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Stanley Black (SWK) Grapples With Supply-Chain & Cost Woes
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Stanley Black & Decker (SWK - Free Report) is seeing lower volumes in its Tools & Outdoor segment due to reduced consumer spending as a result of an increase in interest rates and a spike in fuel prices. Reduced retail and consumer demand are weighing on the Tools & Outdoor segment’s performance. The company expects Tools & Outdoor organic revenues to decline mid-to-high single digits in 2022. Margins are expected to decrease year over year in the current year.
Stanley Black has operations in multiple nations. Such business diversifications expose it to risks from unfavorable movements in foreign currencies, geopolitical issues and other headwinds. In second-quarter 2022, foreign currency translation had a negative impact of 2% on sales.
Stanley Black has been struggling with supply chain disruptions and logistics cost inflation. Escalating cost of sales (due to raw material cost inflation) and selling, general and administrative expenses pose a threat to the company’s bottom line. In the first half of 2022, cost of sales jumped 32.7% year over year while selling, general and administrative expenses climbed 23%.
The prevalent supply chain disruptions and raw material cost inflation are also weighing on the operations of industrial companies like Zebra Technologies (ZBRA - Free Report) and A. O. Smith Corporation (AOS - Free Report) .
Extended lead times and component shortages due to supply-chain disruptions are hurting Zebra Technologies’ top line. Supply-chain constraints are impacting sales from North America.
High freight costs are added concerns for Zebra Technologies. Escalating operating expenses pose a threat to ZBRA’s bottom line. In the first half of 2022, operating expenses jumped 56.8% year over year, primarily due to increase in the cost of sales.
Over time, A. O. Smith has been dealing with the adverse impacts of high cost of sales due to high raw material and transportation costs. In the first half of 2022, cost of sales increased 24.4% year over year.
A. O. Smith’s selling, general and administrative expenses rose 2% year over year in the first half of 2022. Escalating costs are hurting the company’s bottom line. Apart from supply-chain constraints, labor shortages are a major concern for the company.
Coming back to Stanley Black, despite headwinds, the company is poised to benefit from strength in its industrial business owing to strong backlogs and healthy demand for aerospace fasteners. Successive divestments of non-core assets should help the company focus on its core areas of business growth. SWK’s commitment to reward its shareholders through dividend payments and share buybacks is encouraging.
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Stanley Black (SWK) Grapples With Supply-Chain & Cost Woes
Stanley Black & Decker (SWK - Free Report) is seeing lower volumes in its Tools & Outdoor segment due to reduced consumer spending as a result of an increase in interest rates and a spike in fuel prices. Reduced retail and consumer demand are weighing on the Tools & Outdoor segment’s performance. The company expects Tools & Outdoor organic revenues to decline mid-to-high single digits in 2022. Margins are expected to decrease year over year in the current year.
Stanley Black has operations in multiple nations. Such business diversifications expose it to risks from unfavorable movements in foreign currencies, geopolitical issues and other headwinds. In second-quarter 2022, foreign currency translation had a negative impact of 2% on sales.
Stanley Black has been struggling with supply chain disruptions and logistics cost inflation. Escalating cost of sales (due to raw material cost inflation) and selling, general and administrative expenses pose a threat to the company’s bottom line. In the first half of 2022, cost of sales jumped 32.7% year over year while selling, general and administrative expenses climbed 23%.
The prevalent supply chain disruptions and raw material cost inflation are also weighing on the operations of industrial companies like Zebra Technologies (ZBRA - Free Report) and A. O. Smith Corporation (AOS - Free Report) .
Extended lead times and component shortages due to supply-chain disruptions are hurting Zebra Technologies’ top line. Supply-chain constraints are impacting sales from North America.
High freight costs are added concerns for Zebra Technologies. Escalating operating expenses pose a threat to ZBRA’s bottom line. In the first half of 2022, operating expenses jumped 56.8% year over year, primarily due to increase in the cost of sales.
Over time, A. O. Smith has been dealing with the adverse impacts of high cost of sales due to high raw material and transportation costs. In the first half of 2022, cost of sales increased 24.4% year over year.
A. O. Smith’s selling, general and administrative expenses rose 2% year over year in the first half of 2022. Escalating costs are hurting the company’s bottom line. Apart from supply-chain constraints, labor shortages are a major concern for the company.
Coming back to Stanley Black, despite headwinds, the company is poised to benefit from strength in its industrial business owing to strong backlogs and healthy demand for aerospace fasteners. Successive divestments of non-core assets should help the company focus on its core areas of business growth. SWK’s commitment to reward its shareholders through dividend payments and share buybacks is encouraging.