What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-10-22 compared with 2026-07-23 · 151 added, 151 removed, 390 unchanged (44% of the section changed)

46 unchanged sentences

On April 30, 2026, Snap-on acquired Hi-Force Group Holdings Ltd.

(“Hi-Force”) for a preliminary cash purchase price of $58.0 million (or $54.9 million, net of cash acquired).

(“Hi-Force”) for a cash purchase price of $57.2 million (or $54.2 million, net of cash acquired).

Hi-Force, based in Daventry, United Kingdom, designs and manufactures high-pressure hydraulic tools, heavy lifting systems, as well as torque and tensioning equipment.

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RESULTS OF OPERATIONS

Results of operations for the three months ended July 4, 2026, and June 28, 2025, are as follows:

Results of operations for the three months ended October 3, 2026, and September 27, 2025, are as follows:

Three Months Ended

(Amounts in millions) July 4, 2026 June 28, 2025 Change

(Amounts in millions) October 3, 2026 September 27, 2025 Change

Net sales $ 1,183.7 100.0 % $ 1,190.8 100.0 % $ (7.1) (0.6) %

16 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 $1,235.1 million in the second quarter of 2026 represented an increase of $55.7 million , or 4.7% , from 2025 levels, reflecting a $35.5 million, or 3.0%, organic gain, $11.5 million of acquisition-related sales, and $8.7 million of favorable foreign currency translation.

Gross profit of $635.2 million in the second quarter of 2026 compared to $595.5 million last year.

Gross margin (gross profit as a percentage of net sales) in the quarter improved 90 basis points (100 basis points (“bps”) equals 1.0 percent) from the second quarter of 2025 primarily reflecting the increased sales volumes and benefits from the company’s “Rapid Continuous Improvement” or “RCI” initiatives.

Net sales of $1,183.7 million in the third quarter of 2026 represented a decrease of $7.1 million , or 0.6% , from 2025 levels, reflecting a $33.1 million, or 2.8%, organic decline, partially offset by $25.6 million of acquisition-related sales and $0.4 million of favorable foreign currency translation.

Gross profit of $603.6 million in the third quarter of 2026 compared to $605.9 million last year.

Gross margin (gross profit as a percentage of net sales) in the quarter of 51.0% improved 10 basis points (100 basis points (“bps”) equals 1.0 percent) from the third quarter of 2025 primarily reflecting benefits from the company’s “Rapid Continuous Improvement” or “RCI” initiatives, partially offset by higher material costs.

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.

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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 $366.3 million in the second quarter of 2026 compared to $336.4 million in 2025.

Operating expenses as a percentage of net sales rose 110 bps from last year primarily due to increased personnel and other costs.

Operating earnings before financial services of $268.9 million in the second quarter of 2026 compared to $259.1 million in 2025.

As a percentage of net sales, operating earnings before financial services were 21.8% compared to 22.0% last year.

Financial services revenue of $99.7 million in the second quarter of 2026 compared to $101.7 million last year.

Financial services operating earnings of $67.5 million compared to $68.2 million in 2025.

Operating expenses of $355.5 million in the third quarter of 2026 compared to $327.4 million in 2025, which included a $22.0 million benefit from the settlement of a legal matter (the “legal settlement”).

Operating expenses as a percentage of net sales rose 250 bps from last year primarily due to a 190 bps non-recurring benefit from the legal settlement in 2025, as well as from increased brand building and other costs.

Operating earnings before financial services of $248.1 million in the third quarter of 2026 compared to $278.5 million in 2025, which included a $22.0 million benefit from the legal settlement.

As a percentage of net sales, operating earnings before financial services were 21.0% compared to 23.4% last year, which included a 190 bps benefit from the legal settlement.

SNAP-ON INCORPORATED

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OF OPERATIONS

Operating earnings of $336.4 million in the second quarter of 2026 compared to $327.3 million in 2025.

As a percentage of revenues (net sales plus financial services revenue), operating earnings in the quarter were 25.2% compared to 25.5% last year.

Interest expense in the second quarter of 2026 of $12.3 million was unchanged from last year.

See Note 8 to the Condensed Consolidated Financial Statements for additional information on debt and credit facilities.

Financial services revenue of $98.6 million in the third quarter of 2026 compared to $101.1 million last year.

Financial services operating earnings of $68.3 million compared to $68.9 million in 2025.

Operating earnings of $316.4 million in the third quarter of 2026 compared to $347.4 million in 2025, which included a $22.0 million benefit from the legal settlement.

As a percentage of revenues (net sales plus financial services revenue), operating earnings in the quarter were 24.7% compared to 26.9% last year, which included a 170 bps benefit from the legal settlement.

Interest expense in the third quarter of 2026 of $12.5 million increased $0.1 million from last year.

See Note 8, Short-term and Long-term Debt, 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.

See Note 16 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 in the second quarter was 21.9% in 2026 and 22.5% in 2025.

See Note 7 to the Condensed Consolidated Financial Statements for additional information on income taxes.

Net earnings attributable to Snap-on of $260.6 million, or $4.96 per diluted share, in the second quarter of 2026 compared to $250.3 million, or $4.72 per diluted share, in the second quarter of 2025.

Results of operations for the six months ended July 4, 2026, and June 28, 2025 are as follows:

Six Months Ended

(Amounts in millions) July 4, 2026 June 28, 2025 Change

See Note 16, Other Income (Expense) – Net, to the Condensed Consolidated Financial Statements for additional information.

The effective income tax rate on earnings attributable to Snap-on in the third quarter was 22.3% in 2026 and 22.6% in 2025.

See Note 7, Income Taxes, to the Condensed Consolidated Financial Statements for additional information.

Net earnings attributable to Snap-on of $243.0 million, or $4.64 per diluted share, in the third quarter of 2026 compared to $265.4 million, or $5.02 per diluted share, in the third quarter of 2025, which included a $16.2 million, or $0.31 per diluted share, after-tax benefit from the legal settlement.

Results of operations for the nine months ended October 3, 2026, and September 27, 2025 are as follows:

Nine Months Ended

(Amounts in millions) October 3, 2026 September 27, 2025 Change

Net sales $ 3,626.0 100.0 % $ 3,511.3 100.0 % $ 114.7 3.3 %

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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 $2,442.3 million in the first six months of 2026 represented an increase of $121.8, or 5.2%, from 2025 levels, reflecting a $74.7 million, or 3.2%, organic gain, $35.6 million of favorable foreign currency translation, and $11.5 million of acquisition-related sales.

Gross profit of $1,243.5 million in the first six months 2026 compared to $1,174.0 million last year.

Gross margin in the first six months improved 30 basis points from 2025 primarily reflecting the benefit of increased volume and savings from the company’s RCI initiatives, partially offset by higher material and other costs, as well as 20 bps of unfavorable foreign currency effects.

Net sales of $3,626.0 million in the first nine months of 2026 represented an increase of $114.7, or 3.3%, from 2025 levels, reflecting a $41.6 million, or 1.2%, organic gain, $37.1 million of acquisition-related sales, and $36.0 million of favorable foreign currency translation.

SNAP-ON INCORPORATED

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OF OPERATIONS

Operating expenses of $723.8 million in the first six months of 2026 compared to $671.8 million in 2025.

Operating expenses as a percentage of net sales rose 60 bps from last year primarily reflecting increased personnel costs and expanded technology investments, partially offset by the favorable effects of sales volume.

Operating earnings before financial services of $519.7 million in the first six months of 2026 compared to $502.2 million in 2025.

As a percentage of net sales, operating earnings before financial services were 21.3% including 20 bps of unfavorable foreign currency effects and compared to 21.6% last year.

Financial services revenue of $200.8 million in the first six months of 2026 compared to $203.8 million last year.

Gross profit of $1,847.1 million in the first nine months 2026 compared to $1,779.9 million last year.

Gross margin in the first nine months of 50.9% improved 20 basis points from 2025 primarily reflecting favorable business mix and savings from the company’s RCI initiatives, partially offset by higher material and other costs.

Operating expenses of $1,079.3 million in the first nine months of 2026 compared to $999.2 million in 2025, which included a $22.0 million benefit from the legal settlement.

Operating expenses as a percentage of net sales rose 120 bps from last year primarily due to a 60 bps benefit from the legal settlement in 2025, as well as from increased costs for brand building, personnel, and technology investments.

Operating earnings before financial services of $767.8 million in the first nine months of 2026 compared to $780.7 million in 2025, which included a $22.0 million benefit from the legal settlement.

As a percentage of net sales, operating earnings before financial services were 21.2% compared to 22.2% last year, which included a 60 bps benefit from the legal settlement.

Financial services revenue of $299.4 million in the first nine months of 2026 compared to $304.9 million last year.

Financial services operating earnings of $203.8 million compared to $207.4 million in 2025.

Operating earnings of $655.2 million in the first six months of 2026 compared to $640.7 million in 2025.

As a percentage of revenues, operating earnings in the first six months were 24.8% including 20 bps of unfavorable foreign currency effects and compared to 25.4% last year.

Interest expense in the first six months of 2026 of $24.7 million was unchanged from last year.

See Note 8 to the Condensed Consolidated Financial Statements for additional information on debt and credit facilities.

Operating earnings of $971.6 million in the first nine months of 2026 compared to $988.1 million in 2025, which included a $22.0 million benefit from the legal settlement.

As a percentage of revenues, operating earnings in the first nine months were 24.8% compared to 25.9% last year, which included a 60 bps benefit from the legal settlement.

Interest expense in the first nine months of 2026 of $37.2 million increased $0.1 million from last year.

See Note 8, Short-term and Long-term Debt, to the Condensed Consolidated Financial Statements for additional information on debt and credit facilities.

See Note 16 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 in the first six months was 21.9% in 2026 and 22.3% in 2025.

See Note 7 to the Condensed Consolidated Financial Statements for additional information on income taxes.

Net earnings attributable to Snap-on of $507.6 million, or $9.65 per diluted share, in the first six months of 2026 compared to $490.8 million, or $9.24 per diluted share, in the first six months of 2025.

See Note 16, Other Income (Expense) – Net, to the Condensed Consolidated Financial Statements for additional information.

The effective income tax rate on earnings attributable to Snap-on in the first nine months was 22.1% in 2026 and 22.4% in 2025.

See Note 7, Income Taxes, to the Condensed Consolidated Financial Statements for additional information.

Net earnings attributable to Snap-on of $750.6 million, or $14.30 per diluted share, in the first nine months of 2026 compared to $756.2 million, or $14.24 per diluted share, in the first nine months of 2025, which included a $16.2 million, or $0.31 per diluted share, after-tax benefit from the legal settlement.

Segment Results

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Three Months Ended

(Amounts in millions) July 4, 2026 June 28, 2025 Change

(Amounts in millions) October 3, 2026 September 27, 2025 Change

External net sales $ 324.4 80.2 % $ 297.8 81.0 % $ 26.6 8.9 %

5 unchanged sentences

Segment operating earnings $ 74.7 18.5 % $ 57.5 15.6 % $ 17.2 29.9 %

Segment net sales of $395.8 million in the second quarter of 2026 represented an increase of $48.0 million, or 13.8%, from 2025 levels, reflecting a $38.7 million, or 11.0%, organic gain, $6.8 million of acquisition-related sales, and $2.5 million of favorable foreign currency translation.

The organic improvement reflects increases in each of the segment’s businesses, including double-digit gains in the Asia Pacific, European-based hand tools, specialty torque and power tools operations, as well as a mid single-digit rise in activity with customers in critical industries.

Segment gross margin in the second quarter increased 260 bps from last year primarily due to increased sales and savings from the segment’s RCI initiatives.

Segment operating expenses as a percentage of net sales in the second quarter improved 70 bps as compared to 2025 primarily reflecting the higher sales volumes.

As a result of these factors, segment operating earnings of $66.5 million in the second quarter of 2026 compared to $46.9 million in 2025.

Operating margin (segment operating earnings as a percentage of segment net sales) for the Commercial & Industrial Group of 16.8% in the second quarter of 2026 compared to 13.5% last year.

Six Months Ended

(Amounts in millions) July 4, 2026 June 28, 2025 Change

Segment net sales of $404.3 million in the third quarter of 2026 represented an increase of $36.6 million, or 10.0%, from 2025 levels, reflecting a $27.0 million, or 7.4%, organic gain and $10.0 million of acquisition-related sales, partially offset by $0.4 million of unfavorable foreign currency translation.

The organic improvement primarily reflects a mid single-digit rise in activity with customers in critical industries, double-digit gains in the specialty torque business, and a high single-digit increase in the segment’s Asia Pacific operation.

Segment gross margin in the third quarter improved 60 bps from last year primarily due to increased sales and savings from the segment’s RCI initiatives.

Segment operating expenses as a percentage of net sales in the third quarter improved 230 bps as compared to 2025 primarily reflecting the higher sales volumes and a 130 bps benefit associated with the sale of a building, partially offset by a 40 bps impact from acquisitions.

As a result of these factors, segment operating earnings of $74.7 million in the third quarter of 2026 compared to $57.5 million in 2025.

Operating margin (segment operating earnings as a percentage of segment net sales) for the Commercial & Industrial Group of 18.5% in the third quarter of 2026 compared to 15.6% last year.

Nine Months Ended

(Amounts in millions) October 3, 2026 September 27, 2025 Change

External net sales $ 958.7 81.2 % $ 863.7 81.5 % $ 95.0 11.0 %

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Segment operating earnings $ 196.1 16.6 % $ 157.6 14.9 % $ 38.5 24.4 %

Segment net sales of $776.8 million in the first six months of 2026 represented an increase of $85.1 million, or 12.3%, from 2025 levels, reflecting a $63.9 million, or 9.0%, organic gain, $14.4 million of favorable foreign currency translation, and $6.8 million of acquisition-related sales.

The organic rise reflects double-digit gains in the segment’s Asia Pacific and specialty torque operations, a high single-digit improvement in the European-based hand tools business, and mid single-digit increases with customers in critical industries and in the power tools operation.

Segment gross margin in the first six months improved 20 bps from last year primarily due to increased sales and savings from the segment’s RCI initiatives, partially offset by higher material and other costs, as well as 30 bps of unfavorable foreign currency effects.

Segment operating expenses as a percentage of net sales in the first six months improved 90 bps as compared to 2025 primarily reflecting the higher sales volumes.

As a result of these factors, segment operating earnings of $121.4 million in the first six months of 2026 compared to $100.1 million in 2025.

Operating margin for the Commercial & Industrial Group of 15.6% in the first six months of 2026 included 30 bps of unfavorable foreign currency effects and compared to 14.5% last year.

Segment net sales of $1,181.1 million in the first nine months of 2026 represented an increase of $121.7 million, or 11.5%, from 2025 levels, reflecting a $90.9 million, or 8.5%, organic gain, $16.8 million of acquisition-related sales, and $14.0 million of favorable foreign currency translation.

The organic rise reflects a mid single-digit increase with customers in critical industries, double-digit gains in the segment’s Asia Pacific and specialty torque operations, a mid single-digit improvement in the European-based hand tools business, and a high single-digit rise in power tools.

Segment gross margin in the first nine months improved 30 bps from last year primarily due to increased sales and savings 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 nine months improved 140 bps as compared to 2025 primarily reflecting the higher sales volumes and a 40 bps benefit associated with the sale of a building.

As a result of these factors, segment operating earnings of $196.1 million in the first nine months of 2026 compared to $157.6 million in 2025.

Operating margin for the Commercial & Industrial Group of 16.6% in the first nine months of 2026 compared to 14.9% last year.

SNAP-ON INCORPORATED

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Three Months Ended

(Amounts in millions) July 4, 2026 June 28, 2025 Change

(Amounts in millions) October 3, 2026 September 27, 2025 Change

Segment net sales $ 471.5 100.0 % $ 506.0 100.0 % $ (34.5) (6.8) %

3 unchanged sentences

Segment operating earnings $ 84.8 18.0 % $ 109.9 21.7 % $ (25.1) (22.8) %

Segment net sales of $508.8 million in the second quarter of 2026 represented an increase of $17.8 million, or 3.6%, from 2025 levels, reflecting a $14.9 million, or 3.0%, organic sales gain and $2.9 million of favorable foreign currency translation.

The organic rise was due to low single-digit gains both in the U.S.

and in the segment’s international operations.

Segment gross margin in the second quarter decreased 30 bps from last year primarily reflecting a year-over-year shift in product mix, partially offset by savings from the segment’s RCI initiatives.

Segment operating expenses as a percentage of net sales in the second quarter rose 90 bps as compared to 2025 due to increased personnel, freight and other costs.

As a result of these factors, segment operating earnings of $115.1 million in the second quarter of 2026 compared to $116.7 million in 2025.

Operating margin for the Snap-on Tools Group of 22.6% in the second quarter of 2026 compared to 23.8% last year.

Six Months Ended

(Amounts in millions) July 4, 2026 June 28, 2025 Change

Segment net sales of $471.5 million in the third quarter of 2026 represented a decrease of $34.5 million, or 6.8%, from 2025 levels, reflecting a $35.7 million, or 7.0%, organic sales decline, partially offset by $1.2 million of favorable foreign currency translation.

The organic decrease was due to a high single-digit decline in the U.S.

and a low single-digit reduction in the segment’s international operations.

Segment gross margin in the third quarter decreased 80 bps from last year primarily reflecting the lower sales volumes.

Higher material costs were offset by 60 bps of favorable foreign currency effects.

Segment operating expenses as a percentage of net sales in the third quarter rose 290 bps as compared to 2025 primarily due to the lower sales, as well as increased brand building and other costs.

As a result of these factors, segment operating earnings of $84.8 million in the third quarter of 2026 compared to $109.9 million in 2025.

Operating margin for the Snap-on Tools Group of 18.0% in the third quarter of 2026 compared to 21.7% last year.

Nine Months Ended

(Amounts in millions) October 3, 2026 September 27, 2025 Change

Segment net sales $ 1,466.3 100.0 % $ 1,459.9 100.0 % $ 6.4 0.4 %

3 unchanged sentences

Segment operating earnings $ 304.9 20.8 % $ 319.0 21.9 % $ (14.1) (4.4) %

Segment net sales of $994.8 million in the first six months of 2026 represented an increase of $40.9 million, or 4.3%, from 2025 levels, reflecting a $30.8 million, or 3.2%, organic sales gain and $10.1 million of favorable foreign currency translation.

The organic improvement was due to low single-digit increases both in the U.S.

and in the segment’s international operations.

Segment gross margin in the first six months improved 40 bps from last year primarily due to savings from the segment’s RCI initiatives.

Segment operating expenses as a percentage of net sales in the first six months increased 20 bps as compared to 2025 reflecting increased personnel and other costs.

As a result of these factors, segment operating earnings of $220.1 million in the first six months of 2026 compared to $209.1 million in 2025.

Operating margin for the Snap-on Tools Group of 22.1% in the first six months of 2026 compared to 21.9% last year.

Segment net sales of $1,466.3 million in the first nine months of 2026 represented an increase of $6.4 million, or 0.4%, from 2025 levels, reflecting $11.3 million of favorable foreign currency translation, which was partially offset by a $4.9 million organic sales decline.

The organic decrease was due to slightly lower sales 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 improved 10 bps from last year primarily due to 20 bps of favorable foreign currency effects.

Segment operating expenses as a percentage of net sales in the first nine months increased 120 bps as compared to 2025 primarily reflecting increased brand building, personnel, and other costs.

As a result of these factors, segment operating earnings of $304.9 million in the first nine months of 2026 compared to $319.0 million in 2025.

Operating margin for the Snap-on Tools Group of 20.8% in the first nine months of 2026 compared to 21.9% last year.

SNAP-ON INCORPORATED

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Three Months Ended

(Amounts in millions) July 4, 2026 June 28, 2025 Change

(Amounts in millions) October 3, 2026 September 27, 2025 Change

External net sales $ 387.8 85.3 % $ 387.0 83.3 % $ 0.8 0.2 %

5 unchanged sentences

Segment operating earnings $ 116.1 25.5 % $ 141.2 30.4 % $ (25.1) (17.8) %

Segment net sales of $480.3 million in the second quarter of 2026 represented an increase of $11.7 million, or 2.5%, from 2025 levels, reflecting a $3.2 million, or 0.7%, organic gain, $4.7 million of acquisition-related sales, and $3.8 million of favorable foreign currency translation.

On an organic basis, low single-digit gains in undercar equipment and sales of diagnostic and repair information products to independent repair shop owners and managers were partially offset by a low single-digit decline in activity with OEM dealerships.

Segment gross margin in the second quarter decreased 50 bps from last year primarily reflecting higher sales of lower gross margin products.

Segment operating expenses as a percentage of net sales in the second quarter increased 110 bps from 2025 primarily due to higher personnel and other costs, as well as expanded technology investments.

As a result of these factors, segment operating earnings of $115.1 million in the second quarter of 2026 compared to $119.8 million in 2025.

Operating margin for the Repair Systems & Information Group of 24.0% in the second quarter of 2026 compared to 25.6% last year .

Six Months Ended

(Amounts in millions) July 4, 2026 June 28, 2025 Change

Segment net sales of $454.7 million in the third quarter of 2026 represented a decrease of $10.1 million, or 2.2%, from 2025 levels, reflecting a $25.7 million, or 5.5%, organic decline, which was partially offset by $15.6 million of acquisition-related sales.

The organic decrease is primarily due to a double-digit decline in activity with OEM dealerships and a low single-digit reduction in sales of diagnostic and repair information products to independent repair shop owners and managers.

Segment gross margin in the third quarter improved 110 bps from 2025 primarily reflecting favorable business mix.

Segment operating expenses as a percentage of net sales in the third quarter increased 600 bps from last year primarily due to a $22.0 million, or 480 bps, non-recurring benefit from the legal settlement in 2025, as well as from the lower sales volumes.

As a result of these factors, segment operating earnings of $116.1 million in the third quarter of 2026 compared to $141.2 million in 2025, which included a $22.0 million benefit from the legal settlement.

Operating margin for the Repair Systems & Information Group of 25.5% in the third quarter of 2026 compared to 30.4% last year, which included a 480 bps benefit from the legal settlement.

Nine Months Ended

(Amounts in millions) October 3, 2026 September 27, 2025 Change

External net sales $ 1,201.0 84.6 % $ 1,187.7 84.3 % $ 13.3 1.1 %

5 unchanged sentences

Segment operating earnings $ 350.7 24.7 % $ 383.1 27.2 % $ (32.4) (8.5) %

Segment net sales of $965.6 million in the first six months of 2026 represented an increase of $21.1 million, or 2.2%, from 2025 levels, reflecting a $3.5 million, or 0.4%, organic gain, $12.9 million of favorable foreign currency translation, and $4.7 million of acquisition-related sales.

On an organic basis, low single-digit gains in undercar equipment and sales of diagnostic and repair information products to independent repair shop owners and managers were offset by a low single-digit decrease in activity with OEM dealerships.

Segment gross margin in the first six months decreased 10 bps from last year primarily reflecting higher material costs and 30 bps of unfavorable foreign currency effects, mostly offset by favorable business mix and savings from the segment’s RCI initiatives.

Segment operating expenses as a percentage of net sales in the first six months increased 120 bps from 2025 primarily due to higher personnel and other costs, as well as expanded technology investments.

As a result of these factors, segment operating earnings of $234.6 million in the first six months of 2026 compared to $241.9 million in 2025.

Operating margin for the Repair Systems & Information Group of 24.3% in the first six months of 2026 included 40 bps of unfavorable foreign currency effects and compared to 25.6% last year.

Segment net sales of $1,420.3 million in the first nine months of 2026 represented an increase of $11.0 million, or 0.8%, from 2025 levels, reflecting $20.3 million of acquisition-related sales and $12.9 million of favorable foreign currency translation, partially offset by a $22.2 million, or 1.6%, organic decline.

The organic decrease is primarily due to a mid single-digit reduction in activity with OEM dealerships, partially offset by low single-digit gains in undercar equipment.

Segment gross margin in the first nine months improved 30 bps from 2025 primarily reflecting favorable business mix and savings from the segment’s RCI initiatives, partially offset by higher material costs.

Segment operating expenses as a percentage of net sales in the first nine months rose 280 bps from last year primarily due to a $22.0 million, or 160 bps, benefit from the legal settlement in 2025, higher personnel and other costs, as well as expanded technology investments.

As a result of these factors, segment operating earnings of $350.7 million in the first nine months of 2026 compared to $383.1 million in 2025, which included a $22.0 million benefit from the legal settlement.

Operating margin for the Repair Systems & Information Group of 24.7% in the first nine months of 2026 compared to 27.2% last year, which included a 160 bps benefit from the legal settlement.

SNAP-ON INCORPORATED

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Three Months Ended

(Amounts in millions) July 4, 2026 June 28, 2025 Change

(Amounts in millions) October 3, 2026 September 27, 2025 Change

Financial services revenue $ 98.6 100.0 % $ 101.1 100.0 % $ (2.5) (2.5) %

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 $99.7 million in the second quarter of 2026 represented a decrease of $2.0 million, or 2.0%, from last year, primarily due to the lower year-over-year average portfolio.

In the second quarters of 2026 and 2025, the respective average yields on finance receivables were 17.6% and 17.5% .

In the second quarters of 2026 and 2025, the average yields on contract receivables were 9.0% and 9.1% , respectively.

Originations of $281.0 million in the second quarter of 2026 represented a decrease of $12.0 million, or 4.1%, from 2025 levels.

Financial services revenue of $98.6 million in the third quarter of 2026 represented a decrease of $2.5 million, or 2.5%, from last year, primarily due to the lower year-over-year average portfolio.

In the third quarters of both 2026 and 2025, the average yield on finance receivables was 17.7% and the average yield on contract receivables was 9.1%.

Originations of $270.6 million in the third quarter of 2026 represented a decrease of $3.5 million, or 1.3%, from 2025 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 2026 decreased $1.3 million from last year primarily due to lower provisions for credit losses.

As a percentage of the average financial services portfolio, expenses were 1.3% in the second quarters of both 2026 and 2025.

As a result of these factors, segment operating earnings of $67.5 million in the second quarter of 2026 compared to $68.2 million in 2025.

Six Months Ended

(Amounts in millions) July 4, 2026 June 28, 2025 Change

Financial services expenses in the third quarter of 2026 decreased $1.9 million from last year primarily due to a $2.3 million reduction in provisions for credit losses.

As a percentage of the average financial services portfolio, expenses were 1.2% and 1.3% in the respective third quarters of 2026 and 2025.

As a result of these factors, segment operating earnings of $68.3 million in the third quarter of 2026 compared to $68.9 million in 2025.

Nine Months Ended

(Amounts in millions) October 3, 2026 September 27, 2025 Change

Financial services revenue $ 299.4 100.0 % $ 304.9 100.0 % $ (5.5) (1.8) %

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Segment operating earnings $ 203.8 68.1 % $ 207.4 68.0 % $ (3.6) (1.7) %

Financial services revenue of $200.8 million in the first six months of 2026 represented a decrease of $3.0 million, or 1.5%, from last year, primarily reflecting the lower year-over-year average portfolio.

In the first six months of both 2026 and 2025, the average yield on finance receivables was 17.6% and the average yield on contract receivables was 9.1%.

Originations of $545.6 million in the first six months of 2026 represented a decrease of $16.1 million, or 2.9%, from 2025 levels.

Financial services expenses in the first six months of 2026 were unchanged from last year.

As a percentage of the average financial services portfolio, expenses were 2.6% in the first six months of both 2026 and 2025.

As a result of these factors, segment operating earnings of $135.5 million in the first six months of 2026 compared to $138.5 million in 2025.

Snap-on’s second quarter 2026 general corporate expenses of $27.8 million compared to $24.3 million last year.

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

For the first six months of 2026, general corporate expenses of $56.4 million compared to $48.9 million in 2025.

Financial services revenue of $299.4 million in the first nine months of 2026 represented a decrease of $5.5 million, or 1.8%, from last year, primarily reflecting the lower year-over-year average portfolio.

In the first nine months of both 2026 and 2025, the average yield on finance receivables was 17.6% and the average yield on contract receivables was 9.1%.

Originations of $816.2 million in the first nine months of 2026 represented a decrease of $19.6 million, or 2.3%, from 2025 levels.

Financial services expenses in the first nine months of 2026 decreased $1.9 million from last year primarily reflecting a $3.6 million reduction in provisions for credit losses, partially offset by higher operating costs.

As a percentage of the average financial services portfolio, expenses were 3.8% and 3.9% in the respective first nine months of 2026 and 2025.

As a result of these factors, segment operating earnings of $203.8 million in the first nine months of 2026 compared to $207.4 million in 2025.

Snap-on’s third quarter 2026 general corporate expenses of $27.5 million compared to $30.1 million last year.

The year-over-year decrease in general corporate expenses primarily reflects lower performance-based compensation costs.

For the first nine months of 2026, general corporate expenses of $83.9 million compared to $79.0 million in 2025.

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

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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 July 4, 2026, and June 28, 2025, is as follows:

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Statements of Earnings information for the three months ended October 3, 2026, and September 27, 2025, is as follows:

Operations* Financial Services

(Amounts in millions) July 4,

2026 June 28,

(Amounts in millions) October 3,

2026 September 27,

2025 October 3,

2026 September 27,

Net sales $ 1,183.7 $ 1,190.8 $ — $ —

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OF OPERATIONS

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Statements of Earnings information for the six months ended July 4, 2026, and June 28, 2025, is as follows:

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Statements of Earnings information for the nine months ended October 3, 2026, and September 27, 2025, is as follows:

Operations* Financial Services

(Amounts in millions) July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025

(Amounts in millions) October 3, 2026 September 27, 2025 October 3, 2026 September 27, 2025

Net sales $ 3,626.0 $ 3,511.3 $ — $ —

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OF OPERATIONS

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Balance Sheets information as of July 4, 2026, and January 3, 2026, is as follows:

Non-GAAP Supplemental Consolidating Data – Supplemental Condensed Balance Sheets information as of October 3, 2026, and January 3, 2026, is as follows:

Operations* Financial Services

(Amounts in millions) July 4,

2026 January 3, 2026 July 4,

(Amounts in millions) October 3,

2026 January 3, 2026 October 3,

2026 January 3, 2026

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Operations* Financial Services

(Amounts in millions) July 4,

2026 January 3, 2026 July 4,

(Amounts in millions) October 3,

2026 January 3, 2026 October 3,

2026 January 3, 2026

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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 17, 2026, Snap-on’s long-term debt and commercial paper were rated, respectively, A2 and P-1 by Moody’s Investors Service;

As of October 16, 2026, 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 $3,205.8 million as of July 4, 2026, represented a decrease of $278.5 million from $3,484.3 million as of January 3, 2026 (fiscal 2025 year end), primarily as a result of the net changes discussed below.

The following represents the company’s working capital position as of July 4, 2026, and January 3, 2026:

(Amounts in millions) July 4,

Working capital (current assets less current liabilities) of $3,274.6 million as of October 3, 2026, represented a decrease of $209.7 million from $3,484.3 million as of January 3, 2026 (fiscal 2025 year end), primarily as a result of the net changes discussed below.

The following represents the company’s working capital position as of October 3, 2026, and January 3, 2026:

(Amounts in millions) October 3,

2026 January 3, 2026

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Working capital $ 3,274.6 $ 3,484.3

Cash and cash equivalents of $1,644.7 million as of July 4, 2026, represented an increase of $20.2 million from 2025 year-end levels primarily due to:

Cash and cash equivalents of $1,670.0 million as of October 3, 2026, represented an increase of $45.5 million from 2025 year-end levels primarily due to:

(i) $887.9 million of cash generated from operations;

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and (v) the funding of $69.0 million of capital expenditures.

Of the $1,644.7 million of cash and cash equivalents as of July 4, 2026, $580.2 million was held outside of the United States.

Of the $1,670.0 million of cash and cash equivalents as of October 3, 2026, $591.6 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 $942.2 million as of July 4, 2026, represented an increase of $60.8 million from 2025 year-end levels.

The increase is primarily due to higher sales and $12.2 million from acquisitions, partially offset by $4.7 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 70 days for July 4, 2026, and 67 days for January 3, 2026.

The current portions of net finance and contract receivables of $718.7 million as of July 4, 2026, compared to $720.2 million at 2025 year end.

The long-term portions of net finance and contract receivables of $1,684.6 million as of July 4, 2026, compared to $1,721.9 million at 2025 year end.

Inventories – net of $1,045.3 million as of July 4, 2026, represented an increase of $20.1 million from January 3, 2026, primaril y due to $17.6 million from acquisitions.

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 July 4, 2026, and January 3, 2026.

Inventories accounted for using the first-in, first-out (“FIFO”) method approximated 62% of total inventories as of both July 4, 2026, and January 3, 2026.

Trade and other accounts receivable – net of $922.1 million as of October 3, 2026, represented an increase of $40.7 million from 2025 year-end levels.

The increase is primarily due to a higher mix of sales with longer payment terms and $12.2 million from acquisitions, partially offset by $4.2 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 68 days for October 3, 2026, and 67 days for January 3, 2026.

The current portions of net finance and contract receivables of $719.3 million as of October 3, 2026, compared to $720.2 million at 2025 year end.

The long-term portions of net finance and contract receivables of $1,673.9 million as of October 3, 2026, compared to $1,721.9 million at 2025 year end.

Inventories – net of $1,079.6 million as of October 3, 2026, represented an increase of $54.4 million from January 3, 2026, primarily due to uncertainty in the current trade environment and $18.5 million from acquisitions, partially offset by $8.0 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 as of October 3, 2026, and 2.4 turns as of January 3, 2026.

Inventories accounted for using the first-in, first-out (“FIFO”) method approximated 60% and 62% of total inventories for the periods ended October 3, 2026, and January 3, 2026, respectively.

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

The company’s LIFO reserve was $128.5 million and $126.7 million as of July 4, 2026, and January 3, 2026, respectively.

Notes payable and current maturities of long-term debt of $317.0 million as of July 4, 2026, reflected the $300 million unsecured 3.25% notes that Snap-on currently intends to repay with available cash on hand at maturity on March 1, 2027, and other notes of $17.2 million.

The company’s LIFO reserve was $133.8 million and $126.7 million as of October 3, 2026, and January 3, 2026, respectively.

Notes payable and current maturities of long-term debt of $317.9 million as of October 3, 2026, reflected the $300 million unsecured 3.25% notes that Snap-on currently intends to repay with available cash on hand at maturity on March 1, 2027, and other notes of $18.1 million.

As of 2025 year end, notes payable and current maturities of long-term debt were $16.2 million.

Accounts payable of $267.4 million as of July 4, 2026, represented an increase of $38.3 million from January 3, 2026, primarily due to the timing of payments and $11.3 million from acquisitions, partially offset by $3.5 million of foreign currency translation.

Other accrued liabilities of $535.5 million as of July 4, 2026, represented an increase of $70.4 million from 2025 year-end levels primarily due to an increase in accrued income taxes and $13.0 million from acquisitions, partially offset by $2.6 million of foreign currency translation.

Long-term debt of $887.0 million as of July 4, 2026, consisted of $400 million of unsecured 4.1% notes that mature on March 1, 2048, and $500 million of unsecured 3.1% notes that mature on May 1, 2050, partially offset by $13.0 million of unamortized debt issuance costs and issuance discounts.

Accounts payable of $264.3 million as of October 3, 2026, represented an increase of $35.2 million from January 3, 2026, primarily due to the timing of payments and $11.3 million from acquisitions, partially offset by $3.2 million of foreign currency translation.

Other accrued liabilities of $500.1 million as of October 3, 2026, represented an increase of $35.0 million from 2025 year-end levels primarily due to $13.0 million from acquisitions and an increase in accrued income taxes, partially offset by $2.2 million of foreign currency translation.

Long-term debt of $887.2 million as of October 3, 2026, consisted of $400 million of unsecured 4.1% notes that mature on March 1, 2048, and $500 million of unsecured 3.1% notes that mature on May 1, 2050, partially offset by $12.8 million of unamortized debt issuance costs and issuance discounts.

Snap-on has a $900 million multicurrency revolving credit facility that terminates on September 12, 2028 (the “Credit Facility”).

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 July 4, 2026.

No amounts were borrowed or outstanding under the Credit Facility during the nine months ended and as of October 3, 2026.

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 July 4, 2026, the company’s consolidated cash balance, net of certain adjustments, exceeded consolidated debt resulting in actual ratios of (0.05) and (0.21), respectively.

As of October 3, 2026, the company’s consolidated cash balance, net of certain adjustments, exceeded consolidated debt resulting in actual ratios of (0.05) and (0.22), respectively.

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

Snap-on may issue commercial paper to fund future financing needs on a short-term basis, with the Credit Facility as back-up liquidity to support such commercial paper issuances.

There was no commercial paper issued or outstanding during the six months ended and as of July 4, 2026 .

There was no commercial paper issued or outstanding during the nine months ended and as of October 3, 2026 .

SNAP-ON INCORPORATED

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Operating Activities

Net cash provided by operating activities was $640.2 million and $535.7 million in the respective first six months of 2026 and 2025.

The $104.5 million year-over-year increase in net cash provided by operating activities primarily reflects a $73.6 million change in net operating assets and liabilities and a $16.2 million increase in net earnings.

Net cash provided by operating activities was $887.9 million and $813.6 million in the respective first nine months of 2026 and 2025.

The $74.3 million year-over-year increase in net cash provided by operating activities primarily reflects a $62.7 million improvement in net operating assets and liabilities.

Investing Activities

Net cash used by investing activities of $223.7 million in the first six months of 2026 included additions to finance receivables of $456.0 million, partially offset by collections of $435.1 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 $242.0 million in the first nine months of 2026 included additions to finance receivables of $668.3 million, partially offset by collections of $647.1 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.

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.

Net cash used for acquisitions in the first six months of 2026 totaled $159.1 million.

Capital expenditures were $44.3 million and $42.6 million in the respective first six months of 2026 and 2025.

Net cash used for acquisitions in the first nine months of 2026 totaled $158.4 million.

Capital expenditures were $69.0 million and $62.5 million in the respective first nine months of 2026 and 2025.

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 $396.9 million in the first six months of 2026 and $364.5 million in the first six months of 2025.

Proceeds from stock purchase plans and stock option exercises totaled $67.1 million and $45.2 million in the respective first six months of 2026 and 2025.

In the first six months of 2026, Snap-on repurchased 508,000 shares of its common stock for $191.3 million under its previously announced share repurchase programs.

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.

As of July 4, 2026, Snap-on had remaining availability to repurchase up to an additional $485.5 million in common stock pursuant to its Board’s authorizations.

Net cash used by financing activities was $602.2 million in the first nine months of 2026 and $545.4 million in the first nine months of 2025.

Proceeds from stock purchase plans and stock option exercises totaled $81.1 million and $60.0 million in the respective first nine months of 2026 and 2025.

In the first nine months of 2026, Snap-on repurchased 728,500 shares of its common stock for $278.4 million under its previously announced share repurchase programs.

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.

As of October 3, 2026, Snap-on had remaining availability to repurchase up to an additional $431.2 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 $253.2 million and $224.0 million in the respective first six months of 2026 and 2025.

Cash dividends totaled $379.3 million and $335.5 million in the respective first nine months of 2026 and 2025.

On November 6, 2025, the Board increased the quarterly cash dividend by 14.0% to $2.44 per share ($9.76 per share annualized).

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Snap-on expects to make ongoing progress along its decisive runways for coherent growth, leveraging capabilities already proven in the automotive repair arena, developing and expanding its professional customer base, not only in automotive repair, but in adjacent markets, additional geographies and other areas, including extending in critical industries, where the cost and penalties for failure are high.

In pursuit of these initiatives, we project that capital expenditures in 2026 will approximate $100 million, of which $44.3 million was incurred in the first six months of the year.

In pursuit of these initiatives, we project that capital expenditures in 2026 will approximate $100 million, of which $69.0 million was incurred in the first nine months of the year.

Snap-on currently anticipates that its full-year 2026 effective income tax rate will approximate 22%.

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