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Why Is Stanley Black & Decker (SWK) Up 3.9% Since Last Earnings Report?
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It has been about a month since the last earnings report for Stanley Black & Decker (SWK - Free Report) . Shares have added about 3.9% in that time frame, underperforming 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? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Stanley Black & Decker, Inc. before we dive into how investors and analysts have reacted as of late.
Stanley Black Beats Q2 Earnings Estimates on Margin Expansion, Raises Outlook
Stanley Black reported adjusted earnings of $1.57 per share for the second quarter of 2026, which beat the Zacks Consensus Estimate of $1.20 by 30.8%. The bottom line increased from adjusted earnings of $1.08 per share reported in the year-ago quarter.
Net sales of $3.96 billion surpassed the consensus estimate of $3.93 billion by 0.7% and increased 0.4% year over year. Higher organic sales, improved gross margins and strong cash generation supported the quarter, while the company also raised its full-year earnings and free cash flow guidance.
Segmental Performance
Stanley Black generated Tools & Outdoor revenues of $3.56 billion, up 3% year over year, driven by higher volumes in U.S. retail and commercial & industrial channels. Organic revenues for the segment also increased 3%, aided by strength in power tools despite the transition to a licensing model for gas walk-behind outdoor products.
Engineered Fastening revenues declined 18% year over year to $396.4 million due to the divestiture of the Consolidated Aerospace Manufacturing (CAM) business. Excluding the divestiture impact, organic revenues increased 3%, supported by industrial demand and continued automotive fastener growth.
Stanley Black's Margin Strength
Stanley Black's cost of sales declined 7.8% year over year to $2.65 billion. Gross profit increased 22.4% to $1.31 billion, lifting the gross margin by 600 basis points to 33.0%. On an adjusted basis, gross margin expanded 620 basis points to 33.7%, benefiting from tariff refunds and productivity improvements.
Selling, general and administrative expenses increased 8.6% year over year to $947.9 million and represented 23.9% of sales compared with 22.1% a year ago. Adjusted EBITDA was $445.7 million, indicating a year-over-year increase of 40.1%. The adjusted EBITDA margin improved 320 basis points to 11.3%, while net earnings rose sharply to $351.3 million from $101.9 million in the prior-year quarter.
Cash Flow and Balance Sheet
Stanley Black ended the quarter with cash and cash equivalents of $592.4 million compared with $280.1 million at the end of 2025. Long-term debt was $4.70 billion, largely unchanged from the figure reported at the end of 2025. The company reduced total debt by $1.7 billion during the quarter using proceeds from the CAM divestiture.
Cash provided by operating activities totaled $763.1 million compared with $214.3 million in the year-ago quarter. Capital and software expenditures were $64.9 million, resulting in free cash flow of $698.2 million compared with $134.7 million in the year-ago quarter. During the quarter, the company repurchased approximately $250 million of shares and paid dividends of $124.3 million.
Stanley Black Raises 2026 Outlook
Management raised its 2026 GAAP earnings guidance to $4.60-$5.45 per share from the prior range of $4.15-$5.35. Adjusted earnings are now projected in the range of $5.20-$5.80 per share, up from the earlier outlook of $4.90-$5.70.
The company also increased its free cash flow forecast to $600-$800 million from the previous expectation of $500-$700 million. Management said the revised guidance reflects the benefit from tariff refunds realized in the second quarter as well as taxes and fees associated with the CAM divestiture.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -7.76% due to these changes.
VGM Scores
At this time, Stanley Black & Decker has a strong 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 second quintile 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. Notably, Stanley Black & Decker has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
View the Zacks #1 Rank List
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Why Is Stanley Black & Decker (SWK) Up 3.9% Since Last Earnings Report?
It has been about a month since the last earnings report for Stanley Black & Decker (SWK - Free Report) . Shares have added about 3.9% in that time frame, underperforming 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? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Stanley Black & Decker, Inc. before we dive into how investors and analysts have reacted as of late.
Stanley Black Beats Q2 Earnings Estimates on Margin Expansion, Raises Outlook
Stanley Black reported adjusted earnings of $1.57 per share for the second quarter of 2026, which beat the Zacks Consensus Estimate of $1.20 by 30.8%. The bottom line increased from adjusted earnings of $1.08 per share reported in the year-ago quarter.
Net sales of $3.96 billion surpassed the consensus estimate of $3.93 billion by 0.7% and increased 0.4% year over year. Higher organic sales, improved gross margins and strong cash generation supported the quarter, while the company also raised its full-year earnings and free cash flow guidance.
Segmental Performance
Stanley Black generated Tools & Outdoor revenues of $3.56 billion, up 3% year over year, driven by higher volumes in U.S. retail and commercial & industrial channels. Organic revenues for the segment also increased 3%, aided by strength in power tools despite the transition to a licensing model for gas walk-behind outdoor products.
Engineered Fastening revenues declined 18% year over year to $396.4 million due to the divestiture of the Consolidated Aerospace Manufacturing (CAM) business. Excluding the divestiture impact, organic revenues increased 3%, supported by industrial demand and continued automotive fastener growth.
Stanley Black's Margin Strength
Stanley Black's cost of sales declined 7.8% year over year to $2.65 billion. Gross profit increased 22.4% to $1.31 billion, lifting the gross margin by 600 basis points to 33.0%. On an adjusted basis, gross margin expanded 620 basis points to 33.7%, benefiting from tariff refunds and productivity improvements.
Selling, general and administrative expenses increased 8.6% year over year to $947.9 million and represented 23.9% of sales compared with 22.1% a year ago. Adjusted EBITDA was $445.7 million, indicating a year-over-year increase of 40.1%. The adjusted EBITDA margin improved 320 basis points to 11.3%, while net earnings rose sharply to $351.3 million from $101.9 million in the prior-year quarter.
Cash Flow and Balance Sheet
Stanley Black ended the quarter with cash and cash equivalents of $592.4 million compared with $280.1 million at the end of 2025. Long-term debt was $4.70 billion, largely unchanged from the figure reported at the end of 2025. The company reduced total debt by $1.7 billion during the quarter using proceeds from the CAM divestiture.
Cash provided by operating activities totaled $763.1 million compared with $214.3 million in the year-ago quarter. Capital and software expenditures were $64.9 million, resulting in free cash flow of $698.2 million compared with $134.7 million in the year-ago quarter. During the quarter, the company repurchased approximately $250 million of shares and paid dividends of $124.3 million.
Stanley Black Raises 2026 Outlook
Management raised its 2026 GAAP earnings guidance to $4.60-$5.45 per share from the prior range of $4.15-$5.35. Adjusted earnings are now projected in the range of $5.20-$5.80 per share, up from the earlier outlook of $4.90-$5.70.
The company also increased its free cash flow forecast to $600-$800 million from the previous expectation of $500-$700 million. Management said the revised guidance reflects the benefit from tariff refunds realized in the second quarter as well as taxes and fees associated with the CAM divestiture.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -7.76% due to these changes.
VGM Scores
At this time, Stanley Black & Decker has a strong 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 second quintile 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. Notably, Stanley Black & Decker has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.