Stanley Black & Decker (SWK) Q4 2025 earnings summary

Executive summary

• Full-year 2025 revenue was $15.1 billion, with DeWalt and Aerospace Fasteners showing growth, but overall organic revenue declined 1% year-over-year.

• Adjusted gross margin expanded to 30.7% for 2025, driven by pricing, tariff mitigation, and supply chain efficiencies.

• Adjusted EBITDA grew to $1.6 billion (10.8% margin), and adjusted EPS rose 7% to $4.67; free cash flow was $688 million.

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

• Continued strategic investments in brand building and innovation to drive sustainable, profitable growth.

Financial highlights

• Fourth quarter revenue was $3.7 billion, down 1% year-over-year; organic revenue declined 3% as price and currency gains were offset by a 7% volume decline.

• Q4 adjusted gross margin was 33.3%, up 210 basis points year-over-year; adjusted EBITDA margin rose 330 basis points to 13.5%.

• Q4 free cash flow was $883 million; full-year free cash flow totaled $688 million, surpassing the $600 million target.

• Debt reduced by $240 million in 2025; $500 million returned to shareholders via dividends.

• Year-end leverage ratio improved to 3.4x net debt to adjusted EBITDA, down from 5.9x two years prior.

Outlook and guidance

• 2026 adjusted EPS expected between $4.90-$5.70, up 13% at midpoint; free cash flow targeted at $700-$900 million.

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

• Adjusted gross margin expected to expand by 150 basis points in 2026; SG&A to remain around 22% of sales.

• CAM divestiture expected in 2H 2026, with proceeds to further reduce debt leverage.

• First quarter 2026 net sales expected to be ~$3.7 billion, down 1% year-over-year; Q1 adjusted EPS $0.55-$0.60.