Stanley Black & Decker Delivers Solid Q2 Performance with Strong Organic Growth and Margin Expansion
Stanley Black & Decker has reported a solid second quarter performance, driven by disciplined execution of its strategy and profitable organic growth. The company's revenue for the quarter was in line with prior year and up 3% organically, beating expectations.
In his opening remarks, President and CEO Chris Nelson highlighted the company's confidence in its strategy and its team's ability to continue executing and delivering results. Total revenue for the second quarter was $3.6 billion, with organic revenue also up 3%, comprising 3% volume growth from strong demand generation and flat pricing versus the prior year.
The company's adjusted gross margin rate of 33.7% was a significant improvement over last year, largely supported by gross productivity and product mix. Additionally, Stanley Black & Decker received tariff refunds during the second quarter, which contributed to its adjusted gross margins, providing a benefit of approximately 250 basis points.
Adjusted EBITDA margin of 11.3% was up 320 basis points year-over-year, slightly ahead of planning assumptions for the period. Adjusted earnings per share were $1.57, $0.37 above the midpoint of guidance range, with below-the-line items contributing about $0.20 and net tariff refunds contributing about $0.17.
On a segment basis, tools and outdoor revenue was approximately $3.6 billion, up 3% year-over-year, with organic revenue also up 3%. The company saw strong demand generation and flat pricing versus the prior year, driven by its three global priority brands, DEWALT, STANLEY, and CRAFTSMAN.
Stanley Black & Decker's operating cash flow was strong, allowing it to deploy proceeds from the sale of its aerospace fasteners business early in the quarter to pay down debt by $1.7 billion and buy back 3.2 million shares for $250 million. The company continues to advance its strategy with a focused portfolio, balance sheet strength, and thoughtful approach to capital allocation.
Its priorities remain to invest in growth, support the dividend, repurchase shares, and pursue M&A if and when appropriate. With these initiatives underway, Stanley Black & Decker is well-positioned for future success and continued execution of its strategy.
The company's results were driven by a number of factors, including strong demand generation and flat pricing across its global priority brands. Its ability to execute on its strategy and deliver profitable organic growth has been particularly notable, demonstrating the company's commitment to creating long-term value for shareholders.
As Stanley Black & Decker looks ahead to the remainder of 2026, it is confident in its ability to continue executing on its strategy and delivering strong results. The company's focus on driving growth, improving margins, and investing in its business positions it well for future success.
