Core Points - Stanley Black & Decker will present at the 2025 Goldman Sachs Industrials and Materials Conference on December 4, 2025, at 11:30 AM ET [1] - The live webcast will be accessible in the "Investors" section of the company's website, with a replay available for 30 days [2] - Founded in 1843, Stanley Black & Decker is a global leader in tools and outdoor products, employing approximately 48,000 people [3] Company Overview - The company produces a wide range of products including power tools, hand tools, storage solutions, digital jobsite solutions, outdoor products, and engineered fasteners [3] - Stanley Black & Decker's portfolio includes well-known brands such as DEWALT®, CRAFTSMAN®, STANLEY®, BLACK+DECKER®, and Cub Cadet® [3] - The company operates manufacturing facilities globally, supporting builders, tradespeople, and DIY enthusiasts [3]

Group 1 - Stanley Black & Decker, Inc. (NYSE:SWK) is recognized as one of the 15 Best Passive Income Stocks to buy currently [1] - UBS raised its price target for Stanley Black & Decker to $105 from $100 while maintaining a Buy rating [2] - For Q3 2025, the company reported revenue of $3.8 billion, which was flat year-over-year and $12 million below analyst expectations [3] Group 2 - The company achieved a gross margin of 31.4% and an adjusted gross margin of 31.6% [3] - The CEO highlighted a strategic shift and stronger brand activity across core product lines [3] - Stanley Black & Decker is on track with its $2 billion cost-reduction plan, expected to be completed by the end of 2025, and aims for a 35% adjusted gross margin [4] Group 3 - The company is focusing on additional investments in its DEWALT, STANLEY, and CRAFTSMAN brands, transitioning to a brand-focused, market-supported model [4]

Group 1 - Stanley Black & Decker is recognized as one of the world's largest tool companies, owning several leading brands including DEWALT, Stanley, and Craftsman [1] - The company is represented at the Global Industrial Conference by President and CEO Chris Nelson, along with other key executives [2]

Summary of Stanley Black & Decker FY Conference Call Company Overview - **Company**: Stanley Black & Decker (NYSE: SWK) - **Industry**: Tools and Building Products - **Key Brands**: DeWalt, Stanley, Craftsman Core Points and Arguments 1. **Cost Reduction and Margin Goals**: The company is on track to achieve a $2 billion cost-out target by year-end, aiming for a margin goal of over 35% with margin expansion observed in the latest quarter despite previous setbacks due to tariffs [2][3][4] 2. **Balance Sheet Strengthening**: Plans to prune the aerospace fastening business to improve the balance sheet, targeting a debt to EBITDA ratio of 2.5 times [3][4] 3. **Organizational Changes**: Transitioning from a product-centric to a brand-centric approach, establishing General Managers for key brands to enhance customer engagement and innovation [6][7][8] 4. **Centralized Engineering**: Moving from a fragmented engineering structure to a centralized one to leverage scale and improve product development efficiency [9][12] 5. **Platform Product Strategy**: Defining platform products as those with over 70% common components, which enhances speed and productivity in product development [15][18] 6. **AI Utilization**: Implementing AI tools for customer feedback analysis and improving customer service efficiency, allowing sales teams to focus more on selling rather than administrative tasks [20][24][25] 7. **Field Resources Investment**: Increased field resources by over 600 in key growth areas, resulting in a doubling of conversion pipeline velocity compared to the previous year [28][29] 8. **Battery System Strategy**: Emphasizing the importance of battery platforms, with over 80% of customers purchasing tools within the same battery ecosystem, creating a competitive moat [36][37][38] 9. **Brand Revitalization**: Initiatives to revitalize the Stanley brand, focusing on product updates and targeting small residential contractors, while also leveraging Craftsman for international growth [41][44][45] Additional Important Insights - **Customer-Centric Focus**: The company is shifting towards understanding and solving customer problems rather than just focusing on product features [10][11] - **Operational Efficiency**: Efforts to reduce G&A costs while increasing sales and marketing investments, aiming for a more efficient organizational structure [33][34] - **Market Positioning**: DeWalt is positioned strongly in the pro market, with strategies in place to drive growth through targeted investments and field resources [39][40] - **Craftsman Brand Strategy**: Craftsman is viewed as a reclamation project, with expectations for growth to begin in late 2026 or early 2027 as new products are launched [45]

Core Insights - Stanley Black & Decker, Inc. has significantly underperformed the broader market and sector over the past year, with a stock decline of 26.7% in the last 52 weeks and 16% year-to-date, while the S&P 500 Index gained 13.4% and the Industrial Select Sector SPDR Fund gained 7.9% [2][3]. Financial Performance - In Q3, Stanley Black & Decker reported net revenues of $3.8 billion, reflecting a year-over-year increase of 13 basis points, but falling 35 basis points short of market expectations. The company experienced a 6% drop in sales volumes, which was partially offset by price gains and favorable currency movements [4]. - The adjusted selling and administrative expenses as a percentage of sales increased from 20.8% in the previous year to 21% [5]. - The adjusted EPS for Q3 grew from $1.22 in Q3 2024 to $1.43, exceeding consensus estimates by 20.2% [5]. Future Outlook - For the full fiscal year 2025, analysts project an adjusted EPS of $4.55, representing a 4.4% year-over-year increase. The company has a strong history of earnings surprises, having surpassed bottom-line estimates in each of the past four quarters [6]. - Among 17 analysts covering the stock, the consensus rating is a "Moderate Buy," consisting of six "Strong Buys," ten "Holds," and one "Strong Sell" [6]. Analyst Ratings - On November 5, Wells Fargo analyst Joseph O'Dea maintained an "Equal-Weight" rating on the stock but reduced the price target from $80 to $75 [7].

Core Points - Stanley Black & Decker will present at Baird's 2025 Global Industrial Conference on November 12, 2025, at 12:35 PM CT [1] - The live webcast will be accessible in the "Investors" section of the company's website, with a replay available for 30 days [2] - Founded in 1843, Stanley Black & Decker is a global leader in tools and outdoor products, employing approximately 48,000 people [3] Company Overview - The company produces a wide range of products including power tools, hand tools, storage solutions, and outdoor products [3] - Stanley Black & Decker's portfolio includes well-known brands such as DEWALT®, CRAFTSMAN®, STANLEY®, BLACK+DECKER®, and Cub Cadet® [3] - The company operates manufacturing facilities globally, supporting builders, tradespeople, and DIY enthusiasts [3]

Core Insights - Stanley Black & Decker, Inc. (SWK) reported third-quarter 2025 adjusted earnings of $1.43 per share, exceeding the Zacks Consensus Estimate of $1.19, representing a year-over-year increase of 17.2% [1][9] - The company's net sales were $3.76 billion, slightly missing the consensus estimate of $3.77 billion, and remained flat compared to the same quarter last year [1][9] Segmental Performance - The Tools & Outdoor segment generated revenues of $3.26 billion, consistent with the year-ago quarter, while the Engineered Fastening segment reported revenues of $501 million, up 3% year over year [2][3] Margin Analysis - Cost of sales decreased by 2% year over year to $2.58 billion, leading to a gross profit increase of 5.2% to $1.18 billion, with a gross margin improvement of 150 basis points to 31.4% [4] - Adjusted EBITDA rose by 13.4% year over year to $461.0 million, with the margin increasing by 150 basis points to 12.3% [4] Balance Sheet and Cash Flow - At the end of the third quarter, cash and cash equivalents stood at $268.3 million, down from $290.5 million at the end of fourth-quarter 2024, while long-term debt decreased to $4.70 billion from $5.6 billion [5] - In the first nine months of 2025, net cash generated by operating activities was $15.5 million, significantly lower than $427.8 million in the previous year, with free cash flow before dividends reported as negative $195.0 million [6] 2025 Guidance - The company anticipates total revenues to be in the range of a decline of 1% to flat year-over-year, with earnings projected between $2.55 and $2.70 per share, down from the previous expectation of $3.45 [7]

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Financial Data and Key Metrics Changes - Total revenue for the third quarter was $3.8 billion, flat compared to the prior year, with a 1% organic decline driven by a 5% increase in pricing and a 6% decrease in volume [16][18] - Adjusted gross margin rate was 31.6%, up 110 basis points year over year, primarily due to pricing strategies and supply chain efficiencies [17][25] - Adjusted EBITDA margin was 12.3%, reflecting a 150 basis point improvement year over year [17] Business Line Data and Key Metrics Changes - Tools and outdoor segment revenue was approximately $3.3 billion, flat year over year, with a 2% organic revenue decline due to a 5% pricing benefit offset by a 7% volume decrease [18][20] - Engineered fastening segment revenue grew 3% on a reported basis and 5% organically, driven by a 4% volume increase and a 1% price benefit [22] - DEWALT brand maintained strong momentum with revenue expansion across all product lines and regions, reflecting targeted investments in innovation [20] Market Data and Key Metrics Changes - North America organic revenue for tools and outdoor declined 2%, with end user demand starting strong but moderating later in the quarter [21] - In Europe, organic revenue was flat, with growth in the U.K. offset by softer conditions in France and Germany [22] - The rest of the world saw a 1% organic revenue decline, primarily due to market softness in Asia [22] Company Strategy and Development Direction - The company aims to achieve a 35% adjusted gross margin while strengthening its balance sheet, focusing on activating brands, driving operational excellence, and accelerating innovation [7][15] - A strategic transformation program is on track to deliver $2 billion in cost reductions by year-end 2025, with $120 million in incremental pre-tax run rate cost savings achieved in the third quarter [28][30] - The company is reducing reliance on Chinese imports, targeting less than 10% of U.S. supply from China by mid-2026 [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging macroeconomic environment but remains confident in achieving long-term financial goals through disciplined execution [16][40] - The outlook for 2025 anticipates total company sales to be flat to down 1%, with adjusted earnings per share expected to be approximately $4.55 [30][33] - Management emphasizes the importance of maintaining operational resilience and adapting to evolving market conditions [40] Other Important Information - The company recorded a $169 million pre-tax non-cash asset impairment charge in the third quarter, primarily related to brand prioritization strategy adjustments [31] - Free cash flow for the third quarter was $155 million, contributing to a full-year target of $600 million [36][37] Q&A Session Summary Question: How did volumes perform relative to expectations? - Management indicated that volumes were in line with expectations, starting strong but tapering towards the end of the quarter due to a non-standard promotional window [44][46] Question: What are the profit levers for the fourth quarter? - Operating profit is expected to expand due to gross margin improvements and SG&A expense reductions, with a target gross margin around 33% [49][50] Question: What is the impact of tariff inflation on pricing? - The second price increase is expected to be in the low single-digit range, with minimal impact from recent tariff changes [56][58] Question: How does the company view its position in the housing market? - Management believes the company is well-positioned to benefit from any future housing market recovery, focusing on building relationships and innovation during the current market retrenchment [80][84] Question: What progress has been made on USMCA compliance? - Significant progress has been made towards USMCA compliance, with no structural roadblocks anticipated [86][88]

Financial Data and Key Metrics Changes - Total revenue for the third quarter was $3.8 billion, flat compared to the prior year, with a 1% organic decline driven by a 5% increase in pricing and a 6% decrease in volume [16][18] - Adjusted gross margin rate was 31.6%, up 110 basis points year-over-year, primarily due to pricing strategies and supply chain efficiencies [17][25] - Adjusted EBITDA margin was 12.3%, reflecting a 150 basis point improvement year-over-year [17] - Adjusted earnings per share was $1.43, including a $0.25 tax benefit [18][31] Business Line Data and Key Metrics Changes - Tools and outdoor segment revenue was approximately $3.3 billion, flat year-over-year, with a 2% organic revenue decline due to a 5% pricing benefit offset by a 7% volume decrease [18][20] - DEWALT brand maintained strong momentum with revenue growth across all product lines and regions, reflecting targeted investments in innovation [20] - Engineered fastening segment revenue grew 3% on a reported basis and 5% organically, driven by a 4% volume increase [22][23] Market Data and Key Metrics Changes - North America organic revenue declined 2%, consistent with overall segment performance, while Europe remained flat with growth in the U.K. offset by declines in France and Germany [21][22] - The aerospace business achieved over 25% organic growth, supported by strong demand for fasteners and fittings [23] Company Strategy and Development Direction - The company aims to achieve a 35% adjusted gross margin while executing three strategic imperatives: activating brands with purpose, driving operational excellence, and accelerating innovation [7][15] - A focus on reducing U.S. supply from China to less than 10% by mid-2026 is part of the strategy to improve supply chain resiliency and achieve gross margin objectives [29][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging macroeconomic environment but remains confident in achieving long-term financial goals through disciplined execution and strategic initiatives [16][40] - The company expects continued year-over-year expansion of adjusted gross margin, targeting around 33% for the fourth quarter [34][35] Other Important Information - The company has made substantial progress in its global cost reduction transformation program, achieving approximately $120 million in incremental pre-tax run rate cost savings in the third quarter [28] - A non-cash asset impairment charge of $169 million was recorded in the third quarter, primarily affecting three trade names [31] Q&A Session Summary Question: How did volumes perform relative to expectations? - Management indicated that volumes were in line with expectations, starting strong but tapering towards the end of the quarter due to a non-standard promotional window [44][46] Question: What are the main profit levers for the fourth quarter? - Profit expansion is expected from gross margin improvement and SG&A expense reduction, with a target gross margin around 33% [49][51] Question: What is the impact of tariff inflation on pricing? - The second price increase is expected to be in the low single-digit range, with minimal impact from recent tariff reductions [56][58] Question: How does the company view its position in the housing market? - Management believes the company is well-positioned to benefit from potential future housing market improvements, focusing on building relationships and innovation during the current market retrenchment [80][84] Question: What progress has been made on USMCA compliance? - Significant progress has been made, with no structural roadblocks anticipated, aiming to align with industry averages for compliance [86][88]