What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-16 compared with 2025-07-17 · 157 added, 147 removed, 391 unchanged (44% of the section changed)

49 unchanged sentences

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.

In that regard, in the third quarter and first nine months 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 June 28, 2025, and June 29, 2024, are as follows:

Results of operations for the three months ended September 27, 2025, and September 28, 2024, are as follows:

Three Months Ended

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

(Amounts in millions) September 27, 2025 September 28, 2024 Change

Net sales $ 1,190.8 100.0 % $ 1,147.0 100.0 % $ 43.8 3.8 %

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 $1,179.4 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.

Net sales of $1,190.8 million in the third quarter of 2025 represented an increase of $43.8 million from 2024 levels, reflecting a $34.8 million, or 3.0%, organic gain and $9.0 million of favorable foreign currency translation.

Gross profit of $605.9 million in the third quarter of 2025 compared to $587.8 million last year.

Gross margin (gross profit as a percentage of net sales) in the quarter decreased 30 basis points (100 basis points (“bps”) equals 1.0 percent) from the third quarter of 2024 primarily reflecting 20 bps of unfavorable foreign currency effects.

The impact of tariffs in the third quarter was largely offset by the higher sales volumes and 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 $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 $101.7 million in the second quarter of 2025 compared to $100.5 million last year.

Operating expenses of $327.4 million in the third quarter of 2025, including a $22.0 million benefit from the settlement of a legal matter (the “2025 legal settlement”), compared to $335.4 million last year.

Operating expenses as a percentage of net sales improved 170 bps from last year primarily reflecting a 190 bps benefit from the 2025 legal settlement.

Operating earnings before financial services of $278.5 million in the third quarter of 2025, including a $22.0 million benefit from the 2025 legal settlement, compared to $252.4 million in 2024.

As a percentage of net sales, operating earnings before financial services were 23.4% compared to 22.0% last year.

Financial services revenue of $101.1 million in the third quarter of 2025 compared to $100.4 million last year.

Financial services operating earnings of $68.9 million compared to $71.7 million in 2024.

2 unchanged sentences

OF OPERATIONS

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

Operating earnings of $347.4 million in the third quarter of 2025, including a $22.0 million benefit from the 2025 legal settlement, compared to $324.1 million in 2024.

As a percentage of revenues (net sales plus financial services revenue), operating earnings were 26.9% in the quarter compared to 26.0% last year.

Interest expense in the third quarter 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.

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 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.

In the third quarter of 2025, other income (expense) – net included $6.0 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 22.5% 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 $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

The effective income tax rate on earnings attributable to Snap-on was 22.6% and 22.9% in the third quarters of 2025 and 2024, respectively.

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

Net earnings attributable to Snap-on of $265.4 million, or $5.02 per diluted share, in the third quarter of 2025, including a $16.2 million, or $0.31 per diluted share, after-tax benefit from the 2025 legal settlement, compared to $251.1 million, or $4.70 per diluted share, in the third quarter of 2024.

Results of operations for the nine months ended September 27, 2025, and September 28, 2024, are as follows:

Nine Months Ended

(Amounts in millions) September 27, 2025 September 28, 2024 Change

Net sales $ 3,511.3 100.0 % $ 3,508.7 100.0 % $ 2.6 0.1 %

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 $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.

Net sales of $3,511.3 million in the first nine months of 2025 represented an increase of $2.6 million from 2024 levels, reflecting $3.7 million of favorable foreign currency translation, partially offset by a $1.1 million organic sales decline.

Gross profit of $1,779.9 million in the first nine months of 2025 compared to $1,781.8 million last year.

Gross margin in the first nine months decreased 10 bps from 2024 primarily reflecting 20 bps of unfavorable foreign currency effects.

The impact of tariffs in the first nine months of 2025 was largely offset by benefits from the company’s RCI initiatives.

SNAP-ON INCORPORATED

1 unchanged sentence

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.

Operating expenses of $999.2 million in the first nine months of 2025, including a $22.0 million benefit from the 2025 legal settlement, compared to $978.2 million in 2024, which included a $22.5 million benefit for the final payments received associated with a separate legal matter (the “2024 legal payments”).

Operating expenses as a percentage of net sales rose 60 bps from last year primarily due to increased personnel and other costs.

The effects of the $22.0 million benefit from the 2025 legal settlement and the $22.5 million benefit from the 2024 legal payments (collectively “the legal items”) were included in operating expenses, operating earnings before financial services, and operating earnings in 2025 and 2024, respectively.

As a percentage of net sales, the legal items contributed a 60 bps benefit to operating expenses and operating earnings before financial services in their respective periods.

As a percentage of revenues, operating earnings also included a 60 bps benefit from the legal items in both 2025 and 2024.

Therefore, the legal items had no net effect on these year-over-year comparisons.

Operating earnings before financial services of $780.7 million in the first nine months of 2025 compared to $803.6 million in 2024.

As a percentage of net sales, operating earnings before financial services were 22.2% compared to 22.9% last year.

Financial services revenue of $304.9 million in the first nine months of 2025 compared to $300.5 million last year.

Financial services operating earnings of $207.4 million compared to $210.2 million in the first nine months of 2024.

Operating earnings of $988.1 million in the first nine months of 2025 compared to $1,013.8 million in 2024.

As a percentage of revenues, operating earnings were 25.9% compared to 26.6% last year.

Interest expense in the first nine months of 2025 decreased $0.2 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.

In the first nine months of 2025, other income (expense) – net included $17.9 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.

The effective income tax rate on earnings attributable to Snap-on was 22.4% and 22.6% in the first nine 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.

Net earnings attributable to Snap-on of $756.2 million , or $14.24 per diluted share, in the first nine months of 2025, including a $16.2 million, or $0.31 per diluted share, after-tax benefit from the 2025 legal settlement, compared to $785.8 million , or $14.69 per diluted share, in the first nine months of 2024, which included a $17.5 million, or $0.32 per diluted share, after-tax benefit from th e 2024 legal payments.

Segment Results

9 unchanged sentences

Financial Services consists of the business operations of Snap-on’s finance subsidiaries.

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

The CODM evaluates the performance of the Commercial & Industrial Group, the Snap-on Tools Group and the Repair Systems & Information Group operating segments based on segment net sales and segment operating earnings.

4 unchanged sentences

Intersegment amounts are eliminated to arrive at Snap-on’s consolidated financial results.

SNAP-ON INCORPORATED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATIONS

Commercial & Industrial Group

Three Months Ended

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

(Amounts in millions) September 27, 2025 September 28, 2024 Change

External net sales $ 297.8 81.0 % $ 288.7 78.9 % $ 9.1 3.2 %

5 unchanged sentences

Segment operating earnings $ 57.5 15.6 % $ 61.0 16.7 % $ (3.5) (5.7) %

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

Segment net sales of $367.7 million in the third quarter of 2025 represented an increase of $2.0 million, or 0.5%, from 2024 levels, reflecting $4.8 million of favorable foreign currency translation, partially offset by a $2.8 million, or 0.8%, organic sales decline.

The organic decrease includes a mid single-digit reduction in the segment’s Asia Pacific business, partially offset by low single-digit gains with customers in the critical industry arena and in the specialty torque operation.

Segment gross margin in the third quarter decreased 30 bps from last year due to 30 bps of unfavorable foreign currency effects.

Higher material and other costs were offset by increased sales volumes in the higher-gross-margin critical industry sectors and savings from the segment’s RCI initiatives.

Segment operating expenses as a percentage of net sales in the third quarter rose 80 bps as compared to 2024 primarily reflecting the impact of lower sales in the Asia Pacific business, as well as increased personnel and other costs.

As a result of these factors, segment operating earnings of $57.5 million in the third quarter of 2025 compared to $61.0 million in 2024.

Operating margin (segment operating earnings as a percentage of segment net sales) for the Commercial & Industrial Group of 15.6% in the third quarter of 2025 compared to 16.7% in 2024.

Nine Months Ended

(Amounts in millions) September 27, 2025 September 28, 2024 Change

External net sales $ 863.7 81.5 % $ 884.7 80.6 % $ (21.0) (2.4) %

5 unchanged sentences

Segment operating earnings $ 157.6 14.9 % $ 178.6 16.3 % $ (21.0) (11.8) %

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.

Segment net sales of $1,059.4 million in the first nine months of 2025 represented a decrease of $38.2 million , or 3.5% , from 2024 levels, reflecting a $41.9 million , or 3.8% , organic sales decline, partially offset by $3.7 million of favorable foreign currency translation.

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

SNAP-ON INCORPORATED

1 unchanged sentence

OF OPERATIONS

Segment gross margin in the first nine months decreased 10 bps from last year primarily reflecting the reduced sales volumes and 30 bps of unfavorable currency effects, partially offset by savings from the segment’s RCI initiatives.

Segment operating expenses as a percentage of net sales in the first nine months rose 130 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 $157.6 million in the first nine months of 2025 compared to $178.6 million in 2024.

Operating margin for the Commercial & Industrial Group of 14.9% in the first nine months of 2025 compared to 16.3% in 2024.

Snap-on Tools Group

Three Months Ended

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

(Amounts in millions) September 27, 2025 September 28, 2024 Change

Segment net sales $ 506.0 100.0 % $ 500.5 100.0 % $ 5.5 1.1 %

3 unchanged sentences

Segment operating earnings $ 109.9 21.7 % $ 108.3 21.6 % $ 1.6 1.5 %

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 of $506.0 million in the third quarter of 2025 represented an increase of $5.5 million, or 1.1%, from 2024 levels, reflecting a $4.9 million, or 1.0%, organic sales gain and $0.6 million of favorable foreign currency translation.

The organic improvement was due to a low single-digit rise in the segment’s international operations and slightly higher sales in the U.S.

Segment gross margin in the third quarter decreased 50 bps from last year primarily due to a year-over-year shift in product mix.

Segment operating expenses as a percentage of net sales in the third quarter improved 60 bps as compared to 2024 primarily reflecting the higher sales volumes.

As a result of these factors, segment operating earnings of $109.9 million in the third quarter of 2025 compared to $108.3 million in 2024.

Operating margin for the Snap-on Tools Group of 21.7% in the third quarter of 2025 compared to 21.6% last year.

Nine Months Ended

(Amounts in millions) September 27, 2025 September 28, 2024 Change

Segment net sales $ 1,459.9 100.0 % $ 1,482.6 100.0 % $ (22.7) (1.5) %

3 unchanged sentences

Segment operating earnings $ 319.0 21.9 % $ 340.4 23.0 % $ (21.4) (6.3) %

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.

Segment net sales of $1,459.9 million in the first nine months of 2025 represented a decrease of $22.7 million , or 1.5% , from 2024 levels, reflecting a $20.9 million , or 1.4% , organic sales decline and $1.8 million of unfavorable foreign currency translation.

The organic reduction was 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 nine months decreased 90 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 nine months rose 20 bps as compared to 2024 primarily reflecting the lower sales volumes.

SNAP-ON INCORPORATED

1 unchanged sentence

OF OPERATIONS

As a result of these factors, segment operating earnings of $319.0 million in the first nine months of 2025 compared to $340.4 million in 2024.

Operating margin for the Snap-on Tools Group of 21.9% in the first nine months of 2025 compared to 23.0% last year.

Repair Systems & Information Group

Three Months Ended

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

(Amounts in millions) September 27, 2025 September 28, 2024 Change

External net sales $ 387.0 83.3 % $ 357.8 84.6 % $ 29.2 8.2 %

5 unchanged sentences

Segment operating earnings $ 141.2 30.4 % $ 107.3 25.4 % $ 33.9 31.6 %

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

Segment net sales of $464.8 million in the third quarter of 2025 represented an increase of $42.1 million, or 10.0%, from 2024 levels, reflecting a $38.1 million, or 8.9%, organic sales gain and $4.0 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 low single-digit decline in sales of undercar equipment.

Segment gross margin in the third quarter decreased 40 bps from last year primarily reflecting increased sales of lower-gross-margin products, higher material and other costs, and 20 bps of unfavorable foreign currency effects, partially offset by savings from the segment’s RCI initiatives.

Segment operating expenses in the third quarter of 2025 included a $22.0 million benefit from the 2025 legal settlement.

Segment operating expenses as a percentage of net sales in the third quarter improved 540 bps from 2024 primarily due to a 480 bps benefit from the 2025 legal settlement, as well as from the higher sales volumes.

As a result of these factors, segment operating earnings of $141.2 million in the third quarter of 2025, including a $22.0 million benefit from the 2025 legal settlement, compared to $107.3 million in 2024.

Operating margin for the Repair Systems & Information Group of 30.4% in the third quarter of 2025 compared to 25.4% last year .

Nine Months Ended

(Amounts in millions) September 27, 2025 September 28, 2024 Change

External net sales $ 1,187.7 84.3 % $ 1,141.4 85.1 % $ 46.3 4.1 %

5 unchanged sentences

Segment operating earnings $ 383.1 27.2 % $ 333.8 24.9 % $ 49.3 14.8 %

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.

Segment net sales of $1,409.3 million in the first nine months of 2025 represented an increase of $68.0 million , or 5.1% , from 2024 levels, reflecting a $65.8 million , or 4.9% , organic sales gain and $2.2 million of favorable 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.

Segment gross margin in the first nine months improved 60 bps from last year primarily due to favorable business mix and benefits from the segment’s RCI initiatives, partially offset by higher material and other costs, as well as 20 bps of unfavorable foreign currency effects.

SNAP-ON INCORPORATED

1 unchanged sentence

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.

Segment operating expenses in the first nine months of 2025 included a $22.0 million benefit from the 2025 legal settlement.

Segment operating expenses as a percentage of net sales in the first nine months improved 170 bps from 2024 reflecting a 160 bps benefit from the 2025 legal settlement, while the effects of higher sales volumes and savings from RCI initiatives, were partially offset by increased personnel and other costs.

As a result of these factors, segment operating earnings of $383.1 million in the first nine months of 2025, including a $22.0 million benefit from the 2025 legal settlement, compared to $333.8 million in 2024.

Operating margin for the Repair Systems & Information Group of 27.2% in the first nine months of 2025 compared to 24.9% last year.

Financial Services

Three Months Ended

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

(Amounts in millions) September 27, 2025 September 28, 2024 Change

Financial services revenue $ 101.1 100.0 % $ 100.4 100.0 % $ 0.7 0.7 %

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 $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 revenue of $101.1 million in the third quarter of 2025 represented an increase of $0.7 million, or 0.7%, from last year.

In the third quarters of both 2025 and 2024, the average yield on finance receivables was 17.7% and the average yield on contract receivables was 9.1%.

Originations of $274.1 million in the third quarter of 2025 represented a decrease of $13.9 million, or 4.8%, 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.

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 expenses in the third quarter of 2025 increased $3.5 million from last year primarily due to $2.6 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 1.1% in the respective third quarters of 2025 and 2024.

As a result of these factors, segment operating earnings of $68.9 million in the third quarter of 2025 compared to $71.7 million in 2024.

Nine Months Ended

(Amounts in millions) September 27, 2025 September 28, 2024 Change

Financial services revenue $ 304.9 100.0 % $ 300.5 100.0 % $ 4.4 1.5 %

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Segment operating earnings $ 207.4 68.0 % $ 210.2 70.0 % $ (2.8) (1.3) %

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 .

Financial services revenue of $304.9 million in the first nine months of 2025 represented an increase of $4.4 million , or 1.5% , from last year.

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

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

Originations of $835.8 million in the first nine months of 2025 represented a decrease of $62.0 million , or 6.9% , from 2024 levels.

Financial services expenses i n the first nine months of 2025 increased $7.2 million from last year primarily due to $4.4 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 3.9% and 3.6% in the respective first nine months of 2025 and 2024.

As a result of these factors, segment operating earnings of $207.4 million in the first nine months of 2025 compared to $210.2 million in 2024.

Snap-on’s third quarter 2025 general corporate expenses of $30.1 million compared to $24.2 million last year.

The year-over-year increase in general corporate expenses primarily reflects higher stock-based compensation and brand-building costs.

SNAP-ON INCORPORATED

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OF OPERATIONS

For the first nine months of 2025, general corporate exp enses of $79.0 million compared to $49.2 million in 2024.

The year-over-year increase primarily reflects benefits from the 2024 legal p ayments received in the first nine months of 2024, as well as higher brand-building costs in 2025.

Non-GAAP Supplemental Data

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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 June 28, 2025, and June 29, 2024, is as follows:

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Statements of Earnings information for the three months ended September 27, 2025, and September 28, 2024, is as follows:

Operations* Financial Services

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

(Amounts in millions) September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024

Net sales $ 1,190.8 $ 1,147.0 $ — $ —

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OF OPERATIONS

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:

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Statements of Earnings information for the nine months ended September 27, 2025, and September 28, 2024, is as follows:

Operations* Financial Services

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

(Amounts in millions) September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024

Net sales $ 3,511.3 $ 3,508.7 $ — $ —

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OF OPERATIONS

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

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Balance Sheets information as of September 27, 2025, and December 28, 2024, is as follows:

Operations* Financial Services

(Amounts in millions) June 28,

2025 December 28, 2024 June 28,

(Amounts in millions) September 27,

2025 December 28, 2024 September 27,

2025 December 28, 2024

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Operations* Financial Services

(Amounts in millions) June 28,

2025 December 28, 2024 June 28,

(Amounts in millions) September 27,

2025 December 28, 2024 September 27,

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 July 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 October 10, 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 $3,278.1 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,

Working capital (current assets less current liabilities) of $3,388.5 million as of September 27, 2025, represented an increase of $360.6 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 September 27, 2025, and December 28, 2024:

(Amounts in millions) September 27,

2025 December 28, 2024

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Working capital $ 3,388.5 $ 3,027.9

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:

Cash and cash equivalents of $1,534.1 million as of September 27, 2025, represented an increase of $173.6 million from 2024 year-end levels primarily due to:

(i) $813.6 million of cash generated from operations;

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and (iv) the funding of $62.5 million of capital expenditures.

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.

Of the $1,534.1 million of cash and cash equivalents as of September 27, 2025, $604.3 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 $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.

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 June 28, 2025, and December 28, 2024.

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.

Trade and other accounts receivable – net of $925.7 million as of September 27, 2025, represented an increase of $110.1 million from 2024 year-end levels.

The increase primarily reflects a higher mix of sales with longer payment terms, $25.1 million of foreign currency translation, and $17.7 million from the 2025 legal settlement.

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 71 days for September 27, 2025, and 62 days for December 28, 2024.

The current portions of net finance and contract receivables of $751.6 million as of September 27, 2025, compared to $730.3 million at 2024 year end.

The long-term portions of net finance and contract receivables of $1,714.5 million as of September 27, 2025, compared to $1,730.3 million at 2024 year end.

Inventories – net of $1,024.5 million as of September 27, 2025, represented an increase of $81.1 million from December 28, 2024, primaril y due to uncertainty in the current trade environment and $38.9 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 2.3 turns and 2.4 turns as of September 27, 2025, and December 28, 2024, respectively.

Inventories accounted for using the first-in, first-out (“FIFO”) method approximated 63% of total inventories as of September 27, 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 $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:

The company’s LIFO reserve was $126.8 million and $122.4 million as of September 27, 2025, and December 28, 2024, respectively.

Notes payable of $21.3 million as of September 27, 2025, compared to $13.7 million as of 2024 year end.

Accounts payable of $271.3 million as of September 27, 2025, represented an increase of $5.4 million from December 28, 2024, primarily due to $7.5 million of foreign currency translation.

Other accrued liabilities of $483.8 million as of September 27, 2025, represented an increase of $26.1 million from 2024 year-end levels primarily due to an increase in accrued income taxes and $12.5 million of foreign currency translation.

Long-term debt of $1,186.2 million as of September 27, 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 six months ended and as of June 28, 2025.

No amounts were borrowed or outstanding under the Credit Facility during the nine months ended and as of September 27, 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 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.

As of September 27, 2025, the company’s consolidated cash balance, net of certain adjustments, exceeded consolidated debt resulting in actual ratios of (0.04) and (0.16), 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 June 28, 2025, there were no commercial paper issuances outstanding.

As of September 27, 2025, there were no commercial paper issuances outstanding.

SNAP-ON INCORPORATED

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Operating Activities

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.

Net cash provided by operating activities was $813.6 million and $924.0 million in the respective first nine months of 2025 and 2024.

The $110.4 million year-over-year decrease in net cash provided by operating activities primarily reflects an $88.8 million change in net operating assets and liabilities and a $29.4 million decrease in net earnings.

Investing Activities

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.

Net cash used by investing activities of $99.0 million in the first nine months of 2025 included additions to finance receivables of $678.4 million, partially offset by collections of $642.5 million.

Net cash used by investing activities of $163.9 million in the first nine months of 2024 included additions to finance receivables of $731.3 million, partially offset by collections of $629.3 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 $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.

Capital expenditures were $62.5 million and $65.4 million in the respective first nine months of 2025 and 2024.

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

Financing Activities

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.

Net cash used by financing activities was $545.4 million in the first nine months of 2025 and $448.3 million in the first nine months of 2024.

Proceeds from stock purchase plans and stock option exercises totaled $60.0 million and $61.6 million in the respective first nine months of 2025 and 2024.

In the first nine months of 2025, Snap-on repurchased 760,000 shares of its common stock for $248.2 million under its previously announced share repurchase programs.

In the first nine months of 2024, Snap-on repurchased 637,000 shares of its common stock for $177.5 million under its previously announced share repurchase programs.

As of September 27, 2025, Snap-on had remaining availability to repurchase up to an additional $306.0 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 $224.0 million and $196.2 million in the respective first six months of 2025 and 2024.

Cash dividends totaled $335.5 million and $294.1 million in the respective first nine 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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We believe that our markets and our operations possess and have demonstrated continuing and considerable resilience against the uncertainties of the current environment.

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 $42.6 million was incurred in the first six months of the year.

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 $62.5 million was incurred in the first nine 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