Stanley Black & Decker — 3Q 2026 Earnings Summary

Financial Performance:

• Net sales were $3.7 billion, down 1% year-over-year on a total basis but up 4% organically.
• Gross margin was 39.0%, up 760 basis points year-over-year; adjusted gross margin was 39.4%, up 780 basis points. Both metrics included a benefit of approximately 430 basis points from net tariff refunds.
• Earnings per share (EPS) were $1.83; adjusted EPS was $2.31. Both figures included a benefit of approximately $0.67 from net tariff refunds.
• SG&A expenses were 24.2% of sales, up 310 basis points year-over-year; adjusted SG&A was 24.2%, up 320 basis points, reflecting incremental costs tied to tariff refunds.
• Net earnings were 7.3% of sales, an increase of 590 basis points.
• EBITDA margin was 14.1%, up 760 basis points; adjusted EBITDA margin was 16.3%, up 400 basis points.
• Cash from operating activities was $659 million; free cash flow was $585 million.
• Total pre-tax non-GAAP adjustments were $89.3 million, primarily related to restructuring costs ($29.5 million), a non-cash asset impairment charge ($19.7 million), and a $20.4 million loss on the sale of a small business in the Engineered Fastening segment.

Guidance and Future Outlook:

• 2026 GAAP EPS guidance raised to $5.45–$5.85 (prior: $4.60–$5.45).
• 2026 adjusted EPS guidance raised and tightened to $5.95–$6.25 (prior: $5.20–$5.80), representing year-over-year growth of 31% at the midpoint compared to 2025.
• 2026 free cash flow guidance raised to $1.0 billion–$1.2 billion (prior: $600 million–$800 million), incorporating tariff refunds realized year-to-date and projected taxes/fees associated with the CAM divestiture.
• Management reaffirmed conviction in the full-year outlook and long-term strategy, citing strong underlying performance and momentum.

Business Segments and Product Lines:

• Tools & Outdoor: Net sales were $3.336 billion, up 2% year-over-year. Organic revenue increased 4%, driven by power tools and strength in U.S. retail and commercial & industrial channels. Segment margin was 17.0%, up 520 basis points; adjusted segment margin was 17.6%, up 560 basis points.
  • Regional performance: North America sales up 3% total (6% organic); Europe down 1% total (1% organic); Rest of World up 2% total (down 1% organic).
  • Strategic transition to a licensing model for gas walk-behind outdoor products negatively impacted sales by 2%.
• Engineered Fastening: Net sales were $396 million, down 21% year-over-year due to the CAM divestiture (-22%). Organic revenues were up 2%, driven by broad-based industrial strength but offset by automotive results below expectations. Segment margin was 11.7%, down 20 basis points; adjusted segment margin was 11.7%, down 110 basis points.

Market and Competitive Landscape:

• Volume growth of 6% was driven by U.S. retail and commercial & industrial channels in Tools & Outdoor.
• Pricing negatively impacted total sales by 2% in Tools & Outdoor and 3% in the segment specifically, while portfolio changes impacted sales by 4% total and 2% in Tools & Outdoor.
• Currency impact was flat for the quarter overall and for the Tools & Outdoor segment.

Risks and Challenges:

• Automotive demand pressure negatively impacted the Engineered Fastening segment margin.
• Future results are subject to risks including macroeconomic factors, trade regulations (tariffs, import/export controls), raw material availability and pricing, supply chain disruptions, and geopolitical conflicts.
• The difference between GAAP and adjusted EPS assumptions includes charges related to footprint actions and cost actions, partially offset by gains on the CAM business sale.

Management Commentary and Tone:

• CEO Chris Nelson highlighted strong underlying performance in Tools & Outdoor, noting that brand activation and innovation efforts are yielding results with 4% organic growth.
• CFO Patrick Hallinan emphasized disciplined execution to drive profitable growth, continued investment in growth, and a balanced approach to capital allocation.
• Management expressed confidence in delivering 2026 and longer-term growth, margin, and cash flow objectives.

Other Key Points:

• Executed $250 million in share repurchases during the quarter, fully utilizing the prior authorization.
• Board of Directors approved a new share repurchase authorization for up to $1 billion on October 29, 2026, expiring on October 29, 2029.
• Debra Crew transitioned to Independent Chair of the Board on October 1, 2026, following the retirement of Executive Chair Donald Allan, Jr.
• The company reported a $16.6 million gross profit charge and $2.8 million SG&A charge related to non-GAAP adjustments.
• A webcast for investors was scheduled for November 4, 2026, at 8:00 am ET.