Snap-On Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Scott Stember - ROTH MKM - Analyst : Good morning. Thanks for taking my questions.

Question: Scott Stember - ROTH MKM - Analyst : Nick, you were talking about -- obviously, it sounds like the shops are still relatively strong, but the confidence for the technicians is falling even further than before. So what's the game plan here? Do we see opportunities to further pivot to lower price items or is there something else that needs to be done?

Question: Scott Stember - ROTH MKM - Analyst : Got it. And then if you're looking at RS&I and C&I, RS&I in particular, if you were to back out the intercompany declines, which I assume had a pretty big impact there, what would the organic rates -- sales rates in RS&I had been?

Question: Scott Stember - ROTH MKM - Analyst : Got it. And then last question before I go back in the queue. It sounds like the military had a pretty profound impact on critical industries. Was that having anything to do with these Dodge movements? Or is there something that we should expect to see in the quarters ahead --

Question: Scott Stember - ROTH MKM - Analyst : Got you.

Question: Scott Stember - ROTH MKM - Analyst : Awesome. Thank you so much.

Question: David MacGregor - Longbow Research - Analyst : Good morning, everybody. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: David MacGregor - Longbow Research - Analyst : Good morning, Nick. I want to start off by just asking about truck level sales comps. What do you think those look like this quarter in the US?

Question: David MacGregor - Longbow Research - Analyst : Yeah. The sales comps off the van?

Question: David MacGregor - Longbow Research - Analyst : But you didn't see any destocking at the truck level?

Question: David MacGregor - Longbow Research - Analyst : And then you talked about negative mix in the Tools segment. I'm just trying to reconcile that with the narrative big ticket.

Question: David MacGregor - Longbow Research - Analyst : Right. So what would the hand tools have look like, Nick, just to isolate that category?

Question: David MacGregor - Longbow Research - Analyst : Great. Okay. How do you respond promotionally to the weaker demand?

Question: David MacGregor - Longbow Research - Analyst : And Nick, can you talk about the regional kickoff -- can you talk about the regional kickoffs and just were orders up or down this year and by how much?

Question: David MacGregor - Longbow Research - Analyst : Right. Last question for me is just on manufacturing capacity. And you've obviously done a lot there recently, but I'm also guessing that backlogs are directionally lower now as a consequence of this demand situation. Can you say about how much your backlogs are down? And in what product categories you may be seeing the greatest backlog depletion? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: David MacGregor - Longbow Research - Analyst : Got it. Thanks very much.

Question: Gary Prestopino - Barrington Research - Analyst : Good morning, everyone.

Question: Gary Prestopino - Barrington Research - Analyst : Nick, you mentioned in your opening comments about the fact that hours worked were down, like technicians as well in the quarter. I mean vehicle repair is generally kind of mission-critical. So could we assume that, that was less elective maintenance kind of services or would you --

Question: Gary Prestopino - Barrington Research - Analyst : Right. All right. Thank you. And just lastly, could you maybe comment on -- you made a lot of reference to the fact that this whole issue with tariffs coming up could have impacted technician confidence. As you went through your quarter, did things really accelerate on the downside starting in March, one could take away from what you were saying that a lot of the impact in the Tools Group, in particular, was due to these -- the uncertainty regarding tariffs and that kind of cropped up in March. So maybe give us a guide?

Question: Gary Prestopino - Barrington Research - Analyst : Okay. Thank you.

Question: Sherif El-Sabbahy - BofA Global Research - Analyst : Good morning.

Question: Sherif El-Sabbahy - BofA Global Research - Analyst : Just within the Tools Group, are you able to give us a sense of how the demand drop looked throughout the quarter, maybe a bit of cadence if there's (multiple speaker)

Question: Sherif El-Sabbahy - BofA Global Research - Analyst : Understood. And we've talked about this dynamic of a shift to quicker payback items for quite a while. Have you seen any shift in the quarter just with regards to the volume. Is that purely just a harder shift towards this trend? Or are you seeing lower demand for even some of the quicker payback items as well?

Question: Sherif El-Sabbahy - BofA Global Research - Analyst : Understood. Thank you for calling.

Question: Luke Junk - Robert W. Baird & Co - Analyst : Good morning, thanks for taking question. Nick, I wanted to start in terms of how you can play offense in this environment? And maybe just a finer point thinking mostly about the Tools Group in terms of marketing kind of the balance of engaging franchisees versus engaging with technicians directly. And in terms of investments, the steady pace of investment, just where we might see you look incrementally in terms of allocating dollars this year?

Question: Luke Junk - Robert W. Baird & Co - Analyst : Got it. You've talked a lot about the tech condition side in terms of sentiment and just how they're reacting to the environment, what about franchisees and the folks that you're spending time on? I guess I'm thinking especially things like cushion and how they might be thinking about working capital and their businesses, be it inventory, their payables, extended credit, those sorts of things? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Luke Junk - Robert W. Baird & Co - Analyst : Got it. Thanks. I appreciate the comment.

Question: Patrick Buckley - Jefferies - Analyst : Hey, good morning, guys. Could you talk a little bit more about recent dealer sentiment, I guess, Liberation Day and the auto tariffs are more of a Q2 event. So anything notable to call there to start the quarter?

Question: Patrick Buckley - Jefferies - Analyst : Yeah, and just demand for higher --

Question: Patrick Buckley - Jefferies - Analyst : No, the auto dealers.

Question: Patrick Buckley - Jefferies - Analyst : Yeah, exactly.

Question: Patrick Buckley - Jefferies - Analyst : Got it. Helpful. And then I guess looking at the Tools Group, it seems like international segment was a bit higher than US. Could you talk about maybe some of the drivers there and the outlook for the international segment there?

Question: Patrick Buckley - Jefferies - Analyst : Great. That's all from us. Thanks guys.