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SWK
FY2026 Q1
Improving
Stanley Black & Decker, Inc. earnings call
Buzzberg read
Adjusted EPS guidance maintained despite tariff and inflation offsets
SWK delivered a strong Q1 with EPS 20 cents above the high end of guidance, driven by a well-executed outdoor preseason and lower tax rate. Management maintained full-year EPS guidance while crediting a temporary tariff tailwind that is offset by new inflationary pressures. Q1 EPS of $0.80 beat the high-end of guidance by $0.20, with half of the beat from operating outperformance in Outdoor and half from below-the-line timing items.
Buzzberg read Adjusted EPS guidance maintained despite tariff and inflation offsets SWK delivered a strong Q1 with EPS 20 cents above the high end of guidance, driven by a well-executed outdoor preseason and lower tax rate. Management maintained full-year EPS guidance while crediting a temporary tariff tailwind that is offset by new inflationary pressures. Q1 EPS of $0.80 beat the high-end of guidance by $0.20, with half of the beat from operating outperformance in Outdoor and half from below-the-line timing items. Read full analysisCollapse analysis
SWK delivered a strong Q1 with EPS 20 cents above the high end of guidance, driven by a well-executed outdoor preseason and lower tax rate. Management maintained full-year EPS guidance while crediting a temporary tariff tailwind that is offset by new inflationary pressures. Q1 EPS of $0.80 beat the high-end of guidance by $0.20, with half of the beat from operating outperformance in Outdoor and half from below-the-line timing items.
- Full-year 2026 EPS guidance maintained at $4.90-$5.70, with reported revenue expected to be flat due to the divestiture of CAM.
- Tariff policy changes, including the move from IEPA to Section 122 tariffs, are expected to be a net tailwind compared to prior assumptions, but this is roughly offset by new inflation from battery metals, tungsten, and the Middle East conflict.
- Gross margin trajectory is expected to improve significantly in the second half of the year, with management confirming it can see the Q3 2026 gross margin rate in its balance sheet already.
TOOLS_AND_OUTDOOR Revenue$3.3BReported
Revenue$3.8464B+4% QoQ
EPS$0.80-43% QoQ
Gross margin30.09%Reported
6 grounded callouts
What matters now
The highest-signal changes from the call.
Tariffs
Tariff changes are a net tailwind, offset by inflation
Balance Sheet
CAM divestiture proceeds used to reduce debt
Show 3 more callouts
Capital Allocation
Capital allocation biased toward share repurchases
Demand
Professional channel growth confirms strategy traction
Margins
Adjusted gross margin 35% targeted by Q4 2026
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| TOOLS_AND_OUTDOOR Revenue | $3.3B | Reported |
| Revenue | $3.8464B | +4% QoQ |
| EPS | $0.80 | -43% QoQ |
| Gross margin | 30.09% | Reported |
| Operating margin | 6.02% | Reported |
| Free cash flow | $-0.4473B | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| EPS | FY2026 | $4.90–$5.70 | $5.30 | Maintained |
| Free cash flow | FY2026 | $0.5B–$0.7B | $0.6B | Guided |
| Revenue | FY2026 | $3.9B | $3.9B | Guided |
AI, capex & demand read
Management read
Measured
Management acknowledged a challenging environment but emphasized execution, progress on strategic initiatives, and reiterated guidance with confidence.
External signals
Supply-chain alpha · 3returns since call
Management expects new Section 301 tariffs to be introduced at the same level as the old IEPA tariffs, meaning underlying tariff costs would be virtually the same by August as they were prior to the Supreme Court ruling in February.
Evidence
“Our base case assumption is that new Section 301 tariffs will be introduced at the same level as the old IEPA tariffs, which means our underlying tariff costs would be virtually the same by August as they were prior to the Supreme Court ru…”
Management sees a massive step-up in gross margin from the first half to the second half of the year, with 40% of the delta from net productivity benefits and another similar amount from adjusting the fixed cost structure to the current volume environment.
Evidence
“you're talking about really three big factors that go beyond the normal seasonality of outdoor or the cam issue that you mentioned, because these are really the ones that are going to sustain it and drive it long term”
Management affirmed that the 232 tariff changes only translate to an incremental headwind of $15 million on an annualized basis, or less than $10 million in 2026, despite market speculation about outsized exposure.
Evidence
“we assessed the incremental headwind to be just $15 million on an annualized basis and less than $10 million for 2026”
Methodology & coverage
Management-only analysis. All 0 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.