Snap-on Inc. turned in sold results for the second quarter of 2013, with net income up 15.5 percent to $90.70 million and net sales up 3.6 percent to $764.10 million. Excluding $4.70 million in unfavorable foreign currency translation and $8.50 million in sales from the May 2013 acquisition of Challenger Lifts, total organic sales were up 3.1 percent
The Tools Group saw its operating earnings rise 22.5 percent to $54.50 million in the second quarter and its net sales increase 6.5 percent to $346.20 million. Excluding $1.50 million of unfavorable foreign currency translation, group organic sales were up 7.0 percent, reflecting sales gains across both the United States and international franchise operations
For the Tools Group, big-ticket sales were significant growth drivers in the period. In particular, diagnostic products and tool storage units were strong. “It’s important for us, because we believe that big-ticket activity provides meaningful evidence of the financial well-being of our customers,” Chairman and CEO Nick Pinchuk explained on a July 18 conference call. “And, it’s a good barometer on the overall health of the auto repair sector.”
“Those big-ticket sales are being supported by Snap-on Credit. It’s an important advantage for us,” Pinchuk added. “Not only is Credit helping to drive big-ticket activity in North America, but we are now extending some of that advantage to the international van operation. The well-established programs and expertise we’ve developed here are being applied in places like the U.K. and Australia … improving service, increasing customer satisfaction and driving more growth.”
Meanwhile, the company’s Repair Systems & Information Group saw its operating earnings increase 8.6 percent to $56.70 million and its net sales rise 8.3 percent to $246.20 million in the second quarter of 2013. Excluding the $8.50 million in sales from Challenger and $800,000 of unfavorable foreign currency translation, group organic sales were up 4.9 percent
Primary drivers were a high single-digit gain in sales to OEM dealerships, as well as a mid single-digit gain in sales of diagnostics and repair information products to independent repair shops. Undercar equipment sales were flat due, in part, to declines in Europe, where Snap-on has a relatively large position. — Marc Vincent
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