Snap-on (SNA -0.30%) reported its fiscal 2025 second quarter results on July 17, 2025, with revenues flat at $1.18 billion and organic sales down 0.7%. EPS of $4.72 (GAAP) was impacted by a $0.09 per share increase in pension amortization costs. In terms of its year-over-year comparison, the company also lacked the benefit of the $11.2 million ($0.16 per share) legal payment it received in Q2 2024, when EPS was $5.07. Operating margin was down 180 basis points to 22% as strategic investment continued amid ongoing macroeconomic turbulence and market volatility.

Tools Group Pivot and Product Innovation Drive U.S. Growth

Organic sales in Snap-on's tools group increased 1.6%, with U.S. growth offset by flat international performance; hand tools led segment gains, while tool storage lagged due to customer caution on higher-ticket purchases. Three new products -- cold-forged needle nose pliers, compact frame ratchets, and a refreshed entry-level tool storage range -- achieved “million-dollar hit product” status, supporting the shift toward faster payback offerings prioritized by technicians.

"Hand tools was the leader. But hand tools, and that's why I spent so much time talking about hand tools, because the hand tools are great. Those pliers are great. The cold-forged pliers. Unbelievable. You know, the strength of those things. And Milwaukee is probably one of the only places in the world that can do that. So we really like that kind of thing. And I see it doesn't mean much to you if you're like us, you know, like me, anyway, who pushes a pencil all the time. But it's important to the techs, and they're they're liking some of the stuff we're bringing out. Now, diagnostics did pretty well. Don't get me wrong. The Triton was stupendous. But tool storage is down, you know, and stuff like that. Every quarter, there's a new story about the products. I think, generally, though, the big thing is the overall number. And I don't wanna pull off the call without reemphasizing what we think is the bellwether number. And that is 50.5% gross margin. Down only 10 basis points against 50 basis points of negative currency transaction. Think about that one for a minute. And you see that, boy, that just lays out what we did, what we're doing. We're doing okay. We're winning the battle at the point of sale."
— Nick Pinchuk, Chief Executive Officer

This deliberate pivot toward high-velocity, high-margin, U.S.-made hand tools and faster-payback SKUs aligns with prevailing customer sentiment, mitigating demand risk from discretionary, big-ticket categories.

Operational Agility Mitigates Tariff and Currency Headwinds

Gross margin was 50.5%, down just 10 basis points, despite the drag from 50 basis points of unfavorable currency transactions and continued trade policy volatility; Snap-on’s distributed manufacturing footprint -- 36 factories, 15 in the U.S. -- minimizes cross-border exposure and supply chain vulnerability. Management highlighted Snap-on’s ability to flex sourcing and cost structures rapidly in response to trade and currency volatility.

"You see, we said we believe we're resistant to tariffs. And we meant it. And we further believe that as we move forward, we have momentum as the shock recedes. And we have advantage rooted deeply in our products, continually matching the increases in complexity of work, making it much easier."
— Nick Pinchuk, Chief Executive Officer

Snap-on’s geographic diversification and rapid cost management provide material competitive advantages in volatile trade and currency environments, limiting gross profit erosion despite incremental tariffs and foreign exchange rate volatility.

Diagnostics and OEM-Driven RS&I Growth Strengthens Competitive Moat

In the repair systems and information (RS&I) group, sales advanced 2.3% organically, with double-digit percentage OEM dealership growth and high-single-digit gains in diagnostic and repair information products offsetting a high-single-digit undercar equipment decline. Operating margin improved 60 basis points to 25.6%. The recent Triton platform launch -- priced at $4,500 to $5,000 -- featured wireless connectivity, advanced zoom diagnostics, and superior battery/memory, fueling franchise and technician adoption rates above prior releases.

"The organic gain includes a double-digit increase in activity with OEM dealerships, and a high-single-digit gain in sales of diagnostics and repair information products to independent repair shop owners and managers. These gains more than offset a high-single-digit decline in sales of undercar equipment, including collision repair products."
— Aldo Pagliari, Chief Financial Officer

RS&I’s software-enabled diagnostic suite, alongside expanding OEM relationships, reinforces long-term value creation beyond traditional tools and hardware.

Looking Ahead

Management expects capital expenditures of approximately $100 million for fiscal 2025. Ongoing headwinds are anticipated from $6 million in quarterly nonservice pension costs (about $0.09 per share per quarter) for each quarter of the year. No explicit top-line or margin guidance was provided. The company reaffirmed its confidence that segment pivots, manufacturing localization, and innovation would allow it to navigate persistent industry and macroeconomic uncertainty.