Snap-on Incorporated (NYSE:SNA) Q2 2023 Earnings Call Transcript

David MacGregor: Yes. Last question for me because we’re getting at the top of the hour here. But what’s the trend in the total number of active stops across the Snap-on system in the U.S.?

Nicholas Pinchuk: Active stocks, meaning what?

David MacGregor: Stops. I mean a number of actual customer locations. I know you track that. So I’m just wondering what’s the trend there in terms of the total number of stops?

Nicholas Pinchuk: It’s — I don’t have that number right here, but my feeling is it’s moving upwards. But we don’t really count the stops so much as we count the technicians and the technicians are growing. So we’re getting more technicians.

David MacGregor: Great, thanks very much. Thanks for taking the questions.

Nicholas Pinchuk: Yes.

Operator: Our next question will come from Luke Junk with Baird. Please go ahead with your question.

Luke Junk: Good morning. Thank you for taking the questions. Nick, Aldo, good to talk. Nick, first question, I’m just wondering the capacity constraints you ran into the Tools Group this quarter, how that might play out in the near term versus the mix of business that you’d expect in the third quarter and what would typically be little bit of a seasonal decline sequentially. And if I listen to the cadence in terms of things coming online either end of this month or into the early part of the fourth quarter. It sounds like you think you’ll be in a better position in the fourth quarter overall from a supply chain standpoint. Am I hearing that right now?

Nicholas Pinchuk: Yes. We think that — we think the fourth as I’ve said, probably on every one of these calls in the second quarter, that the third quarter is always kind of squarely because you’ve got the franchisee conference, then you got vacations, which if franchisees take long vacations that can affect it a little bit or they take short vacations also can affect it. So you have that in place what the Snap-on franchisee conference occurs. Now we might be seeing some little bit of anticipation for that as we did in the power tools. Certainly, power tools is not going to be affected by capacity. I don’t think. So that’s not going to be. Those new launches shouldn’t be affected by capacity. And the capacity is coming online. And so we’ll see how efficacious that is. We tend to be pretty good in putting these things in place. So I think you’d be right that the fourth quarter would be — where we’d be hitting on more cylinders.

Luke Junk: And then for my follow-up, just hoping you could comment on the trends that you saw in C&I. You mentioned Europe briefly and Asia, you highlighted the weakness that you saw in Japan hoping you could just expand on Europe more broadly in Asia-Pacific, excluding?

Nicholas Pinchuk: Actually, the European business was up in RS&I and interestingly, the U.K. and the Tools Group came off of probably — it was flat on its back last year, I think. So it came back some. But the C&I business was kind of a little bit up and down in Europe. And so you — one of the things that was positive was critical industries. So the critical industry in C&I, boy, volumes and margins, new capacity in place smoke, but the other business is up and down, European hand tool based business in a number of different environments like the Nordics and so on, probably affected by concerns over the — over the war and so on. That is a little bit up and down and not very robust. And I don’t know where that’s going to tell you.