Stanley Black & Decker Inc. reported Thursday weakening consumer demand that led to an 80% drop in second-quarter profit.
The New Britain manufacturer of tools and storage equipment reduced its profit guidance for the year and announced cost-cutting intended to deliver $1 billion in savings by the end of 2023.
Shares plunged 14%, to 103.22 in morning trading.
In the three months ending June 30, net income fell to $87.6 million, or 57 cents a share, from $459.5 million, or $2.75 a share in the same quarter last year.
Revenue rose 16%, to $4.4 billion, but much of that was attributed to outdoor power equipment acquisitions.
For the full year, Stanley Black & Decker said it expects earnings per share of between $5 and $6, down from previous guidance of $9.50 to $10.50. The company said the reduced guidance includes a cut of $4.25 per share due to weaker revenue in the second half of the year due primarily to slower consumer demand in its tools and outdoor businesses.
Chief Executive Officer Donald Allan Jr. cited inflation, rising interest rates and significantly slower demand in late May and June. After benefiting from a surge in do-it-yourself projects by consumers forced to stay home during the pandemic, Stanley Black & Decker now expects consumer demand to approach 2019 levels for the remainder of this year.
