Key Takeaways

  • Stanley Black & Decker's second-quarter net sales were approximately $4 billion, roughly flat compared with the same period last year. The tool maker also benefited from tariff refunds and tailwinds from the $1.8 billion divestiture of its aerospace manufacturing business completed in April.
  • The New Britain, Connecticut-based company saw growth in its tools and outdoor products sales, driven primarily by U.S. retail, commercial, and industrial channels. Meanwhile, net profit more than tripled year over year to $351.3 million, including tariff refund gains, which boosted the profit margin by 600 basis points to 33%.
  • After completing the sale of its aerospace fasteners business early in the quarter, Stanley Black & Decker repaid $1.7 billion in debt and repurchased 3.2 million shares worth $250 million. The company also raised and narrowed its 2026 financial guidance.

Deeper Dive

Stanley Black & Decker recognized a $118 million pretax gain in the second quarter related to the first phase of the tariff refund process under the International Emergency Economic Powers Act (IEEPA). CEO Christopher Nelson said on Monday's earnings call that the company would "use tariff refunds to accelerate growth investments."

U.S. Customs and Border Protection (CBP) launched the IEEPA refund system in April after the Supreme Court struck down the Trump administration's tariffs in February. Stanley Black & Decker said it has submitted claims for the second phase of refunds.

The company did not include any unrealized future refunds in its 2026 guidance. CFO Patrick Hallinan cited uncertainty around timing and amounts during the call.

Stanley Black & Decker raised and narrowed its adjusted full-year earnings per share outlook to a range of $5.20 to $5.80, representing expected growth of 18% year over year at the midpoint. The company reported first-half adjusted earnings of $357.9 million, or $2.36 per share. Hallinan said full-year revenue would be flat compared with last year.

Regarding the government's latest Section 301 tariffs, which took effect last week, Hallinan said Stanley Black & Decker expects to feel the same level of impact over the coming months as it did with the previous IEEPA tariffs. The broad 10% or 12.5% tariffs on imports from more than 80 countries were imposed on forced labor grounds.

The company also expects to experience a temporary period of Section 122 tariffs, which are at a lower rate than IEEPA. Hallinan noted that this tariff tailwind is being offset by inflationary pressures from battery metals, tungsten, and oil.

He said that if inflationary pressures persist, "by 2027, the probability of price increases is greater than not."

In the second quarter, Stanley Black & Decker's tools and outdoor segment posted sales of $3.56 billion, up 3% year over year. The report indicated this was driven mainly by strong demand in the U.S. power tools market, particularly for brands such as Dewalt, Craftsman, and Stanley.

The company's engineered fastening segment saw sales decline 18% year over year to $396 million, primarily due to the sale of its aerospace manufacturing business to Howmet.

Nelson said: "Through the disciplined execution of our strategy, we are delivering profitable organic growth and are on track to achieve our full-year sales and margin targets. We are confident in our strategy and in our team's ability to continue executing and delivering results."