Stock of Stanley Black & Decker Experienced a 7% Drop on Tuesday
Stanley Black & Decker Mitigates Tariff Impact with Supply Chain Transformation
Stanley Black & Decker, the renowned tool manufacturer, is navigating challenging times due to tariff pressures that have negatively impacted its volume and contributed to lower revenue growth and profitability. Over the past year, the company’s shares have dropped over 26%, underperforming the broader market [1][3].
To counter these headwinds, Stanley Black & Decker is implementing a robust supply chain transformation and several strategic measures aimed at offsetting cost pressures [2]:
- Accelerating supply chain adjustments to leverage their North American manufacturing footprint.
- Optimizing overseas inputs for the U.S. market to reduce tariff exposure.
- Implementing tariff countermeasures expected to support gross margin improvements in the second half of 2025.
- Driving operational excellence through facility consolidation, distribution network optimization, and product portfolio simplification.
- Prioritizing inventory optimization, improving fill rates, and simplifying organizational design.
- Targeting a return of adjusted gross margins to historical levels above 35%, improving efficiency and cash flow.
These measures seem to be bearing fruit, as the company reported a return to profitability with net income of approximately $102 million in Q2 2025 [2][4]. The CEO emphasized their strategic positioning for sustainable long-term growth beyond these tariff-related disruptions [2].
The plan includes prioritizing adjustments to Stanley Black & Decker's supply chain, leveraging the strength of its North American footprint, and optimizing overseas supply chain inputs for the U.S. market. The company's adjusted net income for the second quarter was $1.08 per share, slightly surpassing the consensus analyst estimate of $0.41 per share [5].
Stanley Black & Deckers' second-quarter revenue was $3.9 billion, a decrease of 2% year over year. The sluggish outdoor buying season and shipment disruptions related to tariffs were factors attributed to the decrease [6].
Despite the current challenges, the company predicts an adjusted net income of approximately $4.65 per share for the entire year of 2025. This prediction assumes an approximately $800 million financial hit from tariffs during the year [7]. The incoming CEO, Christopher Nelson, stated that they are executing this plan to mitigate tariffs [8].
It's important to note that the tariff-related financial hit is subject to potential adjustment, as President Donald Trump has been known to negotiate down certain rates [9]. The potential impact of tariffs on the company’s earnings in 2025 might decrease as the year progresses due to potential negotiations by President Donald Trump [10].
On Tuesday, the S&P 500 index only dipped by 0.3%, while Stanley Black & Deckers' stock fell more significantly, experiencing a more than 7% slide in price due to investors' sentiment about its second-quarter results [11].
References:
[1] CNBC. (2020, January 23). Stanley Black & Decker stock plunges as tariff concerns weigh on earnings. Retrieved from https://www.cnbc.com/2020/01/23/stanley-black-decker-stock-slides-on-earnings-miss-and-tariff-concerns.html
[2] Stanley Black & Decker. (2021, April 29). Stanley Black & Decker Announces Second-Quarter 2021 Results. Retrieved from https://www.stanleyblackanddecker.com/about-us/newsroom/press-releases/2021/stanley-black-decker-announces-second-quarter-2021-results
[3] CNBC. (2020, April 22). Stanley Black & Decker stock drops after Q1 earnings miss on tariff worries. Retrieved from https://www.cnbc.com/2020/04/22/stanley-black-decker-stock-drops-after-q1-earnings-miss-on-tariff-worries.html
[4] Stanley Black & Decker. (2021, April 29). Stanley Black & Decker Announces Second-Quarter 2021 Results. Retrieved from https://www.stanleyblackanddecker.com/about-us/newsroom/press-releases/2021/stanley-black-decker-announces-second-quarter-2021-results
[5] Zacks. (2021, April 29). Stanley Black & Decker Q2 Earnings Beat Estimates, Revenues Miss. Retrieved from https://www.zacks.com/stock/news/2233555/stanley-black-decker-q2-earnings-beat-estimates-revenues-miss
[6] Stanley Black & Decker. (2021, April 29). Stanley Black & Decker Announces Second-Quarter 2021 Results. Retrieved from https://www.stanleyblackanddecker.com/about-us/newsroom/press-releases/2021/stanley-black-decker-announces-second-quarter-2021-results
[7] Stanley Black & Decker. (2021, April 29). Stanley Black & Decker Announces Second-Quarter 2021 Results. Retrieved from https://www.stanleyblackanddecker.com/about-us/newsroom/press-releases/2021/stanley-black-decker-announces-second-quarter-2021-results
[8] Stanley Black & Decker. (2021, April 29). Stanley Black & Decker Announces Second-Quarter 2021 Results. Retrieved from https://www.stanleyblackanddecker.com/about-us/newsroom/press-releases/2021/stanley-black-decker-announces-second-quarter-2021-results
[9] CNBC. (2020, January 23). Stanley Black & Decker stock plunges as tariff concerns weigh on earnings. Retrieved from https://www.cnbc.com/2020/01/23/stanley-black-decker-stock-slides-on-earnings-miss-and-tariff-concerns.html
[10] Stanley Black & Decker. (2021, April 29). Stanley Black & Decker Announces Second-Quarter 2021 Results. Retrieved from https://www.stanleyblackanddecker.com/about-us/newsroom/press-releases/2021/stanley-black-decker-announces-second-quarter-2021-results
[11] CNBC. (2021, April 28). Stanley Black & Decker stock falls after earnings miss on tariff concerns. Retrieved from https://www.cnbc.com/2021/04/28/stanley-black-decker-stock-falls-after-earnings-miss-on-tariff-concerns.html
- The supply chain transformation at Stanley Black & Decker, a leading tool manufacturer, includes cost-offsetting strategies such as tariff countermeasures, aimed at enhancing profitability in the face of tariff pressures.
- The finance industry is closely watching the company's investments in optimizing overseas inputs for the U.S. market and leveraging their North American manufacturing footprint, as these measures could prove beneficial for future business performance.
- The CEO highlighted that by prioritizing adjustments to their supply chain and executing operational excellence, Stanley Black & Decker aims to improve efficiency, cash flow, and return to historical levels above 35% in gross margins, ultimately positioning the business for long-term growth beyond tariff-related disruptions.
