- Stanley Black & Decker, Inc. (NYSE:SWK) reported first-quarter FY22 revenue growth of 20% year-over-year to $4.45 billion, led by acquisitions and price realization, missing the consensus of $4.65 billion.
- Volume fell 6%, constrained by temporary electronic component supply challenges.
- Adjusted EPS decreased to $2.10 compared to $2.85 in 1Q21, beating the consensus of $1.70.
- The gross margin was 29.3% compared to 37.3% in 1Q21, and the adjusted gross margin was 31.3%, down from 37.4% last year.
- Gross margin was down as price realization was more than offset primarily by commodity inflation, higher supply chain costs to serve demand, and lower volumes.
- The adjusted operating margin for the quarter was 11.5%, a decrease from 18.5% in 1Q21.
- Stanley Black & Decker's cash used in operating activities for Q1 was $1.24 billion, compared to $157.8 million a year ago. Free cash outflow was $1.38 billion.
- Tools & Storage segment sales were $3.8 billion (+24% Y/Y), and a segment profit margin of 10%, down by 1,109 bps.
- Industrial segment sales were $647 million (-2% Y/Y), and segment profit margin of 6.4%, down by 880 bps.
- "Stanley Black & Decker capitalized on the strong demand environment, our recent strategic acquisitions in the fast-growing outdoor power equipment market and a 5% contribution from pricing to drive 20% quarterly revenue growth as well as higher sequential margins," commented CEO Jim Loree.
- SWK initiated a $2 billion accelerated share repurchase during the quarter and completed $0.3 billion open-market repurchases.
- FY22 Outlook: Stanley Black & Decker expects to deliver total revenue growth in the mid-twenties.
- EPS outlook revised to $7.20 - $8.30 (from $10.10 - $10.70), and on an adjusted basis to $9.50 - $10.50 (from $12.00 - $12.50) vs. consensus of $11.98.
- It expects a free cash flow of $1 billion-$1.5 billion.
- Price Action: SWK shares are trading lower by 8.88% at $126.78 on the last check Thursday.
