Stanley Black & Decker (SWK) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue was $3.9–$3.95 billion, down 2% year-over-year, impacted by a slow outdoor season and tariff-related disruptions; DEWALT brand showed resilient professional demand and topline growth.

• Announced leadership transition: Chris Nelson to become CEO on October 1, 2025, with Don Allan moving to executive chair.

• Company is in the final year of a multi-year supply chain transformation, targeting operational excellence, cost structure optimization, and sustainable long-term growth.

• $2B Global Cost Reduction Program has generated $1.8B in pre-tax run-rate savings since inception.

• Portfolio streamlining continues, including $2.6B in divestitures and the sale of the Infrastructure business in April 2024.

Financial highlights

• Q2 2025 net sales were $3.9–$3.95B (down 2% year-over-year); organic revenue down 3–4%.

• Adjusted gross margin for Q2 was 27.5%, down year-over-year due to tariffs and lower volume; first half adjusted gross margin was 28.9%.

• Adjusted EBITDA margin for Q2 was 8.1%, down from 10.7% prior year.

• Adjusted EPS was $1.08–$1.80, benefiting from a favorable tax rate; free cash flow was $135 million.

• Net earnings from continuing operations were $101.9M in Q2 2025, compared to a loss of $19.2M in Q2 2024.

Outlook and guidance

• 2025 GAAP EPS guidance: $3.45 (±$0.10); adjusted EPS: ~$4.65.

• 2025 sales projected to be flat to down 1% year-over-year; organic revenue and volume expected to be flat to down 1%.

• Full-year adjusted EBITDA margin expected to expand year-over-year; free cash flow target of ~$600 million.

• Gross annualized tariff impact estimated at $800M, with a $0.65 EPS impact after mitigation.

• Incremental tariff countermeasures and cost actions in the second half of 2025 are expected to support gross margin accretion.