Snap-on Incorporated (NYSE:SNA) reported mixed first-quarter 2026 results on Thursday, with earnings missing expectations while revenue came in ahead of estimates. Shares were trading higher following the release.

Snap-on reported diluted EPS of $4.69, missing the analyst estimates of $4.77. Net earnings increased to $247.0 million from $240.5 million a year earlier.

Revenue and Margins

Net sales rose 5.8% year over year to $1.207 billion, beating estimates of $1.185 billion. Growth was driven by 3.4% organic gains and favorable currency.

Gross margin was 50.4%, down from 50.7%, including 40 basis points of unfavorable currency effects.

Operating earnings before financial services increased to $250.8 million from $243.1 million, though margin declined to 20.8% from 21.3%.

Consolidated operating earnings rose to $318.8 million from $313.4 million, with a margin at 24.4% versus 25.2% last year.

"Our first quarter was encouraging, led by robust sales growth with customers in critical industries and improved activity in the U.S. Tools Group, both demonstrating our considerable momentum despite the ongoing and ever-evolving turbulence," said Nick Pinchuk, Snap-on chairman and chief executive officer.

Segment Performance

Operating expenses ratio for the first quarter was 29.6% compared to 29.4% in 2025, primarily due to increased personnel costs and expanded technology investments, partially offset by the favorable effects of sales volume.

Commercial & Industrial Group sales rose to $381.60 million from $343.9 million, with an operating margin at 14.4%. Snap-on Tools Group sales increased to $486.0 million from $462.9 million, with margin improving to 21.6%.

Repair Systems & Information Group sales rose to $485.3 million from $475.9 million, while operating margin declined to 24.6%.

Cash Flow and Outlook

Cash provided by operating activities increased to $368.7 million from $298.5 million.

The company held Cash and cash equivalents totaling $1.75 billion, while total debt was about $1.2 billion.

Snap-on expects continued progress in 2026, with capital expenditures of about $100 million and a full-year effective tax rate of 22% to 23%, while citing uncertainty around technicians, supply chain disruptions, and global conflicts.

Conference Call Highlights

Snap-on said its first-quarter sales marked its highest-ever first-quarter performance and second-highest quarterly sales overall. Strength in the vehicle repair market supported the results.

The average vehicle age reached 12.8 years, with growth in repair spending, technician hours, and wages supporting demand.

Tool storage and accessories improved, while power tools grew on new product launches. Diagnostics was weaker, while critical industries posted high-single-digit growth led by aviation, heavy-duty, and natural resources, with military activity flat but improving sequentially.

The company highlighted continued investment in technology and proprietary databases, including expanded use of large language models. In Repair Systems & Information, gains in independent repair channels were partly offset by weaker OEM activity.

Snap-on returned $126.8 million in dividends and repurchased $99.9 million of stock, with $234.1 million remaining under authorization.

It expects corporate expenses of about $28 million per quarter in 2026 and noted prior-year results included a one-time 31-cent EPS benefit from a legal settlement.

SNA Price Action: Snap-on shares were up 1.54% at $388.28 at the time of publication on Thursday. The stock is trading near its 52-week high of $390.13, according to Benzinga Pro data.

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