Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $3.9 billion, down 2% year-over-year and down 3% organically [11][12] - Adjusted gross margin rate for Q2 was 27.5%, a decrease due to tariffs and lower volume, partially offset by supply chain efficiencies [13][14] - Adjusted EBITDA margin was 8.1%, down 260 basis points year-over-year [14] - Adjusted earnings per share was $1.08, including a discrete tax benefit [14] - Free cash flow for Q2 was $135 million, reflecting strong operational performance despite trade policy impacts [15] Business Segment Performance - Tools and Outdoor segment revenue was approximately $3.5 billion, representing a 2% decline, with organic revenue down 3% [18][19] - DEWALT brand continued to show growth, with professional demand remaining resilient [19] - Engineered Fastening segment revenue was down 2% year-over-year, with a 1% organic decline [23] - Aerospace business achieved over 20% organic growth, reaching an annualized run rate of $400 million [24] Market Data and Key Metrics Changes - North America organic revenue declined by 4%, while Europe saw a 1% decline [21][22] - The rest of the world delivered 1% organic growth, driven by strong performance in Latin America and the Middle East [22] - Outdoor organic revenue declined 7% due to a slow buying season, but demand improved in July [21] Company Strategy and Industry Competition - The company is focused on a multi-year supply chain transformation aimed at improving cost structure and operational efficiency [9][26] - Plans to achieve $2 billion in pretax run rate cost savings, with $1.5 billion attributed to supply chain improvements [26][27] - The company aims for a long-term adjusted gross margin of 35% or higher, with initiatives to mitigate tariff impacts [31][39] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging operating environment due to tariffs and a slow outdoor buying season, but expressed confidence in the company's foundation for future growth [10][11] - The company anticipates organic revenue to remain relatively flat in the second half of 2025 [12][37] - Management is committed to maintaining a strong balance sheet and achieving deleveraging goals by 2026 [41][42] Other Important Information - Leadership transition is underway, with Chris Nelson set to become CEO on October 1, 2025 [6][17] - The company is actively engaging with the U.S. administration regarding trade policies [32] Q&A Session Summary Question: Gross margin outlook for Q4 - Management expects gross margin expansion in Q3 and Q4, with Q4 potentially reaching 33% to 34% [50][51] Question: 2Q upside and full year guidance - The Q2 beat was primarily due to operational factors and tax timing, with tariff expense timing affecting the outlook [58][60] Question: Pricing increases tracking - Price increases have been realized as expected, with a one-for-one offset between price and volume [66][67] Question: Tariff impacts and USMCA compliance - Current estimates for annualized gross tariff costs are around $800 million, with ongoing efforts to mitigate these costs [34][75] Question: Customer buying patterns and inventory levels - Inventory levels are healthy and in line with historical norms, with no significant destocking expected [79][80] Question: Outdoor segment performance - The outdoor segment experienced a later start to the season but is seeing improved POS activity [84] Question: Craftsman brand performance - The Craftsman brand is performing in line with market trends, with opportunities for growth in the power tool space [90]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $3.9 billion, down 2% year-over-year and down 3% organically [10][11] - Adjusted gross margin rate for Q2 was 27.5%, a decrease from the previous year due to tariffs and lower volume [12] - Adjusted EBITDA margin was 8.1%, down 260 basis points compared to the prior year [13] - Adjusted earnings per share was $1.08, including a discrete tax benefit [13] - Free cash flow for Q2 was $135 million, reflecting strong operational performance despite trade policy impacts [14] Business Line Data and Key Metrics Changes - Tools and Outdoor segment revenue was approximately $3.5 billion, representing a 2% decline year-over-year, with organic revenue down 3% [17] - Power Tools organic revenue grew by 1%, while Hand Tools organic revenue declined by 5% due to tariff-related disruptions [19] - Outdoor organic revenue declined by 7% due to a slow buying season, but demand improved in July [20] - Engineered Fastening segment revenue was down 2% year-over-year, with a 1% organic decline [22] Market Data and Key Metrics Changes - In North America, organic revenue declined by 4%, consistent with the overall segment performance [20] - Europe saw a 1% organic revenue decline, with growth in the UK offsetting weaker demand in Germany and Italy [21] - The rest of the world delivered 1% organic growth, driven by strong performance in Latin America and the Middle East [21] Company Strategy and Development Direction - The company is focused on a multi-year supply chain transformation aimed at improving cost structure and operational efficiency [8][24] - A target of achieving an adjusted gross margin of 35% or higher is set, with ongoing initiatives to mitigate tariff impacts [30][39] - The company plans to invest over $100 million in 2025 to drive market activation and brand strengthening [38] Management's Comments on Operating Environment and Future Outlook - Management noted a slow outdoor buying season and shipment disruptions due to tariffs, impacting Q2 performance [11][12] - The company expects organic revenue to remain relatively flat in the second half of 2025 [12] - Management expressed confidence in the company's foundation for future growth and the effectiveness of their supply chain transformation [9][10] Other Important Information - The company has divested $2.6 billion in revenue to streamline its portfolio and focus on core strengths [8] - A robust cost savings initiative is expected to deliver approximately $2 billion in pretax run rate savings [24][25] Q&A Session Summary Question: Gross margin outlook for Q4 - Management expects gross margin expansion in Q3 and Q4, with Q4 potentially reaching 33% to 34% [49][50] Question: 2Q upside and full year guidance - The Q2 beat was primarily due to operational factors and tax timing, with tariff expense timing affecting the outlook [58][60] Question: Pricing actions and acceptance - The first round of price increases has been implemented successfully, with a second, more modest increase planned for Q4 [65][66] Question: Customer buying patterns and inventory levels - Inventory levels are healthy and in line with historical norms, with no significant destocking expected [78] Question: Outdoor segment performance - The outdoor segment experienced a later start to the season but is seeing improved POS activity [82] Question: Craftsman brand performance - The Craftsman brand is performing in line with market trends, with opportunities for growth in the power tool space [88]

Company Performance - Stanley Black & Decker reported quarterly earnings of $1.08 per share, exceeding the Zacks Consensus Estimate of $0.38 per share, and compared to earnings of $1.09 per share a year ago, representing an earnings surprise of +184.21% [1] - The company posted revenues of $3.95 billion for the quarter ended June 2025, missing the Zacks Consensus Estimate by 1.12%, and down from $4.02 billion year-over-year [2] - Over the last four quarters, Stanley Black & Decker has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Stock Performance - Stanley Black & Decker shares have declined approximately 7.9% since the beginning of the year, while the S&P 500 has gained 8.6% [3] - The current status of estimate revisions translates into a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $1.85 on revenues of $3.9 billion, and for the current fiscal year, it is $4.49 on revenues of $15.53 billion [7] - The outlook for the industry, specifically the Manufacturing - Tools & Related Products sector, is currently in the top 20% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8]

Financial Performance - The company reported total revenue of $3.9 billion, a 2% decrease compared to the prior year, attributed to a slow outdoor buying season and tariff-related shipment disruptions[6, 7] - Adjusted gross margin was 27.5%, down from the prior year, impacted by a 3-point gross impact from tariffs and lower volume, partially offset by supply chain efficiencies and price increases[6, 7] - Adjusted EPS was $1.08, inclusive of a tax rate benefit[6, 7] - Net cash from operating activities was $214 million, and free cash flow was $135 million[7] Segment Performance - Tools & Outdoor segment revenue decreased by 2% to $3.461 billion, with an adjusted segment margin of 8.0%, down year-over-year due to tariffs, lower volume, and growth investments[9] - Engineered Fastening segment revenue decreased by 2% to $484 million, with an adjusted segment margin of 10.8%, down year-over-year due to lower volume in higher margin automotive[10] Transformation and Cost Savings - The company's transformation program has achieved $150 million in quarter-to-date pre-tax run-rate cost savings and $1.8 billion program-to-date[6, 12] - The company is targeting completion of the transformation in 2025, focusing on material productivity, operational excellence, complexity reduction, and footprint rationalization[12] Tariffs and Mitigation - The company estimates an annualized gross impact of $800 million from tariffs, with a net impact of $0.65 EPS for fiscal year 2025[16] - Mitigation strategies include price increases, supply chain adjustments, and engagement with the U.S administration[15, 17] 2025 Planning Assumptions - The company's base planning scenario for 2025 includes GAAP EPS of $3.45 (+/- $0.10) and adjusted EPS of approximately $4.65[7] - The company is targeting free cash flow to approximate $600 million in 2025[7, 18]

Financial Statements [Condensed Consolidated Statements of Operations](index=1&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) In the second quarter of 2025, Stanley Black & Decker reported net sales of $3.95 billion, a slight decrease from $4.02 billion in the prior year's quarter. The company achieved a significant turnaround in profitability, with net earnings from continuing operations reaching $101.9 million, compared to a net loss of $19.2 million in Q2 2024. This improvement is also reflected in the year-to-date results, where net earnings from continuing operations rose to $192.3 million from just $0.3 million in the previous year Key Financial Metrics | Financial Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $3,945.2M | $4,024.4M | $7,689.8M | $7,893.9M | | **Gross Profit** | $1,066.5M | $1,141.2M | $2,187.3M | $2,249.7M | | **Gross Margin** | 27.0% | 28.4% | 28.4% | 28.5% | | **Income from Operations** | $106.9M | $56.3M | $311.7M | $192.5M | | **Net Earnings (Loss) from Continuing Operations** | $101.9M | $(19.2)M | $192.3M | $0.3M | | **Diluted EPS from Continuing Operations** | $0.67 | $(0.13) | $1.27 | $0.00 | [Condensed Consolidated Balance Sheets](index=2&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 28, 2025, the company's total assets stood at $22.49 billion, a slight increase from $21.85 billion at the end of 2024. The increase was driven by higher accounts receivable, while inventories remained relatively stable. On the liability side, total current liabilities grew significantly to $6.59 billion from $4.92 billion, mainly due to increases in short-term borrowings and current maturities of long-term debt. Long-term debt decreased from $5.60 billion to $4.76 billion Key Balance Sheet Items | Balance Sheet Item | June 28, 2025 | December 28, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $6,877.8M | $6,377.7M | | Inventories, net | $4,639.0M | $4,536.4M | | **Total Assets** | $22,492.6M | $21,848.9M | | **Total Current Liabilities** | $6,592.1M | $4,916.9M | | Long-term Debt | $4,757.8M | $5,602.6M | | **Total Shareowners' Equity** | $9,063.0M | $8,719.9M | [Summary of Cash Flow Activity](index=3&type=section&id=SUMMARY%20OF%20CASH%20FLOW%20ACTIVITY) For the first half of 2025, the company experienced a net cash outflow from operating activities of $205.7 million, a significant shift from a $142.0 million inflow in the same period of 2024, primarily due to unfavorable changes in working capital. Consequently, year-to-date free cash flow was negative at $350.3 million, compared to a negative $10.9 million in the prior year. The company paid $248.5 million in dividends year-to-date Key Cash Flow Metrics (Year-to-Date) | Cash Flow Metric (YTD) | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $(205.7)M | $142.0M | | Capital and software expenditures | $(144.6)M | $(152.9)M | | **Free cash flow (before dividends)** | $(350.3)M | $(10.9)M | | Cash dividends on common stock | $(248.5)M | $(243.6)M | - Free cash flow is defined as cash flow from operations less capital and software expenditures and is considered an important measure of liquidity and ability to fund growth and returns to shareholders[7](index=7&type=chunk) Segment Performance [Business Segment Information](index=4&type=section&id=BUSINESS%20SEGMENT%20INFORMATION) Both of the company's segments, Tools & Outdoor and Engineered Fastening, experienced year-over-year declines in net sales and segment profit for both the second quarter and year-to-date periods of 2025. The Tools & Outdoor segment's profit margin decreased to 6.9% in Q2 2025 from 9.0% in Q2 2024. The Engineered Fastening segment saw a more significant profit margin drop, from 13.5% to 7.2% in the same period. Notably, the Industrial segment was renamed to "Engineered Fastening" in Q1 2025 to reflect a more focused portfolio after recent divestitures Segment Performance Overview | Segment Performance (Q2 2025 vs Q2 2024) | Net Sales | Segment Profit | Profit Margin | | :--- | :--- | :--- | :--- | | **Tools & Outdoor** | $3,461.4M vs $3,528.7M | $238.1M vs $316.1M | 6.9% vs 9.0% | | **Engineered Fastening** | $483.8M vs $495.7M | $35.0M vs $66.8M | 7.2% vs 13.5% | - In the first quarter of 2025, the Industrial segment was renamed "Engineered Fastening" following recent divestitures. This was a name change only and did not impact financial statements or segment results[9](index=9&type=chunk) Non-GAAP Financial Measures and Reconciliations [Reconciliation of GAAP to Non-GAAP Earnings Measures](index=5&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Earnings%20Measures) The company provides Non-GAAP financial measures to aid in the analysis of business trends by excluding certain items. For Q2 2025, Non-GAAP diluted EPS from continuing operations was $1.08, substantially higher than the GAAP figure of $0.67. For the year-to-date period, Non-GAAP diluted EPS was $1.83 compared to GAAP EPS of $1.27. These adjustments primarily relate to supply chain transformation costs, a voluntary retirement program, and other charges EPS Reconciliation (Continuing Operations) | EPS Reconciliation (Continuing Operations) | Q2 2025 | YTD 2025 | | :--- | :--- | :--- | | **GAAP Diluted EPS** | $0.67 | $1.27 | | Non-GAAP Adjustments | $0.41 | $0.56 | | **Non-GAAP Diluted EPS** | $1.08 | $1.83 | [Reconciliation of GAAP to Non-GAAP Segment Profit](index=7&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Segment%20Profit) Non-GAAP adjustments significantly increased reported segment profits. In Q2 2025, the Tools & Outdoor segment's Non-GAAP profit was $276.5 million (8.0% margin) versus a GAAP profit of $238.1 million (6.9% margin). Similarly, Engineered Fastening's Non-GAAP profit was $52.3 million (10.8% margin) compared to a GAAP profit of $35.0 million (7.2% margin). Adjustments primarily stem from costs associated with a voluntary retirement program and supply chain transformation Segment Profit Reconciliation | Segment Profit Reconciliation (Q2 2025) | GAAP Profit | Non-GAAP Adjustments | Non-GAAP Profit | | :--- | :--- | :--- | :--- | | **Tools & Outdoor** | $238.1M | $38.4M | $276.5M | | **Engineered Fastening** | $35.0M | $17.3M | $52.3M | - Non-GAAP adjustments for business segments are mainly due to separation benefit costs from a voluntary retirement program, footprint actions, and other costs related to supply chain transformation[12](index=12&type=chunk)[14](index=14&type=chunk) [Reconciliation of GAAP Earnings to EBITDA](index=9&type=section&id=Reconciliation%20of%20GAAP%20Earnings%20to%20EBITDA) The company calculates EBITDA and Adjusted EBITDA to provide further insight into its operating performance. For Q2 2025, Adjusted EBITDA was $318.2 million (8.1% of net sales), a decrease from $429.3 million (10.7% of net sales) in Q2 2024. The year-to-date Adjusted EBITDA also declined to $680.0 million from $771.9 million in the prior year EBITDA Reconciliation | EBITDA Reconciliation | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **EBITDA** | $237.0M | $211.3M | $570.2M | $487.7M | | **Adjusted EBITDA** | $318.2M | $429.3M | $680.0M | $771.9M | | **Adjusted EBITDA Margin** | 8.1% | 10.7% | 8.8% | 9.8% | [Reconciliation of GAAP Revenue Growth to Organic Growth](index=10&type=section&id=Reconciliation%20of%20GAAP%20Revenue%20Growth%20to%20Organic%20Growth) To better illustrate underlying sales performance, the company provides organic growth figures, which exclude currency fluctuations, acquisitions, and divestitures. In Q2 2025, the company's reported GAAP revenue declined by 2%. After accounting for a 1% positive impact from currency, the organic revenue decline was 3%. The Tools & Outdoor segment saw a 3% organic decline, while the Engineered Fastening segment had a 1% organic decline Revenue Growth Reconciliation | Q2 2025 Growth Reconciliation | GAAP Revenue Growth | Currency Impact | Organic Growth | | :--- | :--- | :--- | :--- | | **Stanley Black & Decker** | -2% | 1% | -3% | | **Tools & Outdoor** | -2% | 1% | -3% | | **Engineered Fastening** | -2% | 2% | -1% | [Summary of Non-GAAP Adjustments](index=9&type=section&id=Summary%20of%20Non-GAAP%20Adjustments) In Q2 2025, pre-tax Non-GAAP adjustments totaled $83.0 million. The largest components were related to a voluntary retirement program implemented in June 2025, ongoing supply chain transformation costs (including footprint rationalization), and complexity reduction initiatives within the Engineered Fastening business. These adjustments were partially offset by a gain on the sale of a distribution center - Key pre-tax Non-GAAP adjustments in Q2 2025 included: - **Voluntary Retirement Program:** $51.6M in costs ($11.9M in Gross Profit, $33.5M in SG&A, $6.2M in Other, net) - **Supply Chain Transformation:** $13.7M in costs ($8.7M in Gross Profit, $5.0M in SG&A) - **Complexity Reduction & Operational Excellence:** $10.5M in costs (SG&A) - **Gain on Sale:** An $8.1 million gain on the sale of a distribution center was recorded in 'Other, net'[19](index=19&type=chunk)[21](index=21&type=chunk)

DEWALT Delivered Topline Growth Due to Relatively Resilient Professional Demand 2Q'25 Segment Results ($ in M) | Sales | | Segment | | Adjusted Segment | Segment | Adjusted | | --- | --- | --- | --- | --- | --- | --- | | | | | Charges1 | | | Segment | | | Profit | | | Profit* | Margin | Margin* | | Tools & | $3,461 $238.1 | | $38.4 | $276.5 | 6.9 % | 8.0 % | | Outdoor | | | | | | | | Engineered Fastening2 $484 $35.0 | | | $17.3 | $ 52.3 | 7.2 % | 10.8 % | Continued Cost Discipline and Price Measures Partial ...

Core Viewpoint - Stanley Black & Decker, Inc. is expected to report a decline in both revenues and adjusted earnings for the second quarter of 2025, with revenues projected at $3.99 billion, down 0.9% year-over-year, and adjusted earnings expected to fall 65.1% to 38 cents per share [1][9]. Revenue Performance - The consensus estimate for Stanley Black's second-quarter revenues is $3.99 billion, indicating a decline of 0.9% from the previous year [1][9]. - The Tools & Outdoor segment is anticipated to see a revenue increase of 1.6% year-over-year to $3.58 billion, driven by strong demand in the DEWALT business and other key brands [3][9]. - Conversely, the Industrial segment is expected to experience a revenue decline of 10.3% year-over-year to $444.9 million, impacted by softness in the automotive market and the divestiture of the infrastructure business [5][9]. Earnings Performance - The adjusted earnings consensus estimate is set at 38 cents per share, reflecting a significant decline of 65.1% from the same quarter last year [1][9]. - The company has a history of earnings surprises, having outperformed consensus estimates in the last four quarters with an average surprise of 18.4% [2]. Cost and Margin Analysis - Stanley Black's cost-reduction initiatives are expected to support its bottom line, with an anticipated EBITDA margin of 6%, representing a 70 basis points year-over-year expansion [4]. - Selling, general, and administrative (SG&A) expenses are projected to rise by 10.8% year-over-year to $887.3 million, which may pressure the company's overall profitability [6]. Foreign Exchange Impact - The company's operations are subject to foreign exchange headwinds, with a stronger U.S. dollar likely negatively affecting its overseas business [6].

Core Viewpoint - Stanley Black & Decker has announced a $0.01 increase in its quarterly cash dividend to $0.83 per share, reflecting the company's commitment to enhancing shareholder value and confidence in its long-term growth strategy [1][2]. Company Overview - Founded in 1843 and headquartered in the USA, Stanley Black & Decker is a global leader in Tools and Outdoor products, employing approximately 48,000 people and producing a wide range of innovative tools and solutions for builders, tradespeople, and DIY enthusiasts [2]. Dividend Details - The approved quarterly cash dividend of $0.83 per share will be payable on September 16, 2025, to shareholders of record as of September 2, 2025 [1].

Core Viewpoint - The market anticipates a year-over-year decline in earnings for Stanley Black & Decker due to lower revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The upcoming earnings report is expected to show earnings of $0.38 per share, reflecting a decline of 65.1% year-over-year, with revenues projected at $3.99 billion, down 0.9% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 3.5% higher in the last 30 days, indicating a collective reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Stanley Black & Decker is higher than the consensus estimate, resulting in an Earnings ESP of +18.80%, indicating a likely earnings beat [11]. Historical Performance - In the last reported quarter, Stanley Black & Decker exceeded the expected earnings of $0.68 per share by delivering $0.75, achieving a surprise of +10.29%. The company has beaten consensus EPS estimates in the last four quarters [12][13]. Investment Considerations - While the potential for an earnings beat exists, other factors may influence stock performance, making it essential to consider the broader context beyond just earnings results [14][16].

Ford was selected by a review committee based on her industry experience and track record of successfully impacting business growth, coupled with her personal and professional achievements. As a member of the Council, Ford will regularly connect with other respected executives to offer her thoughts and perspectives on a range of topics on Forbes.com. Ford has been a vocal advocate for the skilled trades, using her platform to inspire the next generation of workers. From delivering a keynote speech at NABTU' ...