Stanley Black (SWK) Earnings Up in Q1, Sales Down YoY – May 2, 2024

Stanley Black & Decker, Inc. (SWK – Free Report) reported first-quarter 2024 adjusted earnings of 56 cents per share, which beat the Zacks Consensus Estimate of 55 cents. The company reported a loss of 41 cents per share in the year-ago quarter.

Stanley Black’s net sales of $3.9 billion surpassed the consensus estimate of $3.8 billion. Sales fell 1.6% year over year due to weakness in the Tools & Outdoor segment.

Segmental discussion

Revenues from SWK’s primary segment, Tools & Outdoor, totaled $3.3 billion, down approximately 1% year over year. The dampened market demand weighed on the segmental turnover. Our estimate for segmental revenue was $3.3 billion.

Industrial segment revenues were $584.9 million, down 5.1% year over year. Lower volumes in the infrastructure market negatively impacted segmental revenues. Our segmental revenue estimate was $549.2 million.

Margin profile

Stanley Black’s cost of sales fell 10.8% year over year to $2.8 billion. Gross profit increased 32.7% year over year to $1.1 billion. Gross margin increased 740 basis points (bps) year over year to 28.6%.

Selling, general and administrative expenses increased 3.2% year over year to $851.8 million. Adjusted EBITDA was $342.6 million, reflecting year-over-year growth of 93%. The margin increased by 440 basis points to 8.9%.

Balance sheet and cash flow

Exiting the first quarter, Stanley Black had cash and cash equivalents of $476.6 million, compared to $449.4 million reported at the end of the fourth quarter of 2023. Long-term debt balance was $5.6 billion, higher than the $6.1 billion reported at the end of the fourth quarter. -quarter 2023.

In the first three months of 2024, net cash used in operating activities was $431 million, compared to $286.3 million cash used in the same period last year. Capital and software expenses totaled $65.7 million, compared to the $68.2 million reported in the same period last year. Free cash outflow (before dividends) in the year was $496.7 million, compared to $354.5 billion in free cash outflow a year ago.

Through the first three months of 2024, SWK, which carries a current Zacks Rank #3 (Hold), returned dividends worth $121.8 million to its shareholders, up 1.7% from the year-ago period. You can see You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Guidance 2024

For 2024, Stanley Black expects adjusted earnings of $3.50-$4.50 per share. The company expects earnings of $1.60-$2.85 per share for this year

Stanley Black expects free cash flow of $0.6-$0.8 billion by 2024.

Performance of other industrial companies

IDEX company‘s (IEX – Free Report), fiscal 2024 second-quarter adjusted earnings of $1.88 per share surpassed the Zacks Consensus Estimate of $1.75. On an annual basis, operating profit decreased by approximately 10.1%.

IDEX’s net sales of $800.5 million fell short of the consensus estimate of $805 million. Sales also fell 5.3% year over year.

AO Smith Corporation‘s (AOS – Free Report), fiscal 2024 second quarter adjusted earnings of $1.00 per share surpassed the Zacks Consensus Estimate of 99 cents. Operating profit increased by 6% year-on-year.

Net sales of $978.8 million missed the consensus estimate of $995 million. However, sales increased 1% year over year, driven by strong demand for commercial water heaters in North America.

W. W. Grainger, Inc. (GWW – Free Report) reported second-quarter fiscal 2024 earnings per share of $9.62, surpassing the Zacks Consensus Estimate of $9.58. Operating profit improved by 0.1% year on year.

Grainger’s quarterly revenue rose 3.5% year over year to $4.24 billion. The top line missed the consensus estimate of $4.27 billion.

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