Stanley Black & Decker (SWK) Q3 2026 Earnings Report

The call was strongly positive, with solid third-quarter organic growth, substantial adjusted EPS and margin outperformance, raised full-year EPS and free cash flow guidance, improving priority-brand momentum, and continued capital returns. The company also cited meaningful challenges, including outdoor weather pressure, automotive weakness, material inflation, regional softness, and flat total revenue expectations, but management expressed confidence in productivity, pricing, brand investments, and the long-term strategy.

For 2026, adjusted earnings per share guidance is $5.95 to $6.25, with the midpoint $0.60 higher than the midpoint of the prior adjusted guidance range and representing 31% year-over-year growth; weighted average shares are expected to be 150 million versus 151 million previously, with no potential fourth quarter tariff refunds included. Total company revenue is expected to be about flat compared to last year, organic revenue is expected to grow by a low single digit percentage year over year, and full year gross margins are expected to expand by approximately 350 basis points, including approximately 150 basis points from the net tariff refund benefit, with fourth quarter adjusted gross margin expected at 34% to 35%; SG&A as a percentage of sales is expected to be around 23.5% to 24%, and 2027 SG&A is expected to be approximately 23% of sales. Free cash flow is expected to be in the range of $1 billion to $1.2 billion, Tools and Outdoor organic growth is expected to be low single digit in 2026 with fourth quarter organic revenue up between 3% to 4%, and Engineered Fastening organic growth is expected to be a low single digit percentage with adjusted segment margin flat year-over-year. Pretax non GAAP adjustments are expected to be in the range of zero to $20 million, full year net interest expense is expected to be about $200 million, other net expenses around $230 million, and the adjusted tax rate 20%; fourth quarter net sales are expected to be around $3.6 billion, organic sales up by 2% to 4%, adjusted earnings per share approximately $1.45, including roughly $0.25 of incremental cost and taxes, with a planned tax rate of approximately 17% and a share count of about 148 million. Long term adjusted gross margins are targeted above 35% toward 37%, and net debt to adjusted EBITDA is expected to be at or around 2.5x at year end.