Stanley Black & Decker, Inc.

Second-quarter reported revenue was in line with prior year, while organic revenue increased 3%. Adjusted gross margin was 33.7%, up 620 basis points year over year, adjusted EBITDA margin was 11.3%, up 320 basis points, and 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 organic revenue also up 3%; Engineered Fastening revenue fell 18% due to the Aerospace Fasteners divestiture, but organic revenue grew 3%. For 2026, the company raised adjusted EPS guidance to $5.20 to $5.80, expects total company revenue to be about flat with organic revenue up low single digits, forecasts full-year adjusted gross margin expansion of about 150 basis points excluding tariff refund benefit, and sees free cash flow of $600 million to $800 million, or $800 million to $1 billion excluding taxes and fees tied to the CAM divestiture. For Q3, management guided to net sales of about $3.7 billion and adjusted EPS of approximately $1.50 to $1.60.

Chris Nelson framed the quarter as evidence that the company’s strategy is working, emphasizing profitable organic growth, better execution, and stronger brand activation across DEWALT, STANLEY and CRAFTSMAN. He pointed to continued investment in the U.S. commercial and industrial channel, product innovation, and field presence as drivers of momentum, and said the company is on track for its full-year sales and margin targets. His tone was confident and constructive, with repeated emphasis on disciplined execution and long-term portfolio focus.

Patrick Hallinan focused on how tariff refunds, lower interest expense and cash generation flowed through the quarter and the updated outlook. He said the quarter’s EPS outperformance included about $0.20 from below-the-line items and a net tariff refund benefit, with the tax benefit being timing-related and the full-year adjusted tax rate still expected at 19%. He raised 2026 EPS to $5.20 to $5.80, noted roughly $0.15 of the increase comes from lower interest expense and share repurchases, and said full-year interest expense is now expected to be about $255 million. He also said free cash flow for the first half was about $250 million, full-year working-capital reduction is still targeted at $200 million, and net debt to adjusted EBITDA is expected to be around 2.5x by year-end.

Analysts probed the strength of power tools, the role of promotions, and whether tariff refunds were accelerating investment spending. Management said the 8% power tools growth reflected multi-year brand, product and channel work coming together, plus more effective promotions and better placement with channel partners, rather than a one-time catch-up. On tariffs, management said the assumed inflation headwind from battery metals, tungsten, oil and oil derivatives is roughly offsetting the tariff tailwind this year, and that additional second-half tariff refunds are too uncertain to include in guidance. Management also said the SG&A pickup reflects deliberate reinvestment into go-to-market, social media, trade specialists and product development, with some 2027 investment being pulled into 2026.