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Manufacturing company Stanley Black & Decker (NYSE:SWK) reported Q1 CY2025 results topping the market’s revenue expectations , but sales fell by 3.2% year on year to $3.74 billion. Its non-GAAP profit of $0.75 per share was 14.5% above analysts’ consensus estimates.

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Stanley Black & Decker (SWK) Q1 CY2025 Highlights:

• Revenue: $3.74 billion vs analyst estimates of $3.68 billion (3.2% year-on-year decline, 1.7% beat)

• Adjusted EPS: $0.75 vs analyst estimates of $0.66 (14.5% beat)

• Adjusted EBITDA: $364.7 million vs analyst estimates of $359.5 million (9.7% margin, 1.4% beat)

• Operating Margin: 6.8%, in line with the same quarter last year

• Free Cash Flow was -$485 million compared to -$496.7 million in the same quarter last year

• Organic Revenue was flat year on year (-1.3% in the same quarter last year)

• Market Capitalization: $11.22 billion

StockStory’s Take

Stanley Black & Decker’s first quarter results reflected ongoing transformation efforts and operational adjustments in response to tariff impacts. Management pointed to organic revenue growth in key segments, gross margin expansion, and disciplined execution as the main factors behind quarterly performance. CEO Don Allan highlighted the company’s focus on supply chain flexibility and the ability to adapt quickly to shifting trade policies, stating, “We have the most flexible supply chain footprint in the industry, as we now have significant hubs in the U.S., Mexico, and Southeast Asia.”

Looking ahead, management’s guidance is shaped by ongoing tariff uncertainties and the pace at which pricing actions and supply chain moves can offset input cost inflation. Allan noted that price increases are necessary to protect margins and cash flow, while cost savings from ongoing transformation initiatives remain a priority. The company is preparing for multiple demand scenarios, emphasizing agility and further investments in innovation to maintain competitiveness amid evolving trade dynamics.

Key Insights from Management’s Remarks

Stanley Black & Decker’s leadership discussed how tariff pressures, supply chain repositioning, and disciplined pricing actions influenced Q1 performance and strategy for the remainder of the year.

• Tariff Mitigation Strategy: Management is prioritizing supply chain shifts out of China and into North America and Southeast Asia to minimize exposure to U.S. tariffs. This process is expected to take 12 to 24 months, with an aim to reduce the share of China-sourced goods for the U.S. market from 15% to near zero.

• Pricing Actions: The company implemented high single-digit price increases in April across U.S. retail partners to counteract tariff-driven cost increases. Further price hikes are likely if tariffs remain elevated, with ongoing discussions taking place with channel partners.

• Innovation and Product Launches: Stanley Black & Decker highlighted new launches such as the DEWALT Construction Jack and TOUGHSYSTEM 2.0 DXL Modular Workstation System, as well as the DEWALT TOUGHWIRE cable hanger system, designed to address specific professional end-user needs.

• Cost Savings and Efficiency: The company is on track to deliver $2 billion in cumulative cost savings by the end of 2025, with $1.7 billion already achieved. These savings are primarily driven by supply chain efficiencies and SG&A (selling, general & administrative) discipline.

• Segment and Regional Trends: The Tools & Outdoor segment saw organic growth led by outdoor and professional products, while the Engineered Fastening segment faced headwinds from automotive market softness offset by aerospace growth. North American demand remained stable, with improved performance in March and April.