A month has gone by since the last earnings report for Stanley Black & Decker (SWK Quick QuoteSWK - Free Report) . Shares have added about 11.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Stanley Black & Decker due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Stanley Black's Q2 Earnings Beat Estimates, Revenues Down Y/Y

Stanley Black reported second-quarter 2025 adjusted earnings of $1.08 per share, which beat the Zacks Consensus Estimate of 38 cents. The bottom line inched down 0.9% year over year.

Stanley Black’s net sales of $3.95 billion missed the consensus estimate of $3.99 billion. The top line declined 2% year over year due to weakness in both segments.

Stanley Black’s Segmental Discussion

Effective from the first quarter of 2025, the company has renamed the Industrial segment as the Engineered Fastening segment. It had no impact on the company's consolidated financial statements or segment results.

Revenues from the company’s primary segment, Tools & Outdoor, totaled $3.46 billion, which decreased 1.9% year over year.

Revenues from the Engineered Fastening segment grossed $483.8 million, down 2.4% year over year.

Margin Profile

Stanley Black’s cost of sales inched down 0.2% year over year to $2.88 billion. The gross profit decreased 6.5% year over year to $1.07 billion. The gross margin decreased 140 basis points (bps) year over year to 27%.

Selling, general and administrative expenses increased 5.4% year over year to $873.1 million. Adjusted EBITDA was $318.2 million, indicating a year-over-year decline of 25.9%. The margin decreased 260 bps to 8.1%.

Balance Sheet and Cash Flow

While exiting the second quarter, Stanley Black had cash and cash equivalents of $311.8 million compared with $290.5 million at the end of fourth-quarter 2024. The long-term debt balance was $4.76 billion, lower than $5.6 billion reported at the end of fourth-quarter 2024.

In the first six months of 2025, net cash used in operating activities was $205.7 million against $142 million generated in the year-ago period. Capital and software expenditures totaled $144.6 million, down from $152.9 million reported in the year-ago period. Free cash flow (before dividends) was a negative $350.3 million compared with $10.9 million a year ago.

In the first six months, Stanley Black paid out dividends worth $248.5 million to its shareholders, up 2% from the year-ago period.

2025 Guidance

Stanley Black expects total revenues to be in the range of (1%)-flat on a year-over-year basis. The company anticipates earnings to be $3.45 (+/- $0.10) per share compared with $3.30 (+/- $0.15) expected earlier. Adjusted earnings are projected to be $4.65 per share. The company targets to generate annual free cash flow (non-GAAP) of approximately $600 million.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -29.17% due to these changes.

VGM Scores

At this time, Stanley Black & Decker has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock has a score of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Stanley Black & Decker has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.