Stanley Black & Decker, Inc. (NYSE:SWK) shares were volatile Tuesday after the company reported its third-quarter results.
The company reported net sales of $3.756 billion, up 0.1% year-over-year, as price increases (+5%) and favorable currency movements (+1%) offset lower volume (-6%).
GAAP diluted EPS was $0.34, and adjusted EPS was $1.43, inclusive of a tax rate benefit. Gross margin was 31.4% and adjusted gross margin was 31.6%.
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Adjusted EPS of $1.43 beat the $1.18 estimate, while sales of $3.756 billion missed the $3.765 billion estimate.
Operating cash flow was $221.2 million, and free cash flow was $155.3 million. SG&A was 21.1% of sales; adjusted SG&A was 21.0%. EBITDA margin was 6.5%; adjusted EBITDA margin was 12.3%.
The quarter included $169.1 million of non-cash asset impairment charges tied to brand prioritization (Lenox, Troy-Bilt, Irwin) and certain minority investments.
Segment & Regional Highlights
Tools & Outdoor sales were $3.255 billion, roughly flat with the prior year as price (+5%), currency (+1%), and a product line transfer from Engineered Fastening (+1%) were offset by volume (-7%). Segment margin was 11.8% and adjusted segment margin was 12.0%.
Regional total revenue growth was North America (-2%), Europe (+6%), and Rest of World (-1%); regional organic revenue was North America (-2%), Europe (flat), and Rest of World (-1%). Management cited tariff impacts alongside pricing and supply-chain transformation efficiencies.
Engineered Fastening sales rose 3% to $500.5 million, with organic revenue up 5% on strength in automotive and aerospace, partially offset by lower industrial volume. Segment margin was 11.9% and adjusted segment margin was 12.8%.
Sequentially, versus the second quarter, segment margin expanded by 470 basis points, and adjusted segment margin expanded by 200 basis points as the automotive market improved.
Cash and cash equivalents were $268.3 million, short-term borrowings were $1.355 billion, current maturities of long-term debt were $554.8 million, and long-term debt was $4.703 billion as of Sept. 27, 2025.
“The gross margin progress achieved during the third quarter illustrates our rapid and effective response to tariffs and our commitment to achieving our long-term financial objectives,” President & CEO Christopher J. Nelson said.
CFO Patrick D. Hallinan added, “During the third quarter, we prioritized meeting the needs of our end users, while executing targeted commercial strategies and supply chain adjustments to mitigate tariffs.”
The Global Cost Reduction Program generated approximately $120 million of incremental pre-tax run-rate savings in the quarter and $1.9 billion since mid-2022, toward a $2.0 billion target, supporting a long-term adjusted gross margin goal of 35% or higher.
Outlook
For 2025, GAAP EPS guidance was lowered to $2.55–$2.70 from $3.35–$3.55, versus a $3.65 estimate.
Adjusted EPS guidance was narrowed to $4.55–$4.65 from $4.55–$4.75, versus a $4.61 estimate.
Management continues to target approximately $600 million of free cash flow for the year.
Price Action: SWK shares were trading lower by 0.63% to $66.78 premarket at last check Tuesday.
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