Tools, tool storage and automotive repair products maker Snap-on reported its 2020 fourth quarter and full-year financial results on Thursday, showing a considerable acceleration in sales growth both year-over-year and sequentially, while operating profit and net profit also had sizable improvements.
The Kenosha, WI-based company reported Q4 total sales of $1.074 billion, up 12.5 percent year-over-year (YoY) and up 14.1 percent from Q3. Organic sales were up 10.6 percent YoY in Q4, compared to a 3.8 percent gain in Q3.
The company's Q4 operating profit of $216 million (20.1 percent of sales) surged past the $171 million (17.9 percent of sales) it had a year earlier and improved 16.1 percent from Q3, while total Q4 net profit of $209 million was up 22.5 percent YoY and up 16.1 percent from Q3.
By Snap-on business segment in Q3:
- Commercial & Industrial sales of $364 million increased 3.3 percent YoY, with organic sales down 0.7 percent. That compares with Q3 sales that were down 8.0 percent YoY and down 8.6 percent organically. This decrease includes lower activity with customers in the critical industries and in the segment’s Asia Pacific operations, partially offset by higher volumes in the segment’s European-based hand tools business. Q4 operating profit $56 million was up from $45 million of a year earlier and $43 million in Q3.
- Snap-on Tools Group sales of $495 million increased 20.2 percent YoY, with organic sales up 19.6 percent. That compares with Q3 sales that were up 16.8 percent YoY and up 16.2 percent organically. The organic increase reflects higher activity in both the segment’s US and international operations. Operating profit of $93.6 million more than doubled $39.3 million of a year earlier and was up from $87 million in Q3.
- Repair Systems & Information Group sales of $361 million increased 7.8 percent YoY, with organic sales up 7.0 percent. That compares with Q3 sales that were down 1.6 percent YoY and down 2.2 percent organically. The organic gain includes higher activity with OEM dealerships and increased sales of diagnostics and repair information products to independent repair shop owners and managers, partially offset by lower volumes of undercar equipment. Operating profit of $90 million improved from $87 million of a year earlier and $80 million in Q3.
“Our fourth quarter was another encouraging period in which Snap-on continued its upward trajectory, extending to new heights in both sales and earnings ... achieved directly against a disruption of historic proportion ... all while prioritizing the health and safety of our constituents,” said Nick Pinchuk, Snap-on chairman and CEO. “
For the full year, Snap-on's total 2020 sales of $3.59 billion were down 3.7 percent from 2019, with organic sales down 3.8 percent. Operating profit of $881 million was down 8.5 percent and total profit of $627 million was down 9.6 percent.