Stanley Black & Decker Raises Outlook as Volumes Rebound
Second-quarter net sales reached $4.0 billion as organic growth accelerated to 3%.[1][15]
Stanley Black & Decker (SWK), the tool and industrial-products maker, raised its full-year profit outlook after volumes returned to growth and margins widened in the second quarter.
The quarter marked a reversal from the start of the year. Volume rose 3% while pricing was flat, compared with a 3% volume decline and 3% pricing growth in the first quarter. Net tariff refunds also contributed about 250 basis points to gross margin and $0.17 a share to earnings, nine days after the company had said recent Section 232 tariff changes weren't expected to materially affect its 2026 guidance.
Sales were roughly flat from a year earlier and increased from $3.8 billion in the first quarter. Diluted earnings rose to $2.33 a share from 67 cents a year earlier and 39 cents in the preceding quarter, while adjusted earnings increased to $1.57 a share from $1.08 and 80 cents, respectively. Adjusted gross margin expanded to 33.7% from 27.5% a year earlier and 30.2% sequentially.
Tools & Outdoor organic revenue grew 3%, reversing a 1% decline in the first quarter, as volume swung to 3% growth from a 5% contraction. North American organic sales improved to 4% growth, while European sales declined 2%. The segment's adjusted margin rose to 11.8% from 8.7% sequentially, with tariff refunds contributing about 150 basis points.
Engineered Fastening sales fell 18% after the CAM divestiture reduced revenue by 21%, though organic growth remained positive at 3%. Industrial strength and automotive-fastener growth drove the underlying increase, and the segment's adjusted margin rose to 13.0% from 12.0% in the first quarter.
Stanley now expects GAAP earnings of $4.60 to $5.45 a share, up from its previous range of $4.15 to $5.35. Adjusted earnings are expected at $5.20 to $5.80 a share, compared with the prior forecast of $4.90 to $5.70. The company also lifted its free-cash-flow forecast by $100 million at each end to between $600 million and $800 million.
Operating cash flow increased to $763.1 million from $214.3 million a year earlier, while free cash flow rose to $698.2 million from $134.7 million. Stanley received $1.81 billion from the CAM sale, reduced debt by $1.7 billion and repurchased about 3.2 million shares for $250 million during the quarter.