Stanley Black & Decker(US:SWK)2024-05-02 16:00Financial Data and Key Metrics Changes - The first quarter organic revenue was down 1%, with adjusted gross margin at 29%, up 590 basis points year-over-year, and adjusted diluted earnings per share at $0.56 [30][58][60] - The company expects adjusted EPS for 2024 to range from $3.50 to $4.50, with free cash flow projected between $600 million and $800 million [30][40] Business Line Data and Key Metrics Changes - Tools & Outdoor revenue was approximately $3.3 billion, down 1% organically, with DEWALT growth offset by muted consumer demand [31][58] - The Industrial segment saw a 5% decline in revenue, but Engineered Fastening organic revenue grew by 5%, driven by aerospace growth of 30% [14][58] Market Data and Key Metrics Changes - North America organic revenue was down 2%, while Europe saw a 3% decline, with growth in Latin America at mid-teens [62] - The outdoor product line experienced a 2% organic revenue growth, driven by strong demand for handheld cordless outdoor power equipment [32] Company Strategy and Development Direction - The company is focused on cost efficiencies and margin improvement, targeting $1.5 billion in pre-tax run rate savings by the end of 2024 [27][37] - Investments are being directed towards innovation and market activation, particularly in the DEWALT brand, to capture growth and margin opportunities [34][69] Management's Comments on Operating Environment and Future Outlook - Management anticipates mixed demand trends to persist, with a cautious optimism regarding the outdoor season [13][87] - The company remains focused on gaining market share despite a soft market environment, with expectations for organic revenue to be flat to down slightly [40][101] Other Important Information - The sale of STANLEY Infrastructure was completed, with net proceeds used to reduce short-term debt [12][13] - The company is committed to maintaining a disciplined approach to cost management while funding long-term growth investments [40][69] Q&A Session Summary Question: What are the demand trends for Tools and Storage for the rest of the year? - Management expects the current trend to persist, with a full-year outlook of flat to slightly down organic revenue [19][20] Question: Can you elaborate on DEWALT's growth drivers? - Growth is driven by supply chain improvements and a focus on professional end users, with significant investments in product development and market activation [45][80] Question: How is the company managing its portfolio? - The company is evaluating opportunities for pruning non-core assets while focusing on high-quality assets that contribute significantly to EBITDA [84][135] Question: What is the outlook for the outdoor market? - The outdoor market remains soft compared to 2019, but management is cautiously optimistic about the upcoming season [92][139] Question: How does the company plan to manage SG&A expenses? - SG&A is expected to be in the mid-21% range, with a focus on preserving growth investments while managing expenses [81][116]