net sales rose 170 bps from last year primarily due to a 90 bps benefit from the legal payments in 2024, the effects of lower sales volumes and increased personnel and other costs, partially offset by savings from RCI initiatives.

Operating earnings before financial services of $502.2 million in the first six months of 2025 compared to $551.2 million in 2024, which included a $22.5 million benefit from the legal payments.

As a percentage of net sales, operating earnings before financial services were 21.6% compared to 23.3% last year, which included a 90 bps benefit from the legal payments.

Financial services revenue of $203.8 million in the first six months of 2025 compared to $200.1 million last year.

Financial services operating earnings of $138.5 million were unchanged from the first six months of 2024.

Operating earnings of $640.7 million in the first six months of 2025 compared to $689.7 million in 2024, which in cluded a $22.5 million benefit from the legal payments.

As a percentage of revenues, operating earnings were 25.4% in the period compared to 26.9% last year, which included a 90 bps be nefit from the legal payments.

Interest expense in the first six months of 2025 decreased $0.1 million from last year.

See Note 7 to the Condensed Consolidated Financial Statements for additional information on debt and credit facilities.

In the first six months of 2025, other income (expense) – net included $11.9 million of increased year-over-year non-service net periodic benefit costs, primarily reflecting higher amortization of actuarial losses.

See Note 15 to the Condensed Consolidated Financial Statements for additional information on Other income (expense) – net.

The effective income tax rate on earnings attributable to Snap-on was 22.3% and 22.4% in the first six months of 2025 and 2024, respectively.

S ee Note 6 to the Condensed Consolidated Financial Statements for additional information on income taxes.

Net earnings attributable to Snap-on of $490.8 million , or $9.24 per diluted share, in the first six months of 2025 compared to $534.7 million , or $9.98 per diluted share, in the first six months of 2024, which included a $17.5 million, or $0.32 per diluted share, after-tax benefit from the legal payments.

Segment Results

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Three Months Ended

(Amounts in millions) March 29, 2025 March 30, 2024 Change

(Amounts in millions) June 28, 2025 June 29, 2024 Change

External net sales $ 289.2 83.2 % $ 305.0 82.0 % $ (15.8) (5.2) %

5 unchanged sentences

Segment operating earnings $ 46.9 13.5 % $ 62.2 16.7 % $ (15.3) (24.6) %

Segment net sales of $343.9 million in the first quarter of 2025 represented a decrease of $16.0 million, or 4.4%, from 2024 levels, reflecting a $10.4 million, or 2.9%, organic sales decline and $5.6 million of unfavorable foreign currency translation.

The organic reduction includes a low single-digit decrease in activity with customers in critical industries, where lower sales to the military more than offset gains in other critical industry sectors, and a low single-digit decline in the European-based hand tools business.

Segment gross margin in the first quarter improved 180 bps from last year primarily reflecting lower material and other costs, increased volumes in the higher-gross-margin sectors of critical industries, and savings from the segment’s RCI initiatives.

Segment operating expenses as a percentage of net sales in the first quarter rose 170 bps as compared to 2024 primarily due to the impact of lower sales volumes.

As a result of these factors, segment operating earnings of $53.2 million in the first quarter of 2025 compared to $55.4 million in 2024.

Operating margin (segment operating earnings as a percentage of segment net sales) for the Commercial & Industrial Group of 15.5% in the first quarter of 2025 compared to 15.4% in 2024.

Segment net sales of $347.8 million in the second quarter of 2025 represented a decrease of $24.2 million, or 6.5%, from 2024 levels, reflecting a $28.7 million, or 7.6%, organic sales decline, partially offset by $4.5 million of favorable foreign currency translation.

The organic reduction includes double-digit decreases in the segment’s Asia Pacific and European-based hand tools businesses, and a mid single-digit decline in activity with customers in critical industries, partially offset by a high single-digit rise in the specialty torque operation.

Segment gross margin in the second quarter decreased 170 bps from last year primarily due to lower sales volumes and 50 bps of unfavorable foreign currency effects, partially offset by savings from the segment’s RCI initiatives.

Segment operating expenses as a percentage of net sales in the second quarter rose 150 bps as compared to 2024 primarily reflecting the impact of lower sales volumes, as well as increased personnel and other costs.

As a result of these factors, segment operating earnings of $46.9 million in the second quarter of 2025 compared to $62.2 million in 2024.

Operating margin (segment operating earnings as a percentage of segment net sales) for the Commercial & Industrial Group of 13.5% in the second quarter of 2025 compared to 16.7% in 2024.

Six Months Ended

(Amounts in millions) June 28, 2025 June 29, 2024 Change

External net sales $ 565.9 81.8 % $ 596.0 81.4 % $ (30.1) (5.1) %

Intersegment net sales 125.8 18.2 % 135.9 18.6 % (10.1) (7.4) %

Segment net sales 691.7 100.0 % 731.9 100.0 % (40.2) (5.5) %

Cost of goods sold (406.0) (58.7) % (429.9) (58.7) % 23.9 5.6 %

Gross profit 285.7 41.3 % 302.0 41.3 % (16.3) (5.4) %

Operating expenses (185.6) (26.8) % (184.4) (25.2) % (1.2) (0.7) %

Segment operating earnings $ 100.1 14.5 % $ 117.6 16.1 % $ (17.5) (14.9) %

Segment net sales of $691.7 million in the first six months of 2025 represented a decrease of $40.2 million , or 5.5% , from 2024 levels, reflecting a $39.1 million , or 5.4% , organic sales decline and $1.1 million of unfavorable foreign currency translation.

The organic decline includes mid single-digit decreases in activity with customers in critical industries and in the European-based hand tools business, and a high single-digit reduction in the segment’s Asia Pacific operations, partially offset by a mid single-digit increase in specialty torque.

Segment gross margin in the first six months was unchanged from last year primarily reflecting the reduced sales volumes and 30 bps of unfavorable currency effects, offset by lower material and other costs, and savings from the segment’s RCI initiatives.

Segment operating expenses as a percentage of net sales in the first six months rose 160 bps as compared to 2024 primarily due to the impact of lower sales volumes, and increased personnel and other costs.

As a result of these factors, segment operating earnings of $100.1 million in the first six months of 2025 compared to $117.6 million in 2024.

Operating margin for the Commercial & Industrial Group of 14.5% in the first six months of 2025 compared to 16.1% in 2024.

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

Snap-on Tools Group

Three Months Ended

(Amounts in millions) March 29, 2025 March 30, 2024 Change

(Amounts in millions) June 28, 2025 June 29, 2024 Change

Segment net sales $ 491.0 100.0 % $ 482.0 100.0 % $ 9.0 1.9 %

3 unchanged sentences

Segment operating earnings $ 116.7 23.8 % $ 114.8 23.8 % $ 1.9 1.7 %

Segment net sales of $462.9 million in the first quarter of 2025 represented a decrease of $37.2 million, or 7.4%, from 2024 levels, reflecting a $33.6 million, or 6.8%, organic sales decline and $3.6 million of unfavorable foreign currency translation.

The organic decrease is due to a high single-digit decline in the U.S., partially offset by a low single-digit gain in the segment’s international operations.

Segment gross margin in the first quarter decreased 190 bps from last year primarily due to a year-over-year shift in product mix, as well as a result of the reduced volumes.

Segment operating expenses as a percentage of net sales in the first quarter rose 160 bps as compared to 2024 primarily reflecting the lower sales volumes.

As a result of these factors, segment operating earnings of $92.4 million in the first quarter of 2025 compared to $117.3 million in 2024.

Operating margin for the Snap-on Tools Group of 20.0% in the first quarter of 2025 compared to 23.5% last year.

Segment net sales of $491.0 million in the second quarter of 2025 represented an increase of $9.0 million, or 1.9%, from 2024 levels, reflecting a $7.8 million, or 1.6%, organic sales gain and $1.2 million of favorable foreign currency translation.

The organic improvement is due to a low single-digit rise in the U.S., while activity in the segment’s international operations was essentially flat.

Segment gross margin in the second quarter decreased 50 bps from last year primarily due to 40 bps of unfavorable foreign currency effects.

Segment operating expenses as a percentage of net sales in the second quarter improved 50 bps as compared to 2024 primarily reflecting the higher sales volumes.

As a result of these factors, segment operating earnings of $116.7 million in the second quarter of 2025 compared to $114.8 million in 2024.

Operating margin for the Snap-on Tools Group of 23.8% in the second quarter of 2025 was unchanged from last year.

Six Months Ended

(Amounts in millions) June 28, 2025 June 29, 2024 Change

Segment net sales $ 953.9 100.0 % $ 982.1 100.0 % $ (28.2) (2.9) %

Cost of goods sold (502.2) (52.6) % (505.8) (51.5) % 3.6 0.7 %

Gross profit 451.7 47.4 % 476.3 48.5 % (24.6) (5.2) %

Operating expenses (242.6) (25.5) % (244.2) (24.9) % 1.6 0.7 %

Segment operating earnings $ 209.1 21.9 % $ 232.1 23.6 % $ (23.0) (9.9) %

Segment net sales of $953.9 million in the first six months of 2025 represented a decrease of $28.2 million , or 2.9% , from 2024 levels, reflecting a $25.8 million , or 2.6% , organic sales decline and $2.4 million of unfavorable foreign currency translation.

The organic reduction is due to a low single-digit decrease in the U.S., partially offset by a low single-digit gain in the segment’s international operations.

Segment gross margin in the first six months decreased 110 bps from last year primarily due to a year-over-year shift in product mix, as well as a result of the reduced volumes.

Segment operating expenses as a percentage of net sales in the first six months rose 60 bps as compared to 2024 primarily reflecting the lower sales volumes.

As a result of these factors, segment operating earnings of $209.1 million in the first six months of 2025 compared to $232.1 million in 2024.

Operating margin for the Snap-on Tools Group of 21.9% in the first six months of 2025 compared to 23.6% last year.

SNAP-ON INCORPORATED

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Three Months Ended

(Amounts in millions) March 29, 2025 March 30, 2024 Change

(Amounts in millions) June 28, 2025 June 29, 2024 Change

External net sales $ 399.2 85.2 % $ 392.4 86.3 % $ 6.8 1.7 %

5 unchanged sentences

Segment operating earnings $ 119.8 25.6 % $ 113.6 25.0 % $ 6.2 5.5 %

Segment net sales of $475.9 million in the first quarter of 2025 represented an increase of $12.1 million, or 2.6%, from 2024 levels, reflecting a $17.0 million, or 3.7%, organic sales gain, partially offset by $4.9 million of unfavorable foreign currency translation.

The organic improvement includes a double-digit increase in activity with OEM dealerships and a low single-digit gain in sales of diagnostic and repair information products to independent repair shop owners and managers, partially offset by a mid single-digit decline in sales of undercar equipment.

Segment gross margin in the first quarter improved 70 bps from last year primarily reflecting increased sales of higher-gross-margin products and benefits from the segment’s RCI initiatives, partially offset by higher material and other costs.

Segment operating expenses as a percentage of net sales in the first quarter improved 70 bps from 2024 primarily due to the higher sales volumes and savings from RCI initiatives.

As a result of these factors, segment operating earnings of $122.1 million in the first quarter of 2025 compared to $112.9 million in 2024.

Operating margin for the Repair Systems & Information Group of 25.7% in the first quarter of 2025 compared to 24.3% last year.

Segment net sales of $468.6 million in the second quarter of 2025 represented an increase of $13.8 million, or 3.0%, from 2024 levels, reflecting a $10.7 million, or 2.3%, organic sales gain and $3.1 million of favorable foreign currency translation.

The organic improvement includes a double-digit increase in activity with OEM dealerships and a high single-digit gain in sales of diagnostic and repair information products to independent repair shop owners and managers, partially offset by a high single-digit decline in sales of undercar equipment.

Segment gross margin in the second quarter improved 130 bps from last year primarily reflecting increased sales of higher-gross-margin products and benefits from the segment’s RCI initiatives, partially offset by higher material and other costs, and 40 bps of unfavorable foreign currency effects.

Segment operating expenses as a percentage of net sales in the second quarter rose 70 bps from 2024 primarily due to increased personnel and other costs.

As a result of these factors, segment operating earnings of $119.8 million in the second quarter of 2025 compared to $113.6 million in 2024.

Operating margin for the Repair Systems & Information Group of 25.6% in the second quarter of 2025 compared to 25.0% last year.

Six Months Ended

(Amounts in millions) June 28, 2025 June 29, 2024 Change

External net sales $ 800.7 84.8 % $ 783.6 85.3 % $ 17.1 2.2 %

Intersegment net sales 143.8 15.2 % 135.0 14.7 % 8.8 6.5 %

Segment net sales 944.5 100.0 % 918.6 100.0 % 25.9 2.8 %

Cost of goods sold (507.9) (53.8) % (502.9) (54.7) % (5.0) (1.0) %

Gross profit 436.6 46.2 % 415.7 45.3 % 20.9 5.0 %

Operating expenses (194.7) (20.6) % (189.2) (20.6) % (5.5) (2.9) %

Segment operating earnings $ 241.9 25.6 % $ 226.5 24.7 % $ 15.4 6.8 %

Segment net sales of $944.5 million in the first six months of 2025 represented an increase of $25.9 million , or 2.8% , from 2024 levels, reflecting a $27.7 million , or 3.0% , organic sales gain, partially offset by $1.8 million of unfavorable foreign currency translation.

The organic improvement includes a double-digit increase in activity with OEM dealerships and a mid single-digit gain in sales of diagnostic and repair information products to independent repair shop owners and managers, partially offset by a mid single-digit decline in sales of undercar equipment.

Segment gross margin in the first six months improved 90 bps from last year primarily due to increased sales of higher-gross-margin products and benefits from the segment’s RCI initiatives, partially offset by higher material and other costs, and 20 bps of unfavorable foreign currency effects.

Segment operating expenses as a percentage of net sales in the first six months was unchanged from 2024 primarily reflecting the effects of higher sales volumes and savings from RCI initiatives, offset by increased personnel and other costs.

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

As a result of these factors, segment operating earnings of $241.9 million in the first six months of 2025 compared to $226.5 million in 2024.

Operating margin for the Repair Systems & Information Group of 25.6% in the first six months of 2025 compared to 24.7% last year.

Financial Services

Three Months Ended

(Amounts in millions) March 29, 2025 March 30, 2024 Change

(Amounts in millions) June 28, 2025 June 29, 2024 Change

Financial services revenue $ 101.7 100.0 % $ 100.5 100.0 % $ 1.2 1.2 %

2 unchanged sentences

Financial services revenue is generally dependent on the size of the average financial services portfolio during the period, as well as on the average yield on receivables.

Financial services revenue of $102.1 million in the first quarter of 2025 represented an increase of $2.5 million, or 2.5%, from last year.

In the first quarters of 2025 and 2024, the respective average yields on finance receivables were 17.6% and 17.7% .

In the first quarters of 2025 and 2024, the average yields on contract receivables were 9.1% and 9.0%, respectively.

Originations of $268.7 million in the first quarter of 2025 represented a decrease of $33.0 million, or 10.9%, from 2024 levels.

Financial services revenue of $101.7 million in the second quarter of 2025 represented an increase of $1.2 million, or 1.2%, from last year.

In the second quarters of 2025 and 2024, the respective average yields on finance receivables were 17.5% and 17.7% .

In the second quarters of 2025 and 2024, the average yields on contract receivables were 9.1% and 8.9%, respectively.

Originations of $293.0 million in the second quarter of 2025 represented a decrease of $15.1 million, or 4.9%, from 2024 levels.

Financial services expenses primarily include personnel-related and other general and administrative costs, as well as provisions for credit losses.

These expenses are generally more dependent on changes in the size of the financial services portfolio than they are on the revenue of the segment.

As a percentage of the average financial services portfolio, expenses were 1.3% in the first quarters of both 2025 and 2024.

As a result of these factors, segment operating earnings of $70.3 million in the first quarter of 2025 compared to $68.3 million in 2024.

Financial services expenses in the second quarter of 2025 increased $3.2 million from last year primarily due to $1.5 million of higher provisions for credit losses, as well as increased personnel and other costs.

As a percentage of the average financial services portfolio, expenses were 1.3% and 1.2% in the respective second quarters of 2025 and 2024.

As a result of these factors, segment operating earnings of $68.2 million in the second quarter of 2025 compared to $70.2 million in 2024.

Six Months Ended

(Amounts in millions) June 28, 2025 June 29, 2024 Change

Financial services revenue $ 203.8 100.0 % $ 200.1 100.0 % $ 3.7 1.8 %

Financial services expenses (65.3) (32.0) % (61.6) (30.8) % (3.7) (6.0) %

Segment operating earnings $ 138.5 68.0 % $ 138.5 69.2 % $ — — %

Financial services revenue of $203.8 million in the first six months of 2025 represented an increase of $3.7 million , or 1.8% , from last year.

In the first six months of 2025 and 2024, the respective average yields on finance receivables were 17.6% and 17.7% .

In the first six months of 2025 and 2024, the average yields on contract receivables were 9.1% and 9.0% , respectively.

Originations of $561.7 million in the first six months of 2025 represented a decrease of $48.1 million , or 7.9% , from 2024 levels.

Financial services expenses i n the first six months of 2025 increased $3.7 million from last year primarily due to $1.8 million of higher provisions for credit losses, as well as increased personnel and other costs.

As a percentage of the average financial services portfolio, expenses were 2.6% and 2.5% in the respective first six months of 2025 and 2024.

As a result of these factors, segment operating earnings of $138.5 million in the first six months of 2025 were unchanged from 2024.

Snap-on’s second quarter 2025 general corporate expenses of $24.3 million compared to $10.3 million last year.

For the first six months of 2025, general corporate expenses of $48.9 million compared to $25.0 million recorded in 2024.

The year-over-year increase in 2025 for both periods primarily reflects benefits from the legal payments received in the first six months of 2024 .

SNAP-ON INCORPORATED

1 unchanged sentence

OF OPERATIONS

Snap-on’s first quarter 2025 general corporate expenses of $24.6 million compared to $14.7 million last year.

The year-over-year increase primarily reflects benefits from the legal payments received in the first quarter of 2024.

Non-GAAP Supplemental Data

8 unchanged sentences

Transactions between the Operations and Financial Services businesses are eliminated to arrive at the Condensed Consolidated Financial Statements.

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Statements of Earnings information for the three months ended March 29, 2025, and March 30, 2024, is as follows:

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Statements of Earnings information for the three months ended June 28, 2025, and June 29, 2024, is as follows:

Operations* Financial Services

(Amounts in millions) March 29,

2025 March 30,

2024 March 29, 2025 March 30, 2024

(Amounts in millions) June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

Net sales $ 1,179.4 $ 1,179.4 $ — $ —

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OF OPERATIONS

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Balance Sheets information as of March 29, 2025, and December 28, 2024, is as follows:

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Statements of Earnings information for the six months ended June 28, 2025, and June 29, 2024, is as follows:

Operations* Financial Services

(Amounts in millions) March 29,

2025 December 28, 2024 March 29,

(Amounts in millions) June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024

Net sales $ 2,320.5 $ 2,361.7 $ — $ —

Cost of goods sold (1,146.5) (1,167.7) — —

Gross profit 1,174.0 1,194.0 — —

Operating expenses (671.8) (642.8) — —

Operating earnings before financial services 502.2 551.2 — —

Financial services revenue — — 203.8 200.1

Financial services expenses — — (65.3) (61.6)

Operating earnings from financial services — — 138.5 138.5

Operating earnings 502.2 551.2 138.5 138.5

Interest expense (24.7) (24.8) — —

Intersegment interest income (expense) – net 34.4 33.8 (34.4) (33.8)

Other income (expense) – net 28.6 36.7 0.1 0.1

Earnings before income taxes and equity earnings 540.5 596.9 104.2 104.8

Income tax expense (115.1) (127.3) (26.1) (27.2)

Earnings before equity earnings 425.4 469.6 78.1 77.6

Financial services – net earnings attributable to Snap-on 78.1 77.6 — —

Net earnings 503.5 547.2 78.1 77.6

Net earnings attributable to noncontrolling interests (12.7) (12.5) — —

Net earnings attributable to Snap-on $ 490.8 $ 534.7 $ 78.1 $ 77.6

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Balance Sheets information as of June 28, 2025, and December 28, 2024, is as follows:

Operations* Financial Services

(Amounts in millions) June 28,

2025 December 28, 2024 June 28,

2025 December 28, 2024

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Operations* Financial Services

(Amounts in millions) March 29,

2025 December 28, 2024 March 29,

(Amounts in millions) June 28,

2025 December 28, 2024 June 28,

2025 December 28, 2024

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Due to Snap-on’s credit rating over the years, external funds have been available at an acceptable cost.

As of April 11, 2025, Snap-on’s long-term debt and commercial paper were rated, respectively, A2 and P-1 by Moody’s Investors Service;

As of July 11, 2025, Snap-on’s long-term debt and commercial paper were rated, respectively, A2 and P-1 by Moody’s Investors Service;

A- and A-2 by Standard & Poor’s;

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The following discussion focuses on information included in the accompanying Condensed Consolidated Balance Sheets.

Working capital (current assets less current liabilities) of $3,141.5 million as of March 29, 2025, represented an increase of $113.6 million from $3,027.9 million as of December 28, 2024 (fiscal 2024 year end), primarily as a result of the net changes discussed below.

The following represents the company’s working capital position as of March 29, 2025, and December 28, 2024:

(Amounts in millions) March 29,

Working capital (current assets less current liabilities) of $3,278.1 million as of June 28, 2025, represented an increase of $250.2 million from $3,027.9 million as of December 28, 2024 (fiscal 2024 year end), primarily as a result of the net changes discussed below.

The following represents the company’s working capital position as of June 28, 2025, and December 28, 2024:

(Amounts in millions) June 28,

2025 December 28, 2024

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Working capital $ 3,278.1 $ 3,027.9

Cash and cash equivalents of $1,434.9 million as of March 29, 2025, represented an increase of $74.4 million from 2024 year-end levels primarily due to:

Cash and cash equivalents of $1,458.3 million as of June 28, 2025, represented an increase of $97.8 million from 2024 year-end levels primarily due to:

(i) $535.7 million of cash generated from operations;

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and (iv) the funding of $42.6 million of capital expenditures.

Of the $1,434.9 million of cash and cash equivalents as of March 29, 2025, $511.8 million was held outside of the United States.

Of the $1,458.3 million of cash and cash equivalents as of June 28, 2025, $561.0 million was held outside of the United States.

Snap-on maintains non-U.S.

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OF OPERATIONS

Trade and other accounts receivable – net of $852.7 million as of March 29, 2025, represented an increase of $37.1 million from 2024 year-end levels primarily due to an increase in days sales outstanding and $9.6 million of foreign currency translation.

Days sales outstanding (trade and other accounts receivable – net as of the respective period end, divided by the respective trailing 12 months of sales, times 360 days) was 66 days for March 29, 2025, and 62 days for December 28, 2024.

The current portions of net finance and contract receivables of $736.8 million as of March 29, 2025, compared to $730.3 million at 2024 year end.

The long-term portions of net finance and contract receivables of $1,716.4 million as of March 29, 2025, compared to $1,730.3 million at 2024 year end.

Inventories – net of $961.2 million as of March 29, 2025, represented an increase of $17.8 million from December 28, 2024, primaril y due to $15.5 million of foreign currency translation.

Inventory turns (trailing 12 months of cost of goods sold, divided by the average of the beginning and ending inventory balances for the trailing 12 months) were 2.4 turns as of both March 29, 2025, and December 28, 2024.

Inventories accounted for using the first-in, first-out (“FIFO”) method approximated 59% of total inventories as of March 29, 2025, and 57% of total inventories as of December 28, 2024.

Trade and other accounts receivable – net of $842.4 million as of June 28, 2025, represented an increase of $26.8 million from 2024 year-end levels primarily due to $24.4 million of foreign currency translation.

Days sales outstanding (trade and other accounts receivable – net as of the respective period end, divided by the respective trailing 12 months of sales, times 360 days) was 65 days for June 28, 2025, and 62 days for December 28, 2024.

The current portions of net finance and contract receivables of $743.4 million as of June 28, 2025, compared to $730.3 million at 2024 year end.

The long-term portions of net finance and contract receivables of $1,729.6 million as of June 28, 2025, compared to $1,730.3 million at 2024 year end.

Inventories – net of $997.7 million as of June 28, 2025, represented an increase of $54.3 million from December 28, 2024, primaril y due to $37.4 million of foreign currency translation.

Inventories accounted for using the first-in, first-out (“FIFO”) method approximated 62% of total inventories as of June 28, 2025, and 57% of total inventories as of December 28, 2024.

All other inventories are accounted for using the last-in, first-out (“LIFO”) method.

The company’s LIFO reserve was $123.1 million and $122.4 million as of March 29, 2025, and December 28, 2024, respectively.

Notes payable of $18.2 million as of March 29, 2025, compared to $13.7 million as of 2024 year end.

Accounts payable of $281.3 million as of March 29, 2025, represented an increase of $15.4 million from December 28, 2024, primarily due to the timing of payments and $3.2 million of foreign currency translation.

Other accrued liabilities of $492.6 million as of March 29, 2025, represented an increase of $34.9 million from 2024 year-end levels primarily due to an increase in accrued income taxes and $4.8 million of foreign currency translation.

Long-term debt of $1,185.7 million as of March 29, 2025, consisted of:

The company’s LIFO reserve was $125.2 million and $122.4 million as of June 28, 2025, and December 28, 2024, respectively.

Notes payable of $17.7 million as of June 28, 2025, compared to $13.7 million as of 2024 year end.

Accounts payable of $269.8 million as of June 28, 2025, represented an increase of $3.9 million from December 28, 2024, primarily due to $6.9 million of foreign currency translation, partially offset by the timing of payments.

Other accrued liabilities of $454.3 million as of June 28, 2025, represented a decrease of $3.4 million from 2024 year-end levels primarily due to a decrease in accrued income taxes, partially offset by $12.1 million of foreign currency translation.

Long-term debt of $1,186.0 million as of June 28, 2025, consisted of:

(i) $300 million of unsecured 3.25% notes that mature on March 1, 2027 (the “2027 Notes”);

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The Credit Facility contains an accordion feature that, subject to certain customary conditions, may allow the maximum commitment to be increased by up to $450 million with the approval of the lenders providing additional commitments.

No amounts were borrowed or outstanding under the Credit Facility during the three months ended and as of March 29, 2025.

No amounts were borrowed or outstanding under the Credit Facility during the six months ended and as of June 28, 2025.

Borrowings under the Credit Facility bear interest at varying rates based on either:

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Snap-on may, up to two times during any five-year period during the term of the Credit Facility (including any extensions thereof), elect to increase the maximum Leverage Ratio to 0.65 to 1.00 and/or increase the maximum Consolidated Net Debt to EBITDA Ratio to 4.00 to 1.00 for four consecutive fiscal quarters in connection with certain material acquisitions (as defined in the related credit agreement).

As of March 29, 2025, the company’s consolidated cash balance, net of certain adjustments, exceeded consolidated debt resulting in actual ratios of (0.03) and (0.10), respectively.

As of June 28, 2025, the company’s consolidated cash balance, net of certain adjustments, exceeded consolidated debt resulting in actual ratios of (0.03) and (0.11), respectively.

Both ratios are within the permitted ranges set forth in this financial covenant.

Snap-on generally issues commercial paper to fund its financing needs on a short-term basis and uses the Credit Facility as back-up liquidity to support such commercial paper issuances.

As of March 29, 2025, there were no commercial paper issuances outstanding.

As of June 28, 2025, there were no commercial paper issuances outstanding.

SNAP-ON INCORPORATED

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Operating Activities

Net cash provided by operating activities was $298.5 million and $348.7 million in the respective first three months of 2025 and 2024.

Net cash provided by operating activities was $535.7 million and $649.8 million in the respective first six months of 2025 and 2024.

The $114.1 million year-over-year decrease in net cash provided by operating activities primarily reflects a $70.7 million change in net operating assets and liabilities and a $43.7 million decrease in net earnings.

Investing Activities

Net cash used by investing activities of $32.0 million in the first three months of 2025 included additions to finance receivables of $218.9 million, partially offset by collections of $210.7 million.

Net cash used by investing activities of $63.2 million in the first three months of 2024 included additions to finance receivables of $248.0 million, partially offset by collections of $207.8 million.

Net cash used by investing activities of $78.0 million in the first six months of 2025 included additions to finance receivables of $462.4 million, partially offset by collections of $427.8 million.

Net cash used by investing activities of $123.4 million in the first six months of 2024 included additions to finance receivables of $504.2 million, partially offset by collections of $422.8 million.

Finance receivables are comprised of extended-term installment payment contracts to both technicians and independent shop owners (i.e., franchisees’ customers) to enable them to purchase tools, diagnostics, and equipment products on an extended-term payment plan, with average payment terms of approximately four years.

Capital expenditures were $22.9 million and $21.8 million in the respective first three months of 2025 and 2024.

Capital expenditures were $42.6 million and $45.0 million in the respective first six months of 2025 and 2024.

Capital expenditures in both years included continued investments related to the company’s execution of its strategic Value Creation Processes around safety, quality, customer connection, innovation and RCI.

Financing Activities

Net cash used by financing activities was $193.6 million in the first three months of 2025 and $164.2 million in the first three months of 2024.

Proceeds from stock purchase plans and stock option exercises totaled $18.3 million and $28.3 million in the respective first three months of 2025 and 2024.

In the first three months of 2025, Snap-on repurchased 260,000 shares of its common stock for $87.2 million under its previously announced share repurchase programs.

In the first three months of 2024, Snap-on repurchased 248,000 shares of its common stock for $70.2 million under its previously announced share repurchase programs.

As of March 29, 2025, Snap-on had remaining availability to repurchase up to an additional $398.4 million in common stock pursuant to its Board’s authorizations.

Net cash used by financing activities was $364.5 million in the first six months of 2025 and $292.1 million in the first six months of 2024.

Proceeds from stock purchase plans and stock option exercises totaled $45.2 million and $51.7 million in the respective first six months of 2025 and 2024.

In the first six months of 2025, Snap-on repurchased 510,000 shares of its common stock for $166.2 million under its previously announced share repurchase programs.

In the first six months of 2024, Snap-on repurchased 422,000 shares of its common stock for $117.6 million under its previously announced share repurchase programs.

As of June 28, 2025, Snap-on had remaining availability to repurchase up to an additional $357.9 million in common stock pursuant to its Board’s authorizations.

The repurchase of Snap-on common stock to offset dilution related to equity plan issuances or for other corporate purposes is at the company’s discretion, subject to prevailing financial and market conditions.

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Snap-on has paid consecutive quarterly cash dividends, without interruption or reduction, since 1939.

Cash dividends totaled $112.2 million and $98.2 million in the respective first three months of 2025 and 2024.

Cash dividends totaled $224.0 million and $196.2 million in the respective first six months of 2025 and 2024.

On November 8, 2024, the Board increased the quarterly cash dividend by 15.1% to $2.14 per share ($8.56 per share annualized).

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In 2025, 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 can be high.

In pursuit of these initiatives, we project that capital expenditures in 2025 will approximate $100 million, of which $22.9 million was incurred in the first three months of the year.

In pursuit of these initiatives, we project that capital expenditures in 2025 will approximate $100 million, of which $42.6 million was incurred in the first six months of the year.

Snap-on currently anticipates that its full-year 2025 effective income tax rate will be in the range of 22% to 23%.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis