The dustbuster® reveal™ line features up to 3x more suction power and up to 16 minutes of runtime1, helping cleaning enthusiasts bust more dust TOWSON, Md., Sept. 2, 2025 /PRNewswire/ -- BLACK+DECKER®, a Stanley Black & Decker brand (NYSE: SWK) setting the standard for cordless innovation and home product design, introduces its latest innovation in handheld vacuums, the dustbuster® reveal™ line – one of the brand's most anticipated launches that boasts an LED light to help cleaning enthusiasts easily remov ...

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Group 1 - The article discusses the performance of Stanley Black & Decker (NYSE: SWK), noting a 17% decline since a bullish article was published in February 2024, despite a peak price of around $105 in October 2024 [1] - The author emphasizes a long-term investment strategy focused on dividend and value stocks, which has garnered a near 5-star rating on Tipranks.com and over 9,000 followers on Seeking Alpha [1] - The author holds a beneficial long position in SWK shares through various means, indicating a personal investment in the company [1]

Core Viewpoint - Investors expressed significant concern regarding Stanley Black & Decker's recent performance, leading to a more than 7% decline in stock price following disappointing second-quarter results [1] Financial Performance - Stanley Black & Decker reported revenue of $3.9 billion for the quarter, a decrease of 2% year over year, attributed to a sluggish outdoor buying season and shipment disruptions due to tariffs [2] - Adjusted net income fell by almost 1% to slightly over $163 million, translating to $1.08 per share [2] - The consensus analyst estimate for revenue was $4 billion, while adjusted profitability was estimated at $0.41 per share [3] Management Response - Management indicated a commitment to overcoming current difficulties, with COO and incoming CEO Christopher Nelson stating that the company is executing a robust plan to mitigate tariff impacts and optimize its supply chain [4] - The company provided guidance for 2025, predicting adjusted net income of approximately $4.65 per share, although this forecast may be subject to adjustment due to an anticipated $800 million financial hit from tariffs [4][5]

Core Insights - Stanley Black & Decker, Inc. (SWK) reported second-quarter 2025 adjusted earnings of $1.08 per share, exceeding the Zacks Consensus Estimate of 38 cents, but down 0.9% year over year [1][7] - The company's net sales were $3.95 billion, missing the consensus estimate of $3.99 billion, reflecting a 2% decline year over year due to weakness in both segments [1][7] Segment Performance - The Tools & Outdoor segment generated revenues of $3.46 billion, a decrease of 1.9% year over year [2] - The renamed Engineered Fastening segment reported revenues of $483.8 million, down 2.4% year over year [2] Margin Analysis - Cost of sales decreased by 0.2% year over year to $2.88 billion, while gross profit fell 6.5% to $1.07 billion [3] - Gross margin declined by 140 basis points to 27% [3] - Selling, general and administrative expenses rose by 5.4% to $873.1 million, leading to an adjusted EBITDA of $318.2 million, down 25.9% year over year, with a margin decrease of 260 basis points to 8.1% [3][7] Balance Sheet and Cash Flow - At the end of the second quarter, cash and cash equivalents stood at $311.8 million, up from $290.5 million at the end of Q4 2024 [4] - Long-term debt decreased to $4.76 billion from $5.6 billion at the end of Q4 2024 [4] - In the first half of 2025, net cash used in operating activities was $205.7 million, compared to $142 million generated in the same period last year [5] - Capital and software expenditures totaled $144.6 million, down from $152.9 million year over year, with free cash flow before dividends at negative $350.3 million compared to $10.9 million a year ago [5] 2025 Guidance - The company expects total revenues to be in the range of -1% to flat year over year [6] - Projected earnings are $3.45 (+/- $0.10) per share, an increase from the previous expectation of $3.30 (+/- $0.15) [6] - Adjusted earnings are anticipated to be $4.65 per share, with a target of generating annual free cash flow of approximately $600 million [6]

Core Insights - Stanley Black & Decker reported $3.95 billion in revenue for Q2 2025, a 2% decline year-over-year, with an EPS of $1.08 compared to $1.09 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $3.99 billion by 1.12%, while the EPS exceeded the consensus estimate of $0.38 by 184.21% [1] Financial Performance Metrics - Net Sales for Tools & Outdoor segment were $3.46 billion, below the five-analyst average estimate of $3.52 billion, reflecting a year-over-year decline of 1.9% [4] - Net Sales for Engineered Fastening were $483.8 million, slightly above the estimated $477.91 million, but still a 2.4% decrease compared to the previous year [4] - Normalized Operating Profit for Tools & Outdoor was $276.5 million, exceeding the average estimate of $230.46 million [4] - Normalized Operating Profit for Corporate Overhead was reported at -$62.8 million, worse than the estimated -$55.25 million [4] - Normalized Operating Profit for Engineered Fastening was $52.3 million, slightly above the average estimate of $51.98 million [4] Stock Performance - Over the past month, shares of Stanley Black & Decker have returned +9.1%, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Company Performance & Financials - Whirlpool cut its dividend after missing the quarter [1][3] - Stanley Black & Decker experienced an $800 million tariff impact [1] Market Trends & Industry Dynamics - The tool volume for Stanley Black & Decker is weaker [2] - Outdoor growth for Stanley Black & Decker is lighter [2] - Korean and Chinese companies anticipated tariffs, leading to increased shipments and impacting Whirlpool's sales [3] - Earnings are generally not as good as expected this earning season [4] Risks & Concerns - Stanley Black & Decker's outsized yield raises concerns [2] - There are many names down this morning on earnings [4]

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]