SNA Q3 Deep Dive: Diagnostics and Repair Systems Lead Amid Macro Uncertainty

Professional tools and equipment manufacturer Snap-on (NYSE:SNA) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 3.6% year on year to $1.29 billion. Its non-GAAP profit of $4.71 per share was 1.2% above analysts’ consensus estimates.

Is now the time to buy SNA? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Snap-on delivered third-quarter results that surpassed Wall Street’s expectations, leading to a positive market reaction. Management attributed the performance to robust demand in its repair systems and information segment, which benefited from increased activity with both OEM dealerships and independent repair shops. CEO Nick Pinchuk highlighted ongoing momentum, citing the company’s ability to adapt to challenging macro conditions through its diversified manufacturing base and a strategic focus on products with quicker payback periods. The tools group saw sequential growth, supported by innovative product launches and a pivot toward items aligned with evolving customer needs.

Looking ahead, Snap-on’s outlook centers on continued investment in product development and expanding its diagnostics and repair information platforms. Management believes rising vehicle complexity and an aging car fleet will sustain demand for advanced repair solutions. However, they acknowledged persistent uncertainty among customers due to factors like tariffs and global economic volatility. Pinchuk stated, "We proceed with confidence because we believe our markets will remain robust," emphasizing the company’s flexibility in responding to supply chain disruptions and shifting industry trends.

Key Insights from Management’s Remarks

Management credited the strong quarter to growth in diagnostics, share gains with OEM dealerships, and the company’s ability to pivot quickly amid a volatile environment.

• Diagnostics and repair systems growth: The repair systems and information segment reported high single-digit organic growth, driven by strong demand from independent repair shops and double-digit increases in sales to OEM dealerships. Management highlighted the success of new diagnostic tools and software, such as the Triton handheld platform, which integrates data-driven diagnostics to address modern vehicle complexity.
• Tools group product innovation: Sequential sales growth in the tools group was attributed to the launch of new products like the TAC two torque wrench and a next-generation cordless ratchet. These items, designed for faster payback and increased utility, resonated with technicians seeking solutions for more complex repairs. Franchisee engagement at the annual conference drove mid-single-digit order growth for new offerings.
• Critical industries show resilience: While the Asia Pacific segment faced headwinds due to supply chain shifts and trade policy uncertainties, Snap-on saw order growth in critical industries such as aviation, heavy-duty equipment, and natural resources. Customized kits and specialty torque products met customer needs in sectors less impacted by global trade disruptions.
• Product mix and margin dynamics: Despite modest organic growth in tools, the group maintained strong margins, supported by higher volumes in diagnostics and promotional discipline. Management noted that while hand tools and tool storage underperformed, the performance of diagnostics and select power tools offset these declines.
• Tariff and macro environment navigation: Snap-on’s strategy of manufacturing in end markets and redirecting production as needed helped mitigate tariff-related cost pressures. Management emphasized that while broader economic uncertainty and tariffs weighed on customer sentiment, the company’s operational flexibility and product breadth positioned it to navigate these challenges effectively.

Drivers of Future Performance

Snap-on’s outlook for the coming quarters is shaped by sustained demand for advanced repair solutions, ongoing product innovation, and continued macroeconomic uncertainty.

• Vehicle complexity and fleet age: Management expects that increasing vehicle complexity and the aging car fleet will drive ongoing demand for both diagnostic platforms and specialized repair tools. As more models require intricate repairs, Snap-on anticipates that its expanded suite of data-enabled products will be central to customer workflows.
• Customer sentiment and spending caution: Persistent uncertainty among technicians, especially around large capital purchases, remains a headwind. The company is focusing on faster-payback items and flexible financing to address reluctance toward big-ticket expenditures, particularly as tariffs and broader economic concerns influence purchasing behavior.
• Operational flexibility and supply chain adaptation: Snap-on’s strategy of manufacturing close to end markets and maintaining a diverse supplier base is expected to buffer the impact of trade policy shifts and potential supply disruptions. Management indicated that this flexibility will be crucial in sustaining profitability and supporting new product rollouts in a dynamic global environment.

Catalysts in Upcoming Quarters

Over the coming quarters, the StockStory team will be watching (1) the pace of adoption and sales realization from newly launched diagnostics and repair platforms, (2) whether Snap-on’s pivot to faster-payback products continues to offset technician caution toward large-ticket items, and (3) the resilience of order growth in critical industries like aviation and heavy-duty equipment. Execution on manufacturing flexibility and effective navigation of tariffs will also be important indicators.

Snap-on currently trades at $344.17, up from $332.62 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).

High Quality Stocks for All Market Conditions

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.