Stanley Black & Decker (NYSE:SWK) CEO Chris Nelson said the company is progressing against three priorities: strengthening its core brands, improving operational execution and accelerating innovation.
Speaking at the Morgan Stanley 14th Annual Laguna Conference, Nelson said the company reported growth in its three core focus brands during the most recent quarter and remains on track toward its margin objectives despite what he described as a less-than-robust volume environment.
Market demand and brand strategy
Nelson said commercial and industrial professional markets have been strong for the company, while the housing market has not shown a meaningful inflection. Consumer and do-it-yourself demand has remained resilient, he said, though it has not been a major source of growth.
DEWALT remains the company’s largest franchise, accounting for about half of company revenue, according to Nelson. The brand has historically been strong in residential and carpentry trades, but Stanley Black & Decker has been expanding its offerings and market presence in commercial, industrial, mechanical, electrical, plumbing and concrete applications.
Nelson said DEWALT has been growing above the market and taking share, supported by product development and investments in customer service capabilities such as training, product availability and replacement support. He said the company sees durable opportunities in areas including data centers and energy-related construction.
The company is also working to reposition and refresh its Stanley and Craftsman brands. Nelson said Stanley, which generates more than 60% of its business in Europe, is being positioned around smaller residential contractors and certain DIY users, with an emphasis on layout, measurement, cutting and hand tools. The company has been adding dedicated sales resources in Europe and is launching a product refresh this year and next year.
For Craftsman, Nelson said the company has refined the product line for DIY customers in areas including garage mechanics, lawn and garden, and home renovation. He said Craftsman is expected to have its largest product launch cycle since Stanley Black & Decker acquired the brand in 2017, with launches continuing into next year.
Tariff actions and manufacturing footprint
Nelson said the company has adjusted its manufacturing and supply-chain footprint to reduce tariff exposure. By the end of the year, Stanley Black & Decker expects products consumed in the U.S. that are sourced from China to represent about 5% of the total, he said.
The company is also on pace to meet or exceed industry-normal levels of U.S.-Mexico-Canada Agreement-qualified product, Nelson said. Much of the company’s production serving the U.S. market has moved to North America.
Looking ahead, Nelson said the company’s next focus will be consolidating production into fewer facilities. That effort is intended to improve flexibility, reduce complexity and make it easier to respond to future policy changes.
Margin path and productivity initiatives
Stanley Black & Decker is working toward a 35% gross margin, up from roughly 32%, without relying on a major recovery in market volumes, Nelson said. He identified three principal drivers of further improvement:
- Product platforming, including reducing the number of components used across product designs.
- Lean manufacturing and targeted automation to lower labor content in production.
- Further consolidation of the company’s manufacturing footprint.
Nelson said the company is furthest along in product platforming, which has been embedded in new product development and is now being applied to existing product lines. About half of the company’s material-productivity savings this year are enabled by the platforming program, he said.
He also said the same initiatives could improve working-capital efficiency by reducing component counts, stock-keeping units and facilities. The company intends to preserve inventory availability for customers while seeking additional cash productivity.
On pricing, Nelson said 2025 list-price actions have held in the market. The company also adjusted promotional pricing and mix, particularly in power tools, after assessing customer demand elasticity. Future pricing decisions will depend in part on tariff developments, he said.
Capital allocation and portfolio
Nelson said the company has largely completed major structural portfolio changes following its recently announced divestiture of Excel. Stanley Black & Decker will continue to review individual product lines and may use alternatives such as licensing arrangements where appropriate, he said.
With its balance sheet in better condition, Nelson said share repurchases are likely to be the company’s first capital-allocation priority in the near term as it develops an acquisition pipeline. Potential acquisitions would likely focus on tools-related brands or technologies that could accelerate growth in targeted professional end markets, rather than diversification into unrelated businesses.
Nelson said the company expects to emphasize professional markets when allocating incremental investment, using that scale to support its DIY operations. Over the next 12 to 24 months, he said he expects the company’s productivity efforts and commercial growth initiatives to support EBITDA growth, cash generation and broader capital-deployment options.
About Stanley Black & Decker (NYSE:SWK)
Stanley Black & Decker, Inc is a global manufacturer of tools, outdoor products and related storage solutions. The company serves professional contractors, industrial users and consumers with power tools, hand tools, accessories, tool storage systems and outdoor equipment.
Its portfolio includes well-known brands such as DEWALT, CRAFTSMAN, STANLEY and BLACK+DECKER. Products are sold through retailers, distributors and direct commercial channels, supporting construction, manufacturing, maintenance, do-it-yourself and outdoor applications.
The company was formed in 2010 through the merger of The Stanley Works and The Black & Decker Corporation, combining businesses with roots dating to the 19th century.
