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Snap-on's (SNA) Strategies & Business Model Aid: Apt to Retain?
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Snap-on Incorporated (SNA - Free Report) is in good shape, thanks to its solid business strategies. The company’s growth strategies have been progressing well. It is focused on enhancing the franchise network, improving relationships with repair shop owners and managers, and expanding into critical industries in emerging markets. The Rapid Continuous Improvement (“RCI”) process is on track.
Let’s Explore More
The RCI process is aimed at enhancing organizational effectiveness, reducing costs, and boosting sales and margins. Savings from this initiative come from continuous productivity and process-improvement plans. The company is dedicated to various strategic principles and processes aimed at creating values.
Management intends to boost customer services, along with enhancing manufacturing and supply-chain capabilities, through the RCI initiative and further investments. Snap-on’s ability to innovate bodes well too. The company has been investing in bringing new products and increasing brand awareness across the world. Additionally, SNA’s robust business model helps enhance value-creation processes, which in turn improves safety, quality of service, customer satisfaction and innovation.
As a result, Snap-on’s business trends remain robust as evident from the strong performance across its few operating segments. In the first quarter of 2024, sales in Repair Systems & Information Group advanced 3.9% year over year, with organic sales growth of 3.3%. Sales also gained from a $2.5-million positive impact of currency. Higher activity with OEM dealerships and a rise in sales of under-car equipment contributed to the segment’s organic sales growth. Further, the Financial Services business’ revenues rose 7.6% year over year to $99.6 million.
Despite these positives, Snap-on has been battling tough macroeconomic issues, including inflationary pressures and other headwinds. Some of the trends that have been affecting the company are external factors that create disruptions in Europe. Rising cost inflation, stemming from higher raw material expenses and other costs, is another headwind that is hurting SNA’s performance. In the first quarter, sales in the Commercial & Industrial Group dipped 1.1% from the year-ago quarter on an organic sales drop of 2.5%, while the metric in the Tools Group segment declined 6.9% year over year, led by an organic sales decline of 7%.
Bottom Line
Management expects continued progress by leveraging capabilities in the automotive repair arena, as well as expanding its customer base in automotive repair and across geographies, including critical industries. The company believes that its markets and operations have considerable resilience against the uncertainties of the environment. As a result, Snap-on anticipates progress along its defined runways for growth.
Analysts seem optimistic about the company. The Zacks Consensus Estimate for 2024 sales and earnings per share (EPS) is currently pegged at $4.85 billion and $19.21, respectively, indicating growth of 2.4% each.
Buoyed by such catalysts, shares of this Zacks Rank #3 (Hold) company have gained 5.4% against the industry’s 0.7% decline in the past year.
G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands. It sports a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
GIII Apparel has a trailing four-quarter earnings surprise of 571.8%, on average. The Zacks Consensus Estimate for GIII Apparel’s current financial-year sales indicates growth of 3.4% from the year-ago figure.
Crocs develops and manufactures lifestyle footwear and accessories. It currently has a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 17.1%, on average.
The Zacks Consensus Estimate for Crocs’ current financial-year sales and EPS implies an improvement of 4.3% and 5.6%, respectively, from the prior-year actuals.
Royal Caribbean carries a Zacks Rank of 2, at present. RCL has a trailing four-quarter earnings surprise of 18.3%, on average.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates an increase of 16.8% and 63.8%, respectively, from the year-ago reported levels.
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Snap-on's (SNA) Strategies & Business Model Aid: Apt to Retain?
Snap-on Incorporated (SNA - Free Report) is in good shape, thanks to its solid business strategies. The company’s growth strategies have been progressing well. It is focused on enhancing the franchise network, improving relationships with repair shop owners and managers, and expanding into critical industries in emerging markets. The Rapid Continuous Improvement (“RCI”) process is on track.
Let’s Explore More
The RCI process is aimed at enhancing organizational effectiveness, reducing costs, and boosting sales and margins. Savings from this initiative come from continuous productivity and process-improvement plans. The company is dedicated to various strategic principles and processes aimed at creating values.
Management intends to boost customer services, along with enhancing manufacturing and supply-chain capabilities, through the RCI initiative and further investments. Snap-on’s ability to innovate bodes well too. The company has been investing in bringing new products and increasing brand awareness across the world. Additionally, SNA’s robust business model helps enhance value-creation processes, which in turn improves safety, quality of service, customer satisfaction and innovation.
Snap-On Incorporated Price and Consensus
Snap-On Incorporated price-consensus-chart | Snap-On Incorporated Quote
As a result, Snap-on’s business trends remain robust as evident from the strong performance across its few operating segments. In the first quarter of 2024, sales in Repair Systems & Information Group advanced 3.9% year over year, with organic sales growth of 3.3%. Sales also gained from a $2.5-million positive impact of currency. Higher activity with OEM dealerships and a rise in sales of under-car equipment contributed to the segment’s organic sales growth. Further, the Financial Services business’ revenues rose 7.6% year over year to $99.6 million.
Despite these positives, Snap-on has been battling tough macroeconomic issues, including inflationary pressures and other headwinds. Some of the trends that have been affecting the company are external factors that create disruptions in Europe. Rising cost inflation, stemming from higher raw material expenses and other costs, is another headwind that is hurting SNA’s performance. In the first quarter, sales in the Commercial & Industrial Group dipped 1.1% from the year-ago quarter on an organic sales drop of 2.5%, while the metric in the Tools Group segment declined 6.9% year over year, led by an organic sales decline of 7%.
Bottom Line
Management expects continued progress by leveraging capabilities in the automotive repair arena, as well as expanding its customer base in automotive repair and across geographies, including critical industries. The company believes that its markets and operations have considerable resilience against the uncertainties of the environment. As a result, Snap-on anticipates progress along its defined runways for growth.
Analysts seem optimistic about the company. The Zacks Consensus Estimate for 2024 sales and earnings per share (EPS) is currently pegged at $4.85 billion and $19.21, respectively, indicating growth of 2.4% each.
Buoyed by such catalysts, shares of this Zacks Rank #3 (Hold) company have gained 5.4% against the industry’s 0.7% decline in the past year.
Key Picks
We have highlighted three better-ranked stocks, namely, G-III Apparel Group (GIII - Free Report) , Crocs (CROX - Free Report) and Royal Caribbean (RCL - Free Report) .
G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands. It sports a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
GIII Apparel has a trailing four-quarter earnings surprise of 571.8%, on average. The Zacks Consensus Estimate for GIII Apparel’s current financial-year sales indicates growth of 3.4% from the year-ago figure.
Crocs develops and manufactures lifestyle footwear and accessories. It currently has a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 17.1%, on average.
The Zacks Consensus Estimate for Crocs’ current financial-year sales and EPS implies an improvement of 4.3% and 5.6%, respectively, from the prior-year actuals.
Royal Caribbean carries a Zacks Rank of 2, at present. RCL has a trailing four-quarter earnings surprise of 18.3%, on average.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates an increase of 16.8% and 63.8%, respectively, from the year-ago reported levels.