Stanley Black & Decker reported first‑quarter 2026 results that exceeded expectations, with net sales of $3.85 billion, up 3 % year‑over‑year, and an adjusted earnings per share of $0.80, beating the consensus estimate of $0.59–$0.61. Adjusted gross margin fell to 30.2 % from 31.6 % in Q3 2025, while adjusted EBITDA margin slipped to 9.2 % from 9.7 % in the prior quarter. The earnings beat was driven by disciplined cost control and a favorable mix shift toward higher‑margin Engineered Fastening products, which offset volume declines in legacy segments.
The Engineered Fastening segment posted sales that rose 10 % year‑over‑year and 7 % organically, and its adjusted margin climbed 190 basis points to 12.0 %. Tools & Outdoor revenue increased 2 % to $3.34 billion, but organic revenue fell 1 %, reflecting a mix shift toward lower‑margin consumer products. The strong performance in Engineered Fastening helped lift overall profitability despite headwinds in other areas.
Margin compression in the quarter was largely attributable to higher pricing and currency gains that were partially offset by volume declines and increased tariff expenses. The company’s cost‑reduction program continued to deliver, but the mix shift toward lower‑margin products and the impact of U.S. and international tariffs on raw‑material costs contributed to the 20‑basis‑point decline in gross margin and the 50‑basis‑point drop in EBITDA margin.
Management raised its full‑year 2026 guidance, projecting GAAP earnings per share in the range of $4.15 to $5.35 and adjusted EPS between $4.90 and $5.70—an increase of 79 % and 13 % at the midpoint compared to the prior year. The company reaffirmed its target for a 35 %+ adjusted gross margin by Q4 2026 and reiterated a $600 million free‑cash‑flow goal for 2026, signaling confidence in its cost‑reduction program and the ability to sustain margin expansion amid macroeconomic headwinds.
The quarter also marked the completion of the sale of the Consolidated Aerospace Manufacturing (CAM) business to Howmet Aerospace on April 6 2026, generating approximately $1.8 billion in cash and about $1.6 billion in net proceeds that were used to reduce debt and fund future capital allocation. The divestiture is part of the company’s broader strategy to sharpen its focus on the Tools & Outdoor and Engineered Fastening businesses, positioning the company for long‑term growth and shareholder value creation.
"Stanley Black & Decker entered 2026 with unwavering commitment to our strategic priorities, and we delivered stronger than planned first quarter results through disciplined execution. Our team's focus and resilience ensured that sales, gross margin, and cash1 performance remain firmly on track with our full year plan. I am proud of our team for maintaining their customer‑centric approach and for advancing our vision to build a world‑class branded industrial company." – Chris Nelson, President & CEO
"We are confident in our strategy and in the team's ability to continue to execute and deliver results." – Chris Nelson, President & CEO
"The successful sale of CAM further focuses our portfolio on our core businesses." – Chris Nelson, President & CEO
"We made solid progress in the first quarter to deliver sales, margin and cash1 in line with our full year plan. We achieved this progress, despite ongoing macroeconomic challenges, driven by the commitment of our teams around the world." – Patrick Hallinan, EVP, Chief Financial Officer & Chief Administrative Officer
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