Stanley Black & Decker (SWK) investor relations material

Executive summary

• Q3 net sales were $3.732B, down 1% YoY; organic revenue grew 4%, with 6% volume growth offset by 2% lower pricing and portfolio impacts.

• Adjusted gross margin reached 39.4%, up 780 bps YoY; net tariff refunds contributed ~430 bps, with productivity and mix driving the remainder.

• Adjusted EPS was $2.31 versus GAAP EPS of $1.83; net tariff refunds added ~$0.67 per share to both measures.

• Q3 earnings and margins also benefited from operational improvements; CAM divestiture and outdoor product-line transitions weighed on reported sales.

Financial highlights

• Adjusted EBITDA was $609.1M versus $461.0M YoY; adjusted EBITDA margin was 16.3%, up 400 bps.

• Q3 operating cash flow was $658.5M and free cash flow was $585.0M; nine-month free cash flow was $835.9M versus an outflow of $195.0M.

• IEEPA refunds generated pre-tax gains of $180.7M in Q3 and $298.7M YTD, partly offset by related costs of $48.2M and $131.6M, respectively.

• Q3 net earnings were $272.1M versus $51.4M YoY; diluted EPS was $1.83 versus $0.34.

Outlook and guidance

• FY26 GAAP EPS guidance rose to $5.45–$5.85 from $4.60–$5.45; adjusted EPS guidance rose to $5.95–$6.25 from $5.20–$5.80, implying 31% YoY growth at the midpoint.

• FY26 free cash flow guidance increased to $1.0B–$1.2B from $600M–$800M, incorporating tariff refunds received through Q3 and projected CAM-sale taxes and fees.

• FY26 net sales are expected to be flat, with low-single-digit organic growth; outlook excludes potential Q4 tariff refunds and CAM results after its April 6 sale.

• Q4 sales are forecast at ~$3.6B and adjusted EPS at ~$1.45; adjusted gross margin target is 34%–35%.

• FY26 adjusted gross margin is expected to expand ~350 bps YoY; the 2027 objective is ~35% full-year gross margin, with 150–200 bps YoY improvement targeted.