What does gross margin mean?

How much of every sales dollar is left after the direct cost of what was sold.

How do you interpret gross margin?

Higher and stable gross margins indicate pricing power and a durable cost structure. A declining trend signals input-cost pressure, pricing competition, or a shift toward lower-margin products.

How does gross margin compare across companies?

Highly comparable within an industry, less so across industries — software runs 70%+ while distributors run in single digits. Track the trend more than the absolute level across sectors.

Snap-on SNA Gross margin

Discontinued — last reported Q2 '18

Gross margin at other companies

Lowe's CompaniesLOW

32.7%-0.7pp

Sherwin-WilliamsSHW

49.1%+0.9pp

GameStopGME

$340.3M+34.6%

Natera, Inc.NTRA

0.8%—

Natera, Inc.NTRA

64.7%+1.6pp

Deckers Outdoor CorporationDECK

57.7%-0.2pp

Other financials

Income statement

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Revenue$1.3B+5.2%

Operating income$318.8M+1.7%

Net income$247.0M+2.7%

EPS (diluted)$4.69+4.0%

Balance sheet

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Cash & equivalents$1.8B+22.2%

Total debt$1.3B0.0%

Total equity$6.0B+7.9%

Total assets$8.5B+5.5%

Cash flow

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Operating cash flow$368.7M+23.5%

CapEx$21.2M-7.4%

Free cash flow$347.5M+26.1%

Valuation

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Market cap$20.06B+22.2%

Enterprise value$19.59B+20.5%

P/E19.6×+3.5×

P/S3.8×+0.6×

Profitability

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Operating margin25.5%-0.5pp

Net margin19.6%-0.5pp

Returns & leverage

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Return on equity17.8%-1.3pp

Debt / equity0.2×0.0×

Current ratio3.5×-0.6×

Where this comes from

Calculated from Snap-on’s reported figures.

gross profit/total revenue=52.8%

Based on trailing twelve months.

The official record: Snap-on’s 10-Q, filed July 18, 2019, on SEC EDGAR. View the filing →

Questions, answered.

What does gross margin mean?: How much of every sales dollar is left after the direct cost of what was sold.
How do you interpret gross margin?: Higher and stable gross margins indicate pricing power and a durable cost structure. A declining trend signals input-cost pressure, pricing competition, or a shift toward lower-margin products.
How does gross margin compare across companies?: Highly comparable within an industry, less so across industries — software runs 70%+ while distributors run in single digits. Track the trend more than the absolute level across sectors.