Dive Brief:
- Stanley Black & Decker’s fourth quarter net sales fell 1% year over year to about $3.8 billion, primarily due to retail softness in North America, according to a Feb. 4 earnings report.
- Net sales for the full year decreased 1.5% to $15.1 billion, ending 2025 with cash flow of $688 million, surpassing the toolmaker’s $600 million expectations, Executive VP and CFO Patrick Hallinan said on an earnings call Wednesday
- Additionally, Stanley Black & Decker completed its global cost-reduction program, which resulted in $120 million in Q4 and delivered $2.1 billion in savings since the program launched in 2022, per the earnings release.
Dive Insight:
Stanley Black & Decker pursued “aggressive tariff actions” in 2025, including price increases and supply chain revamps to mitigate the levies’ impact, President and CEO Christopher Nelson said on the call.
A lot of the retail volume challenges were in lower-priced products, “as consumers have gravitated towards promotions during these uncertain economic times,” Nelson said. “As we've mentioned previously, we have expected consumer, competitor and channel response to the meaningful tariff pricing would take a while to shake out and that our top line could be volatile during this period.”
Stanley Black & Decker’s tools and outdoor segment, as well as its engineered fastening segment, saw net sales declines in 2025. Tool and outdoor’s net sales declined 1.1% to approximately $13.2 billion compared to 2024. Engineer fastening’s net sales decreased 4.3% to nearly $2.1 billion.
However, the DeWalt tool brand and aerospace fasteners saw “notable revenue growth,” Nelson said.
“DeWalt successfully overcame broader headwinds and posted low single-digit organic growth for the full year, including organic growth across all product lines and regions,” he said. “Our success was underpinned by prioritized marketing activation and accelerated innovation initiatives.”
The company’s response led to an expansion of 70 basis points to 30.7% for the full year, Nelson said on the call.
Furthermore, the company’s “swift adaptability” limited the gross margin decline to just one quarter, Hallinan said.
Looking ahead, Stanley Black & Decker expects to make progress on its key financial objectives in 2026, Hallinan said. Though it won’t be “linear,” due to peaking 2025 tariff expenses, volume deleveraging costs rolling into Q1 and H1 and continuing macroeconomic and geopolitical uncertainties.
The company also plans to refine its pricing and promotion strategy, tweaking as Stanley Black & Decker monitors its end users, buyers and customers’ behaviors in each segment, Nelson said.
Moreover, the company’s divestiture of Consolidated Aerospace Manufacturing is expected to close in the first half of 2026, which will impact its second-half results.
Stanley Black & Decker also plans to phase out manufacturing of its gas-powered walk-behind outdoor product lines, which it expects will reduce revenue by approximately $120 million to $140 million in 2026, and by another $150 million in 2027. The company will begin the transition in mid-2026 and will instead adopt a licensing model for these products.
Additionally, Stanley Black & Decker is targeting free cash flow of up to $900 million, including funds from the sale of its fastener subsidiary, Consolidated Aerospace Manufacturing.
The company is selling CAM for $1.8 billion to Howmet Aerospace and anticipates proceeds from the divestiture to be in the range of $1.53 billion to $1.6 billion. The funds will be used to reduce the toolmaker’s debt, providing Stanley Black & Decker with “greater flexibility,” Hallinan said.
Stanley Black & Decker also expects its sales to improve following new product launches and commercial initiatives focused on outperforming the market.
“We will be well-positioned to respond to market dynamics, invest in growth, and enhance shareholder value creation,” he added. “We are committed to maintaining a solid investment-grade credit rating to support our brands and our businesses, and we will continue to allocate capital thoughtfully with organic value creation the priority.”
