Stanley Black & Decker tops Q2 expectations despite revenue miss

Investing.com -- Stanley Black & Decker (NYSE:SWK) on Tuesday reported second-quarter adjusted earnings that significantly exceeded analyst expectations, despite revenue falling short of estimates amid challenging market conditions.

The worldwide tools and outdoor leader posted adjusted earnings per share of $1.08, substantially beating the analyst consensus of $0.41, while revenue came in at $3.9 billion, slightly below the $4 billion estimate.

Revenue declined 2% compared to the same quarter last year, as volume decreased 4%, partially offset by price increases of 1% and favorable currency impact of 1%.

The company attributed the revenue shortfall to a slow outdoor buying season and tariff-related shipment disruptions, though its professional DEWALT brand continued to show growth.

Shares of Stanley Black & Decker were relatively unchanged following the report, dipping just 0.2%.

"We delivered a solid second quarter amid the dynamic operating environment with the continued growth of our professional DEWALT brand," said Donald Allan, Jr., Stanley Black & Decker’s President & CEO.

"With our supply chain transformation on track to completion in 2025, we are positioning the Company to embark on the next chapter of delivering sustainable growth and long term shareholder returns."

The company’s adjusted gross margin was 27.5%, down 170 basis points YoY, primarily due to a 3-point impact from tariffs and lower volume.

These headwinds were partially offset by supply chain transformation efficiencies and benefits from second-quarter price increases.

The Tools & Outdoor segment, which represents the bulk of the company’s business, saw organic revenue decline 3%.

Looking ahead, Stanley Black & Decker provided a 2025 adjusted EPS outlook of approximately $4.65, with a GAAP EPS target of $3.45 (+/- $0.10).

The company is targeting annual free cash flow of approximately $600 million while implementing measures to mitigate an estimated $800 million gross annualized tariff impact.

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