NEW BRITAIN – November 04, 2026 -- Stanley Black & Decker raised its 2026 adjusted EPS guidance to $5.95-$6.25 from $5.20-$5.80 after third-quarter results that included roughly $0.67 per share from net tariff refunds. Free cash flow guidance rose to $1.0 billion-$1.2 billion from $600 million-$800 million.
Tariff refunds add 430 basis points to gross margin
Net sales were $3.7 billion, down 1% in total and up 4% organically. Volume rose 6%, while pricing cut 2% and portfolio changes cut 4%. Currency was flat.
Gross margin reached 39.0%, up 760 basis points, and adjusted gross margin was 39.4%, up 780 basis points. Net tariff refunds contributed about 430 basis points to both measures. GAAP EPS was $1.83 and adjusted EPS was $2.31.
SG&A rose to 24.2% of sales, up 310 basis points on a GAAP basis and 320 basis points adjusted, partly from costs and investments tied to the refunds. Adjusted EBITDA margin was 16.3%, up 400 basis points.
Tools & Outdoor organic sales climb 4% on North American strength
Segment sales rose 2%. Volume gained 7%, pricing cut 3%, and the transition to a licensing model for gas walk-behind outdoor products cut 2%. Power tools and U.S. retail and commercial & industrial channels drove the organic gain.
North America grew 6% organically (3% in total). Europe rose 1% organically but fell 1% in total. Rest of World fell 1% organically but rose 2% in total.
Segment margin was 17.0%, up 520 basis points, and adjusted segment margin was 17.6%, up 560 basis points. Tariff refunds accounted for about 430 basis points of the segment margin gain. The company also cited net productivity gains and favorable product mix.
Engineered Fastening sales fall 21% after CAM divestiture
The CAM divestiture cut sales by 22 points, partly offset by 1% volume and 1% pricing gains. Organic revenue rose 2%, led by broad-based industrial strength, while automotive results came in below expectations.
Segment margin was 11.7%, down 20 basis points. Adjusted segment margin was also 11.7%, down 110 basis points, which the company attributed to automotive demand pressure.
Board authorizes $1 billion buyback after $250 million quarterly repurchase
The company bought back about 2.5 million shares for roughly $250 million in the quarter, exhausting the $500 million authorization approved in April 2026. On October 29, the board approved a new authorization of up to $1 billion, expiring October 29, 2029.
Operating cash flow was $659 million and free cash flow was $585 million. CEO Chris Nelson said the 4% organic growth shows brand activation and innovation efforts are yielding results.
GAAP EPS guidance jumps to $5.45-$5.85
The GAAP EPS range moves up from $4.60-$5.45. At the midpoints, GAAP and adjusted EPS imply year-over-year growth of 113% and 31%, respectively. The gap between the two ranges is about $0.40-$0.50, mainly footprint and other cost-action charges, partly offset by the gain on the CAM sale.
The free cash flow outlook incorporates tariff refunds realized year to date and projected taxes and fees tied to the CAM divestiture.
Third-quarter pre-tax non-GAAP adjustments totaled $89.3 million. They included $29.5 million of restructuring charges, a $19.7 million asset impairment and a $20.4 million loss on the sale of a small Engineered Fastening business.
Debra Crew became independent board chair on October 1, following the retirement of Executive Chair Donald Allan, Jr.