Stanley Black & Decker, Inc.

Second-quarter revenue was in line with last year and organic revenue grew 3%. Adjusted gross margin was 33.7%, up 620 basis points year over year, and adjusted EBITDA margin was 11.3%, up 320 basis points. Adjusted EPS was $1.57, which was $0.37 above the midpoint of guidance. Tools & Outdoor revenue was about $3.6 billion, up 3% year over year, with 3% organic growth; Engineered Fastening revenue fell 18% because the aerospace fasteners divestiture reduced revenue by 21%, though organic revenue rose 3%. For 2026, management raised adjusted EPS to $5.20 to $5.80, expects total revenue to be about flat with organic revenue up low single digits, and reiterated full-year adjusted gross margin expansion of about 150 bps before tariff refunds. They lifted free cash flow guidance to $600 million to $800 million, or $800 million to $1 billion excluding CAM-related taxes and fees. For 3Q, they guided to sales of about $3.7 billion and adjusted EPS of $1.50 to $1.60.

Chris Nelson framed the quarter as proof that the company’s strategy is working: disciplined execution, stronger brand activation, and profitable organic growth. He highlighted broad-based momentum in DEWALT, STANLEY, and CRAFTSMAN, especially in U.S. retail and the commercial and industrial channel, and said the business is on track for full-year sales and margin targets. He also emphasized a more focused portfolio, faster innovation, and capital allocation discipline, including debt reduction, share repurchases, dividends, and selective M&A.

Patrick Hallinan said the EPS beat was driven mainly by below-the-line items and tariff refunds, with roughly $0.20 from below-the-line factors and about $0.17 from net tariff refund benefit in the quarter. He noted the tax benefit was timing-related and kept the full-year adjusted tax rate at 19%, while interest expense fell due to stronger cash flow and lower debt after the CAM sale. On guidance, he said the company expects about $0.15 of the EPS raise to come from below-the-line items, about $0.05 from tariff refunds, full-year interest expense of about $255 million, other net of about $230 million, and free cash flow of $600 million to $800 million including CAM taxes and fees. He also said net debt to adjusted EBITDA should be around 2.5x by year-end and that the company still expects about $200 million of working capital reduction for 2026.

Analysts focused on the strength in power tools, the sustainability of promotion-driven volume, tariff refunds, and how quickly the company is ramping SG&A investment. Management said the 8% power tools growth reflected stronger channel placement, better product pipeline execution, and more targeted promotions, but they did not quantify the exact promotional lift. On tariffs, management said most second-half refund-related benefits will be reinvested into growth, with any additional refunds too uncertain to include in guidance. Questions on STANLEY and CRAFTSMAN progress, Engineered Fastening end markets, and working capital were answered with comments that both brands are improving, industrial strength is showing in autos, solar, and data centers, and working capital still targets about $200 million of reduction.