Stanley Black & Decker Reports 1Q 2025 Results

Core Insights - Stanley Black & Decker reported its eighth consecutive quarter of revenue growth, with first quarter 2025 revenues of $3.7 billion, down 3% year-over-year, but with 1% organic growth [1][7][8] - The company achieved a gross margin of 29.9%, an increase of 130 basis points compared to the previous year, driven by supply chain efficiencies and new product innovations [7][8][10] - The company is implementing price increases and supply chain adjustments in response to U.S. tariffs, with an estimated negative impact of$ 0.75 on 2025 EPS due to these tariffs [3][11][12] Financial Performance - First quarter 2025 net sales were $3,744.6 million, a decrease from$ 3,869.5 million in the prior year, with a gross profit of $1,120.8 million [28] - The Tools & Outdoor segment reported sales of$ 3,280.9 million, flat compared to the previous year, while the Engineered Fastening segment saw a decline in sales to $463.7 million, down 21% year-over-year [35] - Adjusted EPS for the first quarter was$ 0.75, compared to $0.56 in the prior year, reflecting improved operational efficiency [39] Segment Analysis - The Tools & Outdoor segment achieved a profit of$ 289.2 million with a segment margin of 8.8%, up 100 basis points from the previous year [5][35] - The Engineered Fastening segment's profit was $39.0 million, with a segment margin of 8.4%, down from 11.1% in the prior year, primarily due to lower volume in higher-margin automotive [9][35] - The company’s corporate overhead was reported at$ (74.4) million, impacting overall segment profitability [35] Cost Management Initiatives - The Global Cost Reduction Program is expected to generate $2 billion in pre-tax run-rate cost savings by the end of 2025, with$ 130 million achieved in the first quarter of 2025 [10] - The company is focusing on supply chain transformation to enhance gross margins, targeting a long-term adjusted gross margin of over 35% [10][11] - Management is actively monitoring tariff policies and adjusting pricing strategies to mitigate impacts on profitability [3][11] Future Outlook - The company is planning for a range of scenarios in 2025, with a target free cash flow of at least $500 million [12][20] - The 2025 EPS planning assumption is set at$ 3.30 (+/- $0.15) on a GAAP basis, with an adjusted basis of approximately$ 4.50 [12][20] - Management will provide further details on planning assumptions and scenario analysis during the earnings call [12][14]