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Stanley Black & Decker shares fall as tool company reports weaknesses in consumers, cars

Posted on by L. Dreeye
Stanley Black & Decker shares fall as tool company reports weaknesses in consumers, cars

Key Findings

  • Stanley Black & Decker missed profit and sales forecasts due to weak demand from consumers and the auto sector. Gross margins increased due to improvements in the tool maker’s supply chain.
  • The tool company narrowed its full-year adjusted earnings per share forecast.
  • The news sent the company’s shares into negative territory for the year.

Stanley Black & Decker (SWK) shares fell as the tool maker posted worse-than-expected results and narrowed its outlook, citing falling consumer demand and slowing growth in the auto sector.

The company reported third-quarter diluted earnings per share (EPS) of $0.60, with revenue down 5.1% to $3.75 billion. Analysts polled by Visible Alpha were expecting $0.87 billion and $3.80 billion, respectively. . Sales in the Tools & Outdoors division fell 3% to $3.26 billion as volumes fell on a weak backdrop of consumer and do-it-yourself (DIY) products. Sales in the industrial division fell 18% to $488 million due to what the company called “soft auto markets.”

Stanley Black & Decker now forecast adjusted earnings per share in the range of $3.90 to $4.30, up from its previous forecast of $3.70 to $4.50.

The news sent Stanley Black & Decker shares into negative territory for the year, having recently fallen about 8%.

Gross margin rose to 29.9% from 26.8% a year earlier, which Stanley Black & Decker attributed to an improved supply chain.

Chief Financial Officer Patrick Hallinan said the company’s top priorities “continue to drive earnings growth, cash generation and a strengthened balance sheet to enable the company to deliver long-term growth and value creation.”

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