Summary of Stanley Black & Decker Q1 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: Increased by 3% overall; flat on an organic basis.

Adjusted Gross Margin: 30.2%, down 20 basis points year-over-year.

Adjusted EBITDA Margin: 9.2%, down 50 basis points year-over-year.

Adjusted Earnings Per Share (EPS): $0.80, exceeding guidance of $0.55 to $0.60 by $0.20.

Tools & Outdoor Segment Revenue: Approximately $3.3 billion, up 2% year-over-year; organic revenue down 1%.

Engineered Fastening Segment Revenue: Grew 10% overall and 7% organically, with a 31% organic growth in Aerospace.

Free Cash Flow: Expected to be between $500 million to $700 million, consistent with prior guidance.

2Strategic Updates and Business Highlights

Successful completion of the Aerospace Fasteners business divestiture, generating approximately $1.6 billion in net proceeds, primarily used for debt reduction.

Focus on capital allocation strategy biased towards share repurchases, with a $500 million buyback authorized by the Board.

Continued investment in brand activation, operational excellence, and innovation, particularly in the DEWALT and STANLEY brands, with expectations for growth in the STANLEY brand by mid-year.

Strong performance in the professional end-user market, particularly in the U.S. commercial and industrial channel, indicating effective brand activation strategies.

3Forward Guidance and Outlook

2026 Adjusted EPS Guidance: Expected to range from $4.90 to $5.70, with total company revenue anticipated to be flat year-over-year.

Organic Revenue Growth: Expected to be low single-digit percentage year-over-year.

Adjusted Gross Margin Improvement: Anticipated to expand by approximately 150 basis points year-over-year.

Second Quarter Guidance: Projected net sales around $3.9 billion, down slightly year-over-year but up low single-digit on an organic basis; adjusted EPS expected to be $1.15 to $1.25.

4Bad News, Challenges, or Points of Concern

Volume Pressure: Notable decline in organic revenue for power tools and hand tools, reflecting broader market challenges and competitive pricing pressures.

Inflationary Pressures: Increased costs in resins, freight, and battery metals due to geopolitical conflicts, which may offset tariff benefits.

Market Conditions: Continued softness in consumer demand, particularly in the DIY segment, and uncertainty regarding the macroeconomic environment could impact future performance.

Competitive Landscape: Increased pricing actions from competitors may lead to intensified price competition in the back half of the year.

5Notable Q&A Insights

Management indicated that the gross margin improvement in the second half of the year is driven by productivity benefits, adjustments to fixed cost structures, and tariff mitigation efforts.

The company is on track to reduce its reliance on China-sourced products to less than 5% of U.S. sales by year-end.

The outdoor segment showed promising sell-in performance, but overall demand remains uncertain as the selling season progresses.

Management remains cautious about consumer trends, anticipating stability amidst a challenging global backdrop, while being prepared to adjust operations based on market conditions. This summary encapsulates the key points from the earnings call, providing a clear overview of Stanley Black & Decker's financial performance, strategic direction, and outlook for 2026.