SWK
IndustrialsStanley Black & Decker
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XBRL · SEC EDGAR2009–2026(18yr)| Metric | FY 2009 | FY 2010 | FY 2011 | FY 2011 | FY 2012 | FY 2013 | FY 2015 | FY 2016 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2021 | FY 2022 | FY 2022 | FY 2023 | FY 2024 | FY 2026Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $4.4B | $3.7B | $8.4B | $10.4B | $10.2B | $11.0B | $11.3B | $11.2B | $11.6B | $13.0B | $14.0B | $14.4B | $14.5B | $15.6B | $16.9B | $15.8B | $15.4B | $15.1B | -1.5% |
| Gross Profit | $1.7B | $1.5B | $2.9B | $3.8B | $3.7B | $3.9B | $4.1B | $4.1B | $4.3B | $4.8B | $4.9B | $4.8B | $5.0B | $5.2B | $4.3B | $3.9B | $4.5B | $4.6B | +1.6% |
| Gross Margin | 37.8% | 40.4% | 35.1% | 36.6% | 36.3% | 35.7% | 36.2% | 36.4% | 36.8% | 36.8% | 34.7% | 33.3% | 34.2% | 33.3% | 25.3% | 24.9% | 29.4% | 30.3% | +0.9pp |
| Operating Income | — | $547.1M | $1.0B | $1.5B | $1.4B | $1.5B | $1.7B | $1.7B | $1.8B | $2.0B | $1.9B | $2.0B | $2.2B | — | — | — | — | — | — |
| Operating Margin | — | 14.6% | 12.2% | 14.3% | 14.1% | 13.4% | 14.9% | 15.7% | 15.9% | 15.5% | 13.5% | 13.8% | 15.0% | — | — | — | — | — | — |
| Net Income | $306.9M | $224.3M | $198.2M | $674.6M | $883.8M | $490.3M | $760.9M | $883.7M | $965.3M | $1.2B | $605.2M | $955.8M | $1.2B | $1.7B | $1.1B | -$310.5M | $294.3M | $401.9M | +36.6% |
| Net Margin | 6.9% | 6.0% | 2.4% | 6.5% | 8.7% | 4.5% | 6.7% | 7.9% | 8.3% | 9.5% | 4.3% | 6.6% | 8.5% | 10.8% | 6.3% | -2.0% | 1.9% | 2.7% | +0.7pp |
| Free Cash Flow | $422.0M | $466.5M | $573.9M | $696.8M | $580.2M | $502.4M | $1.0B | $870.9M | $1.1B | $976.2M | $768.8M | $1.1B | $1.7B | $144.0M | -$2.0B | $852.6M | $753.0M | $687.9M | -8.6% |
| FCF Margin | 9.5% | 12.5% | 6.8% | 6.7% | 5.7% | 4.6% | 8.9% | 7.8% | 9.8% | 7.5% | 5.5% | 7.5% | 11.5% | 0.9% | -11.7% | 5.4% | 4.9% | 4.5% | -0.4pp |
| EPS (Diluted) | $3.84 | $2.79 | $1.32 | $3.97 | $5.30 | $3.09 | $4.76 | $5.79 | $6.51 | $8.04 | $3.99 | $6.35 | $7.77 | $10.16 | $6.76 | $-2.07 | $1.95 | $2.65 | +35.9% |
1. THE BIG PICTURE
Stanley Black & Decker is a brand powerhouse currently trapped in a low-margin recovery phase, trailing its industrial peers across every major efficiency metric. While it has successfully stripped $2.1 billion in costs out of the business, it remains structurally disadvantaged by a heavy debt load and a reliance on retail channels where it must compete against its own customers' private labels.
2. WHERE THE RISKS HIT HARDEST
Stanley Black & Decker’s "reputation for innovation" (10-K Item 1) is threatened by the $10.4 billion in goodwill and intangibles on its balance sheet, which are prone to impairment if market conditions sour, as evidenced by the $108.4 million charge taken in 2025 (Risks). Furthermore, the strategic focus on "activating brands" is undermined by the fact that its two largest customers, accounting for 27% of sales, also produce "house brands" that compete directly with Stanley Black & Decker's core products (10-K Item 1; Risks). Finally, the "Global Cost Reduction Program" is a necessary defense against a supply chain that is highly exposed to Chinese export restrictions on critical materials like rare earth minerals and cobalt (Risks).
3. WHAT THE NUMBERS SAY TOGETHER
Despite the narrative of "driving operational excellence," Stanley Black & Decker’s efficiency metrics are the lowest in its peer group. Its 2.6% operating margin and 0.0% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin stand in stark contrast to peers like ITW (26.3% operating margin) and PNR (22.9% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin). The Q4 2025 results show a concerning 9% volume decline in Tools & Outdoor, which was only partially masked by a 5% price increase (8-K). This suggests that while Stanley Black & Decker can raise prices, it is losing market share or facing a severe cyclical downturn that its "platforming method" has yet to offset. Short interest at 3.9% of the float indicates a moderate level of skepticism from the market regarding the speed of this turnaround (Supplemental Signals).
4. IS IT WORTH IT AT THIS PRICE?
At 11.7x forward earnings, Stanley Black & Decker trades at a significant discount to the peer median of 17.7x. This discount is justified by Stanley Black & Decker's -1.5% revenue growth and its position as the least profitable firm in the cohort (Peer Benchmarking). At this multiple, the market is pricing in approximately 2.3% long-term growth (CAPM analysis). This is a low hurdle, but one Stanley Black & Decker may struggle to clear if retail softness in North America persists or if further asset impairments erode net worth. The 4.4% dividend yield is the highest among its peers, but with a 0.0% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin (XBRL), the sustainability of this payout relies entirely on management achieving its 2026 free cash flow guidance of $700 million to $900 million (8-K).
5. WHAT WOULD CHANGE THIS VIEW?
- Constructive if the Tools & Outdoor segment sees a reversal of the 9% volume decline reported in Q4 2025, signaling that the "Grow the Trades" initiative and new product innovations are gaining traction.
- Cautious if further impairment charges are taken against the $7.3 billion in goodwill, or if net debt ($6.3 billion) continues to rise relative to the peer group (Peer Benchmarking).
6. BOTTOM LINE
Structural Advantage: A massive portfolio of well-known global brands and a $2.1 billion cost-reduction program that provides a floor for earnings recovery. Bottom Line: Stanley Black & Decker is a high-yield turnaround play that remains a fundamental laggard compared to more efficient industrial peers.
1. Top 5 Material Risks
- Supply Chain and Geopolitical Exposure: Stanley Black & Decker imports large quantities of finished goods and raw materials, including rare earth minerals and cobalt, from regions such as China, South Korea, Taiwan, and Israel. Geopolitical tensions or export restrictions—such as China’s 2025 rare earth mineral export limits—can cause production disruptions, product shortages, and increased costs.
- Customer Concentration: Stanley Black & Decker relies heavily on large home centers and mass merchants. In 2025, its two largest customers comprised approximately 27% of consolidated net sales, while U.S. and international mass merchants and home centers collectively accounted for 42%.
- Asset Impairment: As of January 3, 2026, Stanley Black & Decker holds approximately $7.3 billion in goodwill, $2.3 billion in indefinite-lived trade names, and $0.8 billion in net definite-lived intangible assets. These assets are subject to periodic impairment testing, which has resulted in significant pre-tax charges in recent years, including $108.4 million in 2025.
- Global Trade and Tariff Volatility: Substantially all import operations are subject to customs requirements and tariffs, such as those under Section 301 of the Trade Act of 1974. Stanley Black & Decker’s strategy to shift production—such as moving power tool production to Mexico in 2025—can subject it to new tariffs and trade regulation interpretations.
- Debt Covenants: Stanley Black & Decker maintains a $2.25 billion five-year credit facility and a $1.25 billion 364-day credit agreement. These agreements require the maintenance of an interest coverage ratio of not less than 3.50 to 1.00 (or 2.50 to 1.00 through the second fiscal quarter of 2026), and failure to comply could restrict access to liquidity.
2. Company-Specific Risks
- Operational Excellence Execution: Stanley Black & Decker’s core "Operational Excellence" process is intended to drive annual net productivity and maximize customer fill rates; failure to successfully apply these processes to procurement and manufacturing could adversely affect future earnings.
- Pension Funding Obligations: Stanley Black & Decker sponsors defined benefit plans with approximately $1.7 billion in assets as of January 3, 2026. If plan investments underperform, Stanley Black & Decker may be required to make higher cash contributions, reducing funds available for other business purposes.
- Divestiture and Portfolio Volatility: Following efforts to streamline its portfolio to focus on Tools & Outdoor and Engineering Fastening, Stanley Black & Decker may be more vulnerable to market conditions and volatility due to its more focused business mix.
- Technological Adaptation: Stanley Black & Decker must integrate emerging technologies like artificial intelligence, machine learning, and robotics into its business models and products to remain competitive, particularly regarding electrification trends.
3. Regulatory/Legal Risks
- Environmental Liability: Stanley Black & Decker is subject to environmental laws and may be held responsible for remedial investigations and clean-up costs for hazardous substance discharges, including at sites it never owned or operated.
- Product Liability and Recalls: Stanley Black & Decker faces exposure to product liability claims and potential recalls mandated by the Consumer Product Safety Commission or other regulatory bodies, which can increase costs and damage reputation.
- Data Privacy and Governance: Stanley Black & Decker is subject to evolving global laws regarding privacy and data localization, which impose significant compliance costs and potential fines for failures in data management.
- Tax Audits: Stanley Black & Decker is subject to income taxation in numerous jurisdictions; final audit outcomes or changes in global minimum tax rules could materially increase Stanley Black & Decker’s prospective income tax expense.
4. Financial Impact Map
Supply Chain Disruptions → Results of Operations → Increased costs to produce and deliver products and potential inventory write-offs. Customer Concentration → Net Sales → Potential for material revenue decline if major retailers reduce business or adjust inventory levels. Intangible Asset Impairment → Net Income and Net Worth → Non-cash charges resulting from updates to brand prioritization or worsening economic conditions. Tariff and Trade Policy Changes → Cost of Goods Sold → Increased import costs that Stanley Black & Decker may be unable to fully offset through price increases. Debt Covenant Breach → Liquidity → Potential loss of access to committed credit facilities if the interest coverage ratio falls below required thresholds.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 14A | Mar 2026 | — |
| 10-K | Feb 2026 | Jan 2026 |
| 8-K | Feb 2026 | — |
| 10-Q | Nov 2025 | Sep 2025 |