Stanley Black & Decker (SWF) Q2 2026 Earnings Report

Overall the call presented stronger-than-expected operational and margin performance, an EPS beat, meaningful balance-sheet repair (approximately $1.7B debt reduction and share buybacks), raised EPS guidance and clear brand and go-to-market progress (notably DEWALT and power tools). Offsetting weaknesses included headline revenue declines tied to portfolio divestitures, outdoor demand softness, regional headwinds in parts of Europe and geopolitical/import tariff uncertainty with persistent inflationary pressures that may require future price actions. Management emphasized disciplined capital allocation and reinvesting temporary tariff benefits into growth, while maintaining conservative assumptions on future tariff timing.

Management tightened 2026 guidance with adjusted EPS raised to $5.20–$5.80 (midpoint up ~18% YoY and $0.20 above prior midpoint; ~$0.15 of the increase is below‑the‑line and ~$0.05 reflects net tariff refunds); GAAP EPS is guided to $4.60–$5.45 (with pretax non‑GAAP adjustments $0–$40M, incl. the CAM gain). Revenue is expected to be roughly flat vs. prior year with organic revenue up low‑single‑digits (about evenly split between volume and price); Q3 net sales ~ $3.7B (flat overall) with organic sales +3–4% and Q3 adjusted EPS ~$1.50–$1.60 (planned tax ~22%, share count ~150M). Margin and cash metrics include full‑year adjusted gross margin expanding ~150 bps ex‑tariff (net tariff refunds add ~60–70 bps to FY AGM), 2H AGM targeted at 34–35% (and 35–37% by end of 2028), SG&A ~23% of sales (including ~60 bps of incremental costs), full‑year interest expense ~ $255M, other net ~ $230M, free cash flow raised to $600–800M (or $800–1,000M excluding CAM fees/taxes) with H1 FCF ~ $250M, working capital reduction target ~$200M and inventory toward ~135 days, and net debt/adjusted EBITDA targeted at ~2.5x by year‑end after $1.7B of debt paydown and $250M of buybacks (3.2M shares), with only the Q2 tariff refunds included in guidance.