Stanley Black & Decker (SWK) Q4 2025 earnings summary

Executive summary

• Full-year 2025 net sales were $15.1 billion, down 1% organically, with DeWalt and Aerospace Fasteners showing notable growth.

• Adjusted gross margin expanded to 30.7% for the year and 33.3% in Q4, driven by pricing, tariff mitigation, and supply chain efficiencies.

• Adjusted EBITDA grew 5% to $1.6 billion, and adjusted EPS increased 7% to $4.67 in 2025.

• Free cash flow for the year was $688 million, supporting dividends, debt reduction, and growth investments.

• Announced sale of Aerospace Fasteners and CAM businesses, with proceeds earmarked for debt reduction.

Financial highlights

• Fourth quarter net sales were $3.7 billion, down 1% year-over-year; organic revenue declined 3% as price rose 4%, currency 2%, and volume fell 7%.

• Q4 adjusted gross margin was 33.3%, up 210 basis points year-over-year.

• Q4 adjusted EBITDA margin rose 330 basis points to 13.5%.

• Q4 adjusted EPS was $1.41; free cash flow exceeded $880 million.

• Global cost reduction program achieved $2.1 billion in run rate pre-tax savings since mid-2022.

Outlook and guidance

• 2026 adjusted EPS expected at $4.90–$5.70; GAAP EPS guidance $3.15–$4.35.

• Free cash flow targeted at $700–$900 million for 2026, reflecting a 16% increase at midpoint.

• Revenue projected to grow low single digits year-over-year, with organic growth similar.

• Adjusted gross margin expected to expand by 150 basis points in 2026.

• Long-term targets for 2028: mid-single-digit sales growth, 35–37% adjusted gross margin, mid- to high-teens EBITDA margin.